Tax Certificates in Alabama

[Srini K.]

When you buy a tax certificate for vacant land in Alabama,

1) Do you have to wait 3 years to get the tax deed and in the mean time have no right to the property

2) Do you still have to take possession of the land after getting the tax deed. What is there to take possession of vacant land? How do you establish possession? If you do not take possession for say a home or land, what are the risks?

3) After getting the tax certificate who pays the library dues, fire dues etc.. as the certificate holder is still not the owner but gets those bills?

4) Can the current owner of the property sell it without involving the tax certificate holder?

[Denise Evans]

@Srini K.

1.  The tax deed is available three years after the auction. If you buy from the state inventory and it's already been 2 years, then you just have to wait another year. You are entitled to possession. For vacant land, it pretty much means you have to file an ejectment lawsuit to establish that.  If the owner redeems, they also have to pay your legal fees for the ejectment, though.

2. You must have three years of possession to burn off all redemption rights. Sometimes that does not happen until after the tax deed.  If you do not take possession within 3 years after the tax deed date, or file an ejectment lawsuit within that time, you risk the owner being able to file a lawsuit and get the property back without paying you anything.

3. The certificate owner pays those, but they are reimburseable if there is a redemption, plus 12% per year interest.

4. Yes, the current owner can sell the property.  If the new owner gets title insurance, the title company will usually discover the tax sale and redeem at closing. If the new owner does not get title insurance, then all they've bought is the right to redeem.