Tax Lien Certificate is past redemption ... How to Foreclose?

Question

Tax Lien Certificate is past the redemption period ... How to Foreclose?

I'm not sure of a few things. Does the tenant still live there? Are there any other liens on the home such as a mortgage or IRS liens? How do I find that info out? And how do I start the foreclosure process? How long does that take?

Jerry K. · Answer

Rhett, You need to reach out to @Denise Evans - she has several blog posts about Alabama Tax Liens and the process here on BP.  She is an attorney and investor.

Brian Cam · Answer

Hey Rhett,

First, in order to see if there is still someone living in the property, you might want to ask someone that lives in the area to scope it out for you.  If you don't know anyone, you may be worth a shot to ask a local agent to take a look.  ( I assume you would want to sell this home if you are living in CA, so you can offer to list it with them in return).

You would be able to see if there are any other liens or mortgages through a title report.  it usually doesn't cost too much, and you can ask a local title company to do all the work for you.  The other way to check is to check out the Alabama county court records and dig through the paperwork (if you live around there obviously)

Deed Assigned at Foreclosure to: After the expiration of three years from the date of the sale of any real estate for taxes, the judge of probate then in office must execute and deliver to the purchaser ... a deed to each lot or parcel of real estate sold to the purchaser and remaining unredeemed ... and such deed shall convey to and vest in the grantee all the right, title, interest and estate of the person whose duty it was to pay the taxes on such real estate and the lien and claim of the state and county thereto, but it shall not convey the right, title or interest of any reversioner or remainderman therein.  (Sec. 40-10-29, Sec. 40-10-30).

Notes: The deed conveyed upon expiration of the redemption period is not sufficient. You'll need to consult your legal professional for assistance with a quiet title action. Left-over liens not sold at the county level can be purchased from the Alabama State Commissioner of Revenue (Sec. 40-10-21 and 40-10-132)

Hope this helps, If not then please feel free to reach out

Emmett R. McCarthy · Answer

As noted above, it's best to find an attorney who practices in the state (and possibly the county) where the property is located. In Illinois, the petition for tax deed must be filed in the circuit court and the other legal requirements performed between 6 and 3 months BEFORE the redemption period expires. Although, in Illinois a tax deed is considered "new and merchantable title" and you do not need to file a quiet title action and can get an order of possession from the court that entered the order for tax deed.

Rhett P. · Answer

I'm also seeing properties that have multiple tax liens on them. For example, one person owns a lien for the first year of the redemption and another person owns a lien for the other 2 years of the redemption period. In this case, who has the right to the deed?

Brian Cloud · Answer

You actually dont foreclose in these matters.  You need to obtain a tax certificate/tax deed and once you have maintained the property for 3 years from the date of the tax sale, then you can file a quiet title action to convert the tax deed into a marketable title.  Such matters are filed in the Circuit Court and you need a title binder as you have to notify all interested parties.  These matters are time consuming and expensive.  We have about 20 pending at the moment for various clients.

Pari Thiagasundaram · Answer

Rhett P. What is the website you use to purchase tax liens in AL

Brian Cloud · Answer

The person who paid last would have priority status although in your example the person who paid the 1st year would have a right to redeem the property by paying the person who paid for the 2nd/3rd year in your example.  Once the quiet title action is filed, the person who paid the taxes in year one would most likely have a tough argument and would most likely lose the property.   My suggestion would be to redeem before the action is filed.   A very good question and unfortunately those facts would most likely create a longer court action than others.

Lynn Henley · Answer

Rhett,

Are you wanting the own the property, or are you just wanting to make a good return on your investment?

If the later, send me a PM.

Lynn

Brian Cloud · Answer

I am actually an real estate attorney myself.  These have to be filed in Circuit Court and so they could take a year but most likely shorter; but most likely longer than 2 months.  My firm handles them on an hourly basis and they typically cost between $2k and $5k but you never know.

Rhett P. · Answer

Thanks Brian, I have the deed and its been over 3 years. About how long does it take and how expensive is the process. I've heard that in Florida it can take roughly 2 months at a cost of $1,200 to $2,000. So is the next step contacting an attorney to handle all of the dirty work?

Tax Lien Certificate is past redemption ... How to Foreclose?

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