TAX CERTIFICATE STRUCTURE BEING DEMOLISHED. HOW TO HANDLE?

[Brittany Wilkerson]

Hi, everyone. Just looking for some advice. I purchased a tax certificate for a property that sold to the state of Alabama in 2019. Yesterday I received a notice from the county saying the property is a nuisance and will be demolished.  The notice gives me 15 days to file an appeal. I called the building official and he said that they've been in court for the past 2 years trying to get the property demolished and the last they heard was that the owner was in prison in TN. I don't care about the structure, but I would like to have the lot. Are they going to just place a lien on the lot and bill me for the demolition cost or should they bill the owner for the cost as I don't own it and only have the tax lien? 

[John Underwood]

They will likely put a lien on the property for the costs of demolishing the house and hauling off the debris. 

[Denise Evans]

They will put a demolition lien on the property.

[Brittany Wilkerson]

Thank you both for your replies. So, I could still use or lease the lot once I have the deed just wouldn't be able to sell it or clear the title with the lien there or would they force me to pay off the lien before using it? Sounds like the demolition bill might be costly. 

[Denise Evans]

The city can foreclose their lien and sell the property at auction. That lien trumps your tax certificate, so the city foreclosure purchaser can get the property and not pay you anything. As far as I have been able to find out (Somebody PLEASE correct me if you know better) the demolition lien is good for 20 years. It racks up interest that whole time. The city does NOT have the ability to accept less than payment in full to release a lien. Their hands are tied because the statutes do not allow that. So, you can ignore the lien, but the eventual price tag will increase by 7.5% per year, meaning the lien will double every 13 years.

[Hubert Bruce]

Brittany - I don't know about the lien, but are you looking for property in Birmingham , AL?

[Will Sifert]

In many cases the county will charge more than what it would cost you to hire someone to do the work.

Buying tax liens on vacant, blighted, run down houses there is always the risk the county will want to demolish it before you can take ownership. Here (Louisiana), I have intervened in these situations and made the repairs needed to satisfy the local municipality. Fortunately we have a way in the law that allows us to recoup our repair costs if the property is redeemed by the owner. However, in all cases that the owner was this neglectful they never redeemed.  

I never buy a tax lien on a vacant house unless the value of the land exceeds the cost of the tax lien, sub taxes and cost of demolition. Many people will spend a couple thousand on tax lien / sub taxes, then the county tears down the house and liens it for 10K+ and the vacant land is worth less than that. You lose everything you spent on tax lien and sub taxes and have to walk away.

[Justice NA]

Quote from @Denise Evans:

The city can foreclose their lien and sell the property at auction. That lien trumps your tax certificate, so the city foreclosure purchaser can get the property and not pay you anything. As far as I have been able to find out (Somebody PLEASE correct me if you know better) the demolition lien is good for 20 years. It racks up interest that whole time. The city does NOT have the ability to accept less than payment in full to release a lien. Their hands are tied because the statutes do not allow that. So, you can ignore the lien, but the eventual price tag will increase by 7.5% per year, meaning the lien will double every 13 years.

@Denise Evans does this mean demolition nuisance liens are removed after 20 years and the tax deed will not have any liens ties to it if purchased? 

[Denise Evans]

20 years is a universal period of repose. That is the legal expression if you want to google it. Sometimes it is called laches.  After 20 years, problems disappear. it has been too long. Witnesses are dead. Paperwork has disappeared.  Things just can't be enforced any more.