Investor · Orlando · Member since 2016 · 151 posts · 72 votes
Hey there,
I am looking at a Tax Deed sale and there is a lien (one of many) on it from a debt collection agency. I've begun to work with the county and municipalities to work on reducing the amount ill need to pay, but the debt collection agency operator says that i have to be the owner to negotiate. Of course, I dont want to buy this unless I have some assurance that the liens can be negotiated down.
Has anyone else run into this issue and have found a way to solve it?
Assuming this is Florida, I strongly encourage you to read your local state property tax lien laws because there is some good news that might apply in your situation.
What effect does a tax deed auction have on the primary mortgage lien holder’s interest in the Subject Property following a tax lien auction?
In the event the lender does not redeem by paying the delinquent taxes on the property, a tax lien auction will wipe out the mortgage lien pursuantto Florida law, in the absence of any act or omission which may give the mortgagee cause to successfully pursue a Quiet Title action. A lender whose interests are wiped out will likely, pursuant to Florida law, claim an interest in excess funds following the tax deed auction to the extent there is an excess remaining following distribution to governmental and other priority
Additionally, you now also have proof of tax lien notice with the lender through your conversations with them. Please take the time to record any emails or phone call logs with the debt collection agencies about this matter so that if you file a Quiet Title Action, those records can be submitted as due process notification.
Debt forgiveness of the property and attachment to the original owner is one of the main reasons I buy tax sale properties.
Don't have the answer to your query but in their shoes, i'd do likewise: why would they negotiate with someone they have zero leverage on? Their only claim is the lien, you don't own the place, you owe them nothing, Why make concessions to you? They'd be negotiating against themselves.
Assuming this is Florida, I strongly encourage you to read your local state property tax lien laws because there is some good news that might apply in your situation.
What effect does a tax deed auction have on the primary mortgage lien holder’s interest in the Subject Property following a tax lien auction?
In the event the lender does not redeem by paying the delinquent taxes on the property, a tax lien auction will wipe out the mortgage lien pursuantto Florida law, in the absence of any act or omission which may give the mortgagee cause to successfully pursue a Quiet Title action. A lender whose interests are wiped out will likely, pursuant to Florida law, claim an interest in excess funds following the tax deed auction to the extent there is an excess remaining following distribution to governmental and other priority
Additionally, you now also have proof of tax lien notice with the lender through your conversations with them. Please take the time to record any emails or phone call logs with the debt collection agencies about this matter so that if you file a Quiet Title Action, those records can be submitted as due process notification.
Debt forgiveness of the property and attachment to the original owner is one of the main reasons I buy tax sale properties.
If it is a Florida Tax Deed auction, and you are buying at the auction, All those types of liens get wiped out, assuming they were properly notified.....talk about negotiating against yourself!
You only have to worry about other current/recent past property taxes and some state/county/utility liens.
@Reuben Gathright A tax deed auction in FL is an auction of the actual property not the tax lien/certificate, of which the holder is the one sending it to public auction.
@Kraig Kujawa It depends on the type of lien it is. If it is an IRS lien then it is equal to a first position lien which does not go away. You can submit the proper paper to ask them to release their right to redeem, they will send you an offer of what they will accept and at that point you can possibly negotiate. If it is a code enforcement lien then they be reduced by cleaning up the property. If it is a special assessment lien then they can often be negotiated once you own the property. If it is a water sewer lien then they are also equal to the tax lien itself and take first position. I would include the amount of the lien into the price of the property and if you can get the lien reduced great, but if not, then is it a good deal including the additional lien price? It's all about the bottom dollar and if there is still wiggle room with your profit then work on it after you take possession.