UNCLE SAM GET PAID FIRST!

There are many risks associated with buying Tax Deeds in Florida.

Government liens are among the most insidious. At all levels, federal, state, county and municipal, most government liens survive the Tax Auction. Meaning they either get paid off with the surplus proceeds, or the new owner of the property gets stuck with paying the bill.

Even knowledgeable investors think that by the virtue of the Tax Deed auction, all liens and title issues get wiped out.

That is not always true. Although private liens and judgments disappear, most government liens survive and can be disastrous for the investor new to Tax Deed auctions.

All private and institutional mortgages, IRS liens over 120 days old, HOA dues and private party judgments get wiped out. Memorandums of option, assignments, agreements, hospital bill liens are other examples of items that you need not worry about.

But watch out for most government liens and HOA special assessments that are voted before the Tax Sale and payments are due after the Tax Deed auction.

An IRS lien that is less than 120 days old, an SBA-guaranteed loan, a Department of Revenue lien for unpaid sales tax, a Code Enforcement lien on an abandoned property and unpaid water bills are all examples of items you need to keep into consideration when doing your due diligence.

If recorded, all these items can be found in the Public Records of the county where the property is located. The liens are filed against the property and they can be found by searching the name of the owner. Cross-check the property with the owner name in the Property Appraiser’s site.

Keep a tab of the total amount of the liens. If the amount of the surplus (any amount over the property taxes opening bid) is close or above the total amount of the surviving liens and you’re still getting a good deal, then go for it!

Bottom line, always do your homework on every property you’re going to bid at auction. A surviving lien could mean financial disaster.

Uncle Sam always gets paid first…Don’t get caught unprepared.