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Alabama Tax Sale Redemption Rights
There are four different tax sale redemption periods in Alabama. At the time of the tax sale, the investor receives a Certificate, which entitles it to possession of the property. Three years after the tax sale, the investor may demand a tax deed. Before the tax deed, the person who did not pay his taxes is still technically the owner. Despite that, I always refer to the defaulting taxpayer as the "former owner" because it makes things easier.
1. The "administrative redemption period" continues for three years after the date of the tax sale. Redemption is accomplished through local county offices. The investor is allowed to keep all rents collected before redemption.
2. The "judicial redemption period" is called that for historic reasons. It does not require a lawsuit. If the investor has not taken possession of the property, then the former owner has three years, from the date the investor takes possession, to redeem. If nobody is in possession of the property, the law assumes the former owner is still in possession. For tax sale properties owned by the State, the law assumes the former owner is still in possession. If the investor takes possession on the earliest possible date--the date it receives the tax certificate, five days after the auction--then the administrative redemption period and the judicial redemption period will both burn off at the same time. If the administrative redemption period has expired, the judicial redemption is negotiated directly with the investor, or resolved by the courts. The investor is allowed to keep all rents collected before redemption.
3. The "defective tax sale redemption period" arises when the tax sale was void for some reason. The former owner can contest the tax sale, reclaim the property, and pay only the taxes and 12% redemption interest, but will not be required to pay for preservation improvements or insurance premiums. In order to defeat this type of redemption, the investor must adversely possess the property for three years, starting on or after the tax deed date. This is called the "short statute of limitations" if you want to research it further. The investor must disgorge all collected rents if the owner redeems.
4. The "lienholder redemption period" is for one year, and applies to all recorded liens as of the date of the tax sale. Mortgage lenders, judgment creditors, IRS--they all have redemption rights they can exercise in order to protect their liens. Their redemption rights are during the "administrative redemption period" or the "lienholder redemption period," whichever is longer. The investor must send certified mail, return receipt requested, notice to all lienholders regarding the tax sale. There is no requirement for WHEN the notice must be sent. On the date the notice is received by the lienholder, that starts the one-year lienholder redemption period. If the notice is not sent until ten years after the sale (as an example) then the lienholder's redemption rights start on that date. If a lienholder redeems under this rule, the investor is allowed to keep all rents collected before redemption.
Hello @Denise Evans I have a quick question for you if possible... I got my first tax sale certificate on May 23, 2017 and the owner sent me the redemption paperwork but i did not sign it because i was waiting to hear back on the invoice of expenses i mailed to them. Anyways we let them know we took possession of the property and moved in 6-1-2017 but today i get a knock at the door from the former owners maintenance man which by the way i caught looking in my window after he knocked on my door but he was saying he was told to come put a lock box on the door and that they were unaware tenants already moved in.. my question is does this seem right? or is it illegal for them to come on the property trying to take possession after they were already told we took possession? Also do i have to let them know tenants are living in the property?
Thank you for any advice!!
I have some questions, first.
"the owner sent me the redemption paperwork..." Does that mean the taxpayer sent you the affidavit saying they do not owe you anything?
"...because I was waiting to hear back on the invoice of expenses I mailed to them...." Does that mean you already knew they wanted to redeem and presented them with the statement of the value of your preservation improvements, but had not received a response, much less payment?
"I get a knock on the front door..." but then you mention tenants. Are you there, or are your tenants?
What was the property like when you took possession? Did it look abandoned, or just between tenants?
@Denise Evans the paper work they mailed to me said verification of allowable expenses by tax sale purchaser. I then contacted Jefferson county and asked if there was a time frame within turning back over the papers with my signature the lady stated not until i hear something back from the former owners with the invoice i mailed them. We also waited and never heard back so I contacted the state again and they said i can continue taking possession. So I did just that. As soon as I received the papers in the mail from the former owners I immediately mailed them a invoice with listed expenses of what we already did with the home. I also made sure to do it where they had to sign to receive it so i know they picked it up May 12, 2017. Still we heard nothing.
I apologize let me clear that up I am living in the home and have been since 6-1-2017 with all utilities legally cut on as well.
Before taking Possession the property was full of trash, rodents, bugs etc and left over ads mattresses with large rodent holes etc.. before paying we also went over to the property every day before our 20 days were up and still no sign of anyone living on the property. all of a sudden this maintenance man popped up when my husband was doing all the yard work and cleaning up the outside of property and attempted to board up a broken window that was on the home, my husband stated to him we paid the taxes on this property and have been watching it for about 2 months and before hand and that we were taking possession. We also been here since the 1st of this month and started cleaning it out on may 23 and still with being at the property all this time no sign of owner. Now this same guy came back yesterday about 3:45pm to be exact and looking through the window while shouting IS SOMEONE LIVING IN THERE! I opened the door and he immediately stated he didn't know anyone was living here and thought someone broke in, and that his boss told him to put a lock box on the property. Right after i get an email from the owner stating he already redeemed the property and we need to move about before lawyers and ejectment come in hand.
So at this point i am trying to get a better understanding to make sure. Thank you!
@Denise Evans Okay so i now just contacted The Redemption department and even with the company receiving my invoice and signing for it through the post office on may 12, 2017 the former owners went down and filed an affidavit and filed through probate saying they never received anything from us and have redeemed the property on May 26, 2017.. Is this legal? I just went down and assessed the property June 8 and they didn't state anything and accepted my paperwork. Also i was told i was never suppose to move in the property without a deed and will now have to move since the owner redeemed. Is this true I am now looking for a lawyer i guess anything helps thank you!
Tell the revenue department the taxpayer lied, and show them the green card. You will have to file something in Probate Court to rescind the redemption. I spoke to Jon Terry, an attorney who handles a number of tax sale cases, and is in probate court a LOT. He said he is taking new clients, and you can give him a call. The BP artificial intelligence, or maybe "hall monitors" do not like posters who provide phone numbers, and often flags those posts and won't publish them. You can google him, though. He is in Bessemer with the firm of Bains and Terry.
@Regina Peterson, please email me a copy of the form they wanted you to sign. I am alarmed it says "verification of allowable expenses." It is NOT about expenses, but about increased value.
@Denise Evans I have a question for you. Background: An investor purchased a tax certificate for a lot in 2014. He didn't pay taxes in 2015 and I purchased the tax certificate. I also paid the taxes in 2016. I took possession in 2015 immediately after I got my tax certificate by mowing and staking out the property. The investor has offered to sell me his tax certificate. I'm wondering if I should buy it.
Since I have only had active possession for 2 years, I still have one more year for the redemption to expire. If I purchase his tax certificate, I don't think it would matter one way or another because I will still have that one year left. Is this correct or can I get the tax deed if I purchase the certificate? Even if I got the tax deed, I couldn't do anything with it until the end of my third year of possession ..correct?
Thanks in advance!!!
If you purchase his tax certificate, you can get a tax deed one year earlier. If you have a tax deed one year earlier, you can file an in rem quiet title one year earlier (which takes three years of possession after the tax deed) and you also get rid of a potential redeeming party. The prior investor might not want to redeem, but he might sell his certificate to another investor who could redeem away from you.
Bumping this. This is probably the most informative thread I have seen on this site so far.
@Denise Evans Denise, YOU ARE GOLD! The information you have provided has made understanding the laws in Alabama so much easier, but I have another question:
There is a vacant lot in Birmingham that I want and have already sent the state an application to buy for the back taxes. I researched the property, and discovered that the taxes haven't been paid in 20 years, and the state put a lien on it after 3 years. The state recently named their price for the lot. It was the back taxes + the interest, even though they stated it could have been more (I called & asked prior to submitting the application). My plan is to build on the lot, rent it out, & refinance the home to fund a similar endeavor. Is the redemption period still the same & will it be possible to refinance the lot?
@Alex R. Baraka, that is a complicated question to answer. Call me or send me a private msg with your phone number.
This Topic has been Helpful. However, I redeemed the property of a deceased family after a tax sale; How do I proceed in getting this property in my name without having it go through another tax sale. the property wasn't purchased at the tax lien sale, I just went into the County tax office with the parcel number and paid back taxes, after the family decided not to pay the taxes anymore. So, do I have the ability or even the rights to get the deed put into my name. I have lived in the house on the property for the past year, the remodeling of the home, maintenance up keep, and home insurance has been paid by me for the past two years.
When you redeemed, the title went back to where it was before the tax sale. So, the answer to your question depends on who are the heirs of the family member. Did the family member have a will? If not, did they have children? You can google the following:
alabama law intestate succession
and find websites that tell you who inherits when someone dies without a will. Let's suppose the children inherited, as an example, and you are one of the children. Even though you paid the taxes, ALL of the children own the property together. In that situation, you would have to get quitclaim deeds from your siblings, and also file an affidavit in the real estate recordings explaining about the death and who the heirs are. That is so when a lawyer does a title search on the property, it is clear why there was a deed into Person A, and then suddenly there are deeds out of People X, Y & Z, but no explanation as to how People X, Y and Z got on the title.
What items and acts are considered redeemable improvements under Alabama's Law
For properties that contain a residential structure, it is "preservation improvements" which are defined by the statute as "improvements made to preserve the property by properly keeping it in repair for its proper and reasonable use, having due regard for the kind and character of the property at the time of sale."
For any type of property at all, but which is located within the official boundaries of an urban renewal or urban redevelopment district, it is "permanent improvements." The statute defines those as "permanent improvements shall include, but not be limited to, all repairs, improvements, and equipment attached to the property as fixtures."
There is virtually no appellate guidance about the parameters of those definitions.
Thank you so much Denise. How can I find out if my properties which are located in Monroeville and Vredenburg Alabama are considered to be urban renewal or urban redevelopment properties?
@Leslie Finklea, Call the local Planning and Zoning Department, or perhaps Inspections, and ask them.
i purchased a property on May 4 2017. Its location is Vredenburg Al. I received the certificate on May 10. I sent out certified mail may 12th. I received confirmation receipt may 25. I continued to maintain property by cutting grass and repairing a few leeks. No one came to the home this entire time. I changed the locks upon receipt of the certified confirmation. The original owner has belongings which I have not removed. As well power is still on in his name. He contacted me yesterday via email to redeem. I entered the property today. It seems like someone has been here and now the water heater seems to be flooding the property. I thought the home was abandon given he signed the notice and I watched the home for 20 days. What are my options. He's asking for a redemption amount but depending on this new flood that could change. My locks are on the home but power is still in his name. I need help immediately
You mentioned that you received the certificate. Can you please validate whether you have tax certificate or the tax deed? If you have the certificate, then the owner should be redeeming through the county and not with you.
Tax certificate
i just left the property with my contractor. Ther is a major water leak coming up from the ground. And now major water under the home. He also saw that the meter itself has been damaged. Should I notify the water company to have them turn water off? Should I notify him of the cost at this point and notify him of the leaks and let him know if he fails to redeem in 10 days I will need to have these items repaired as well? Should I have the utility's changed to my name. I'm not sure what to do on this one
No the property has an abandoned structure so he has to come through me first. I have made improvements that need to be satisfied first.
@Denise Evans can I please have some help in the above matter. I went through your book and I am still confused as to this particular situation.
I do not think the house was abandoned. I'm sorry. It had personal belongings in there and the power was turned on. When I lived on the lake, I visited my farm maybe once every six months. It was not abandoned. Before the lake house was built, I stayed at the farm but visited my garden home in the city maybe once every month or so. Just because the owner has not been present for awhile does not mean it is abandoned. Abandonment is a question of the intention of the owner, not how things might seem to you.
1. Call the water company immediately and have the water turned off. Have them determine if the problem is on their side of the meter or not.
2. Notify the owner of the problem. Do not do any repairs yourself unless it is necessary to prevent additional damage. Even then, ask the owner if he would prefer to handle that himself.
3. You are liable for waste in the appropriate circumstances. In other words, if you did something to cause the problem, you are liable. But, you are not an insurance company. Just because something bad happened while you were in possession does not automatically mean you are liable. It is a question of fault, not of timing.
4. Put your insurance carrier on notice there might be a problem, in case you get sued. Play nice with the taxpayer. Do not make waves.
@Joe Mclain, there is contact with her by the taxpayer because of the affidavit process that has been in effect for the last several years.
That's one of the reasons I simply maintained and watched it for now. I did notify the water company and they have shut it off. I just notified him and I am trying to post a screen shot of the text