Private Lending- Any concern for senior property tax liens?

Question

What if you carry a note for a property where the owner has stopped paying property taxes? Is it possible to cover the taxes yourself to prevent potentially losing the property?

Mike Hartzog · Answer

Another point here is that the amount paid to cover tax is added to the loan account as an “advance” and accrues interest at the loan rate.

Chris Seveney · Answer

@Hen Ley

You absolutely will want to cover them so the property doesn’t sell at tax auction . You can also foreclose on a borrower who is. It paying taxes (even if paying regular P&I payments).

Hen Ley · Answer

@Kyle J., thanks so much for the information! Appreciate you taking the time-

Kyle J. · Answer

Yes. For example, my loan paperwork requires the borrower to pay the property taxes at least ten days before they’re due. If they fail to do that, it gives me the right (but not the obligation) to make the payment on their behalf. Of course any amount I had to pay would then be owed to me by the borrower.

Private Lending- Any concern for senior property tax liens?

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