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Updated over 7 years ago on . Most recent reply
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Question on tax deed
First of all thanks in advance for any replies. I'll try do be as clear and thorough as I can with my question. To give a little info.... a woman won some property in a judgement and received a fee simple title. This woman later died leaving two daughters as her only heirs. The taxes on this property were not paid and sold to the state in May 2014. Four months later one of the daughters filed an affidavit of heir ship claiming ownership of the property, but did not redeem. I purchased the property from the state of Alabama in April 2016. I am eligible for a tax deed this May 2017. My question is this... once I receive my deed will there still be a redemption period for the heir ship owner or any other family? In this case when can I build on the land? Thank you again.
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- JD, CCIM , Real Estate Broker
- Tuscaloosa, AL
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Whenever you take exclusive possession of the property, a three year "judicial redemption" clock starts ticking down. The former owner's heirs can redeem at any time during that three years. They must contact you and do the redemption directly with you. This is different from, and in addition to, the three year "administrative redemption" period that starts on the date of the auction.
If the property contains a residential structure, you are allowed to make "preservation improvements" (repairs, basically, but NOT upgrades or additions) and the redemption price tag will also include the amount by which your repairs increased the value of the property.
If the property is located inside the official limits of a urban renewal or urban redevelopment district, then you can make any repairs, improvements, upgrades, or build a structure on it, and a redeeming party will have to pay you for the value of those improvements. If you spend $40,000 building a house, but the property is worth $80,000 more when you finish, then the redemption amount is $80,000.
Otherwise, you cannot build on a tax sale property until you have burned off the three years of possession and, even then, you should file a quiet title lawsuit just to be completely safe.