All Forum Posts by: Denise Evans

Way too complicated for my poor fingers to type an answer. Please feel free to contact me.

I agree with you. But, if you think about it, if the former owner sold its rights in the property to someone else, such as via quitclaim deed, it sold ALL of them. That would include the excess funds. The Alabama Supreme Court decision fundamentally rests on the analysis that the money is part of the property rights.  I have a harder time justifying the owner of the tax deed being able to claim those funds, but it is entirely consistent with that earlier court decision.

The Alabama Supreme Court ruled on June 24, 2022 that the retroactive portion of a tax sale statute was illegal. The statute stripped former owners (and the investors who partnered with them, by implication) of their rights to claim the excess funds in a tax sale. The scenario is an auction for unpaid taxes of $1,000 as an example. The bidding reaches $20,000. Who is entitled to the excess $19,000?  Earlier Supreme Court decisions said the owner could claim that money. Unhappy special interests got legislation passed that said "only if the owner redeems" and the law was specified as retroactive.

I am paraphrasing, but the recent decision said, "You cannot just pass a law and make it retroactive and deprive people of their property rights with a wave of your magic wand!"

So, for tax auctions before the 2014 amendment, excess funds strategies are back on again because the retroactive part of the statute has been struck down.

What about AFTER the statute was passed, so "retroactive" is not an issue?  Good question. It is exactly the same reasoning, you cannot just take people's property rights away.  If my house sold for $20,000 for unpaid taxes of $1,000, then my house had AT LEAST $19,000 worth of value that the counties want to keep unless I redeem. What if my house isn't worth redeeming? I'm entitled to at least my $19,000, right?

Another case is bubbling up in the appeals process that will probably say the same reasoning as in the June 24 case applies to tax auctions after 2014, too.

WHO exactly is the owner entitled to the money. Formerly it was thought "owner" meant the person who did not pay their taxes.  Another Supreme Court decision from several years ago said it is the owner at the time of the claim for the money. Which might be different from the owner at the time of the tax auction.

What does that mean to you? Start researching the excess funds treasure troves again in Alabama, update your joint venture agreements, and sign up CURRENT owners so you can claim that money and split it according to however you negotiate the split.  Happy days will soon be here again, and you should be ready.

Often, the current owner is the tax deed holder. Think about that, and what it means if you have tax deeds!  You can get some of your own money back.

To clarify, just for general "walking around " knowledge, the Uniform Laws Commissioners wrote the Uniform Residential Landlord Tenant Law, and their committee comments.  Other types of laws are created in a very similar manner. Uniform Condominium Act, Uniform Gifts to Minors Act, Uniform Commercial Code, Uniform Anatomical Gifts Act, etc etc etc. States then take down a copy of the "source document" basically, the one written by the Commissioners, and add their own tweaks. In the case of Uniform Laws, states very rarely copy from each other.  One would assume that would be a logical course of conduct--find out the experiences of other states with the Uniform Laws and their own fine-tuning, learn from mistakes, learn from things that turned out well, and incorporate everything into a state's newly enacted residential landlord tenant act. But, that always seems to be too much work, and virtually never gets done.

Yes, Bullock did the new tax lien sale procedure. You have no rights except for interest to accrue, until you are able to foreclose in three years. There are some strategies you can use that will allow you to bootstrap your lien into other rights, but you don't have them automatically.

It depends on whether it was technically a lien auction under the new rules, or a tax certificate under the old rules, but people frequently call them tax liens.  What county, and what year was the auction?

You can redeem from the tax lien. How much will depend on when the auction occurred, what county, and whether the investor made any repairs to the property or not.

Only for tax certificates. Tax liens start at 12% and are bid down.

Not allowed in a forum post/answer. You can message me.

No, there is no automatic right to reimbursement or other compensation for improvements required by local government.  If you are able to use the possession strategy I devised using established principals of real estate law, you would be entitled to that.  No, it's not just leasing the property from the owner or getting a quitclaim.  If that were the answer, I wouldn't call that a "strategy" that I created.

You do not get possession rights as a matter of law, with the new lien auction. My video includes a strategy for gaining possession using principles of general real estate law, but the tax sales law does not allow it, per se, like it does with the old certificate auctions.