All Forum Posts by: Denise Evans

@Derek Bleam  It varies with jurisdiction. If you are inside a city limits or police jurisdiction, the inspection department can tell you what is required currently, what is triggered by property updates, and what the exceptions are. Fist confirm you are inside city limit or police jursidiction. I like to schedule a personal meeting, if at all possible, and bring a box of premium doughnts to thank people for their time.

@Ahmad H., Perhaps when questioned by the fire marshal, the tenant told the truth and said they had never replaced the batteries and thought it was the landlord's job to do that.

Good point, @Alan F. But, there is "should" and there is "required." Hardwired and interconnected vs. solely battery operated depends on what municipality or police jurisdiction the property is in, the date of the requirements, the grandfathering rules, and the last time a permit was pulled, which would have probably eliminated grandfathering. Also it depends on insurance company requirements, even if local code does not require. Cheaper rates usually translate to more stringent requirements for safety standards. Which is how they are able to keep their losses, and their rates, down.

@Alan F.

Good point, @Karl B., but we've all had the experience of tenants who won't change HVAC filters even when you leave several with them.  I think landlords are better off taking on this responsibility themselves.  If too much trouble, then at least make sure the tenants have renters insurance with at least $500,000 of liability coverage, and landlord is named to receive notices if policy in danger of cancellation for non-payment. That way, at least if the tenant does not replace their batteries and the landlord's insurance denies coverage, you can sue the tenant and collect from their renters insurance.

An Alabama client of mine had this experience, but I think it is relevant nationwide. He had smoke detectors in all rental houses. It was the tenant's responsibility to test the batteries periodically and replace them.  In at least one house, a tenant of many years had not done that. There was a fire and the house burned to the ground. The insurance company denied coverage because the smoke detector was not operational at the time of the fire. My brother-in-law, a fire marshal, told me that even if the smoke detector is a melted lump of plastic and metal, they can easily determine if it was operational at the time of fire.  He said if operational, they will find evidence of soot inside the detector. No soot, not operational, no insurance coverage.

The lesson--the landlord should check all smoke detectors at least annually, and replace all batteries at that time, and invoice the tenant for the expense.

@Michael Watts, It is my opinion that if there are unknown persons with redemption rights, the guardian ad litem's ethical responsibility will always be to request an auction. That protects the rights of the unknowns. If the investor's opening bid is the only bid, then that is the market speaking regarding the value of the house being no more than the liens. So, there has been no equity stripping. If it brings a higher price, then the money will go to the State's unclaimed funds to await possible claims by the unknowns at some future point.

You were wise to invest in abandoned houses under the old system. I think vacant houses might be a good investment under the new tax lien auction rules.  Some of them will not be redeemed, either. Often, owners or heirs will have to ask themselves, "If I spend $2,000 (or whatever) to redeem this property, is it reasonably forseeable that I will be able to fix it up and either sell it or turn it into rental revenue? Where will the money come from to be able to do that?"  Sometimes it's better to just dump out and not redeem and be relieved you don't have to stress about it any more.

Largely the problems have been satisfying judges that all the due process requirements have been met to protect the rights of defendants. It requires RIGOROUS adherence to the statutory requirements and also erring on the side of caution when in doubt.  By that last statement, I mean that if a plaintiff THINKS someone  MIGHT have redemption rights (such as an adverse possessor) they should be included in the lawsuit as defendants. Then, such persons can prove to the judge they have redemption rights, or not, as the case might be. But, at least they are before the court from the very beginning. 

Some of the problems have been sloppy drafting.  Alabama has had a "notice pleading" system for many years. In other words, if a defendant can sort of figure out why they are being sued, from reading the complaint, that is enough.  The Alabama Supreme Court has been looking for a test case so they can pivot to more rigorous pleading standards.  I think many circuit court judges know that, and they are already tightening up on pleadings requirements, especially in judicial foreclosure lawsuits. From a due process standpoint, it is essential that defendants truly understand why they are being sued and what their rights are.  If I crash into your car with my car, and you sue me, I know why you are doing that.  With judicial foreclosures, it is not so clear.

Sometimes, the guardian ad litem appointed by the court must continuously ask the plaintiff's lawyer for information required by law but not voluntarily included in the initial pleadings package. It causes delays.

I am preparing a Complaint package and checklists for the new system that will go into effect on October 1, 2024.  I think it will help speed things up.

Yes, Jocelyn, if you bid down the interest rate, then that is the newer tax lien system.  If you have already filed your judicial foreclosure lawsuit, and if there are unknown heirs who have to be represented by a guardian ad litem, that is what might take so long. We should talk so I can figure out what exactly is going on.  You need to beat that 10/1/24 deadline before the laws change, and not a good way for you.

Christine, if you bought three tax liens today and it has been more than three years since the first one, it is highly unlikely you will get a final order of judgment by 10/1/24.  Greg Stanley got one done quickly in Baldwin County. To my knowledge, that is the only one that has sailed through so far.

Lien certificates to not turn into deeds. Tax certificates turn into deeds. Did you buy it at auction? Was the auction online or at the courthouse. Did you have the highest bid above the opening amount of taxes + interest, or did you bid down your interest rate starting at 12% down to something else? That will help me understand exactly what you bought and what the rules are.