Tax Deed Property Help in Atlanta

[Morris Lucas]

I am trying to buy a property from a seller who acquired the house through a Tax Deed sale in Georgia. He has already gone through the necessary  foreclosure steps according to his attorney.

The seller tells me i will only be able to rent the house or live in it for four years, as i will not be able to get the title insured since it was bought through a tax sale. After the four years, then i could sell to a retail buyer, who could get Title insurance. So, basically, i would be given a clear tax deed at this time. Does anyone have anyway around this, my plan was to fix up the house and resell, but i don't want to have to hold onto it for 4 years in order to do resell. I don't even think an investor-landlord would touch this if they cannot get title insurance, so that is my main concern. Thank you.

[David Begley]

@Morris Lucas I am not an attorney, and you need to verify with an attorney (not his attorney!) if the following is accurate.  However, I have invested in two tax deed properties in Georgia this year and have learned a lot.  IMHO, his attorney is not correct.  What I bet he has actually completed is the 45-day barment period, which is the first (and easiest hurdle) in the process required to obtain a clear title, and therefore, title insurance.  He is correct in the fact that in Georgia, after completing the 45-day barment period requirements, the new owner can simply wait 4 years to obtain clear, marketable title and the previous owner cannot reclaim.  However, during that 4-year period, you might be able to use it, but it would be very difficult, if not impossible, to sell.  What YOUR attorney will tell you, and his attorney should've told you, is that the Seller has decided to sell the Tax Deed property after completing the 45-day barment period because that is the easiest and cheapest part of the process.  What it doesn't sound like they've told you is that the next step, which is a judicial quiet title action, is a much longer and costly process.  So, it may be a good idea if you factor an additional $5,000 to $6,000 in fees to complete the judicial quiet title action and recognize you really can't (and shouldn't) do anything with the property until you can procure marketable (i.e. marketable) title and that will take at least 6 months.  AND, here's the kick in the teeth with your particular situation:  His attorney either knowingly or unknowingly misrepresented the situation when he stated that he'd already gone through all the necessary foreclosure steps, and led you to believe you had to wait four years for insurable title.  He/she either intentionally misrepresented or is inept in this area of the law.  So now the quandary I would have if in your shoes and I was being offered this deal even at sufficient discount to warrant the additional  $5,000-$6,000+ expense, I would then ask myself, worst case scenario, can I pay the additional expense and still hold it for four years and come out on top?  Back to the kick-in the teeth: the judge does not have to grant the petition to quiet the title.  If the Seller's attorney is inept and screwed up any of the very specific, tedious, administrative details required during the 45-day barment period, it's a better than good chance the judge hearing the case won't grant the motion that would pave the path to an insurable title.  In that case, it looks like you're living there for four years.

Good luck!