Tax Deed Quiet Title Questions

[William Jenkins]

I am looking for a little advice regarding a tax sale property in Missouri.  I realize any advice given is not to be considered legal advice.  I have this in front of my attorney for review, but I am looking for some additional color on the situation from those that are in the know on this process....

Prior to the financial crisis, I sold a house to an individual.  The buyer obtained a 90% first mortgage and I took back a 10% second.  In the years following the buyer went delinquent on the first mortgage/second mortgage and stopped paying the real estate taxes.  In 2015 I was contacted to participate in a short sale as the second lien holder, but the agent could never get the deal done. 

Fast forward to 2020 and someone purchases the tax deed on the property.  I never receive any redemption notification or other notices regarding the sale of the tax deed.  Last week I was served with a quiet title as I am still showing as a deed of trust on the property.  For some reason the first mortgage is not showing at all on the quiet title suit which is strange (I'm not sure what happened to it....but I appear to be in a first position now??).

What are my options on it?  Any chance of getting some type of payoff to release the lien?  Any chance I could "redeem," payoff the tax deed purchaser and take title to the property? 

Not an expert in tax sales/deeds so any info would be greatly appreciated.  

 

[Ned Carey]

@William Jenkins The response from @John Underwood is dead on. You cannot be wiped out without Due Process. You need to be served.

You have (at least) two potential ways to get compensated. The exact details would depend on your state's laws and court precedents. A good attorney familiar with tax sale in your area would be needed for specific advice.

1) If you were not served, then your position may still be valid. However you may have limited time to make a claim. My guess is it would be based on the statue of limitations which in my area is three years. It could be less.  You were probably put on notice by a legal ad in the newspaper, language similar to "anyone else who has an interest in (XYZ property)"

Now service can be a tricky situation. In Maryland, if no one is at the address on record, then simply serving the, Sate Department Of Assessments and Taxation, is considered legal service. In other words if you do not keep the state up to date on the proper place to serve you, you may never know that you received service by operation of law.  People try to dodge the service processors all the time, but it may not be an effective strategy based on your state laws.

Now, in spite of what I said above, it may be a fight that is not worth fighting. My crude understanding of constitutional law tells me, that many states have tax sale laws that would not hold up to a serious federal (or even state) constitutional challenge.An important court precedent here is the "Menonite" case. But who is going to spend the time and money to fight that battle?

2) The other more practical alternative is you may be entitled to any surplus bid above the amount of the taxes due. (This would depend on the specific laws for your area I am not familiar with Missouri law)