Can Tax Lien Certificates Be Sold To Someone Else? Long Post
Hi All,
I am very new to tax liens and am not really interested in investing in them for a living. So here is my story. Can anyone help?
My parents and grandparents each bought 20 acres of land in Oklahoma adjoining each other and fenced it together. My grandparents ended up selling because of medical problems and the property being very rural. The buyer moved to another state and filed bankruptcy on the property. I am interested in aquiring the property because it ajoins that of my parents and is fenced in with it. The buyer says he can't sell it because he filed bankruptcy on it 3 years ago but the bank has never forclosed on the property so they can't sell it to me either.
Now I find out that a certain trust holds the tax lein certificate on the property and has since 2000 or 2001. So far they have not done anything to get the deed to the property because the treasurer says the taxes can still be redeemed and that the trust has not taken any action on this property yet.
Is it possible to buy the tax lien from this trust and then forclose on the property my self :-?
I am totally confused about all of this and I would just like to have the property back in our family. I believe that this trust who holds the lien doesn't really want the property it is mostly wooded with no improvements and 15 miles (about 8 of that being dirt roads) from the closest town. but if its possible to buy the lien from them I don't have any idea how to approach them or what to do with the lien if they did sell it.
Any help with this matter would be appreciated
memenpop
Hi MemeNPop,
If you buy the tax liens from the trust, you cannot foreclose on the property while bankruptcy is in progress, unless you get from the bankruptcy judge a "lift of stay".
Your best option is to contact the bankruptcy trustee, and ask him if he plans to sell the property, and if so what mimimum offer (sometimes referred to "stalking horse" offer) he would consider. Make that offer if it's reasonable to you, and tell the trustee to keep you posted on better offer he receives (in many cases even after the trustee accepts your offer, he will continue to market the property and sollicit better offer until the court approves the sale to you).
If the trustee indicates that he has no interest in that property, I believe you should be able to buy it from the owner (probably after following some formalities).
If you acquire the property from the trustee, you may get it free and clear of all liens, including the tax liens. If you get it from the owner, the liens will still be attached. You can then redeem them, either right away or when they start applying for a deed.
Btw, I am not a lawyer. The above is my understanding of how things work. Double check everything with the bankruptcy trustee. And don't forget to make a LOW offer, you probably don't have much competition for that land. Ask the buyer for the trustee's name and phone. If you private message me the case number, I may be able to get you the trustee's name and phone number.
[addsig]
Simple answer - Yes if the state has a process for this. Effectively the lien can be sold or traded but check to see what the state process is for such a transfer.
As there is a BK and the lien holds might be willing to sell. They would have expected to get paid off at some point so now might be just fine with them.
You can speak with the BK trustee at the same time. I believe a BK will not wipe out a tax lien so even if you buy from the trust you would still need to settle the tax liens. Hence the idea to buy the liens (at a discount hopefully).
John
[addsig]
It seems unlikely to me that after 3 years this guys bankruptcy is still active. I'd contact his bank and try to buy the mortgage at a discount too-- sounds to me like this thing has fallen through the cracks someplace.
Assuming you bought either the mortgage or the taxes then it is a fairly simple matter to file a motion in BK court to lift the stay. Unless there is a ton of equity in the property it will probably be granted.
If the mortgage won't sell then the liens will probably get paid at some point but owning the liens would help pressure the mortgage holder.
If the Mortgage will sell then that gives you the right to pay the tax lien and add it to the mortgage amount.
Thank you all for your quick replies.
The bankrupcy was discharged in may of 2001 and the stay was lifted on the property in June of 2001. I believe that the tax lien on the property was sold at the october 2001 sale. so I am assuming that maybe the buyer forgot to include the tax debt in the bankruptcy.
The buyer is willing to sell the property to me or even just deed it to me but doesn't know if it is his right since he supposedly let it go back in the bankruptcy. But the bank never foreclosed after the stay was lifted. So the property is still in his name. This has also been verified by the bank. That they don't own the property.
Thanks again
memenpop