Can The Owner Sell The Property During The Redemption Period?
I recently purchased a property that has no liens (that I was able to find with my due diligence) other than delinquent taxes but had been deserted. There is a one year right of redemption period in this state (TN). Does anyone know if there is a release that the redeemer (property owner) can sign to release the property prior to the end of the redemption period? If there were other lien holders on a property, how would that affect them? If the Owner of the property is willing to for go the redemption period, could one negotiate a settlement with the other lien holders or even with the owner to be able to file for a clear title and deed? Could one approach the owner of the property following the tax sale to purchase the property from them?
Just like my money to be working for me and not setting idle even though it is earning some interest.
Thank you for any information!
Scott
The property owner can sell during the redemption period. Or, in this case you could purchase a quick claim deed conveying their interest to some other entity. Go ahead and foreclose on you tax lein and you wipe out any other lein holders.
However the lein holders also probably have the right to redeem during the redemption period. (check your state law)
Does it make a difference that I hold a tax deed instead of a tax lien on the property. To my knowledge, in the state of TN at the completion of the one year redemption period, the holder of the tax deed only has to file for a deed transfer.
You can sell during the redemption period, but can you give the buyer clear title?
Brenda
In the State of Alabama, after a tax deed is delivered there is a 3 year judicial redemption period. A tax deed owner can sell or convey the tax deed. But it will not transfer as a Warranty Deed. It will transfer as a Deed Without Warranty but whomever buys it from us will have a Tax Deed interest in the property during this period. Meaning that Mr. Buyer needs to know the tax laws and know that the previous owners can try to get his property back during these 3 years.
A quit claim deed would be required to release the previous owners interest in the property, but in Bama it wont speed up clearing and removing the clouds off the title, because here we still have to hold it adversly for 2-3 years & quit claim will just speed up quite title action only after these years.
Yea I know our law stinks, but another investor told me "even though your backyard have more rocks than grass, at least you have a backyard to play in!"
Don't know if it all applys to your state, but hope it helps...
Gernerally anyone who holds a deed title can sell their deed title.
As for some of the other questions:
1. Can you reduce the right of redemption time -- according to the legal counsel I have used the answer is no. These are state (or county) statutes. I was advised that I could "buy" the redemption rights only if I held the tax deed for the property. (I'm not sure but I know it gets complicated in this area for the states I deal with and as I don't like complications I avoid them).
I'm not sure how to contact a property owner during this right of redemption -- in Illinois there are restriction on the contact a tax lien owner (not tax deed) can have with the property owner without risking their entire investment.
If someone has had a success either buying or reducing the right of redemption I love to hear it.
-Glenn
Scott J--(TN)-----------------
Well, study your state law on the topic so you don't run into some surprise.
If you don't want your money hanging out there in tax liens, don't invest in tax liens.
It seems that you are interested in acquiring the property, rather than the investment return from tax liens. About 2-5 % of delinquent property tax lien properties will actually go to deed. So mostly, you are not going be getting properties, you are going to get the investment return. If it is a good property, such as an improved one, or a nice large parcel of land, the probability of getting a deed goes down dramatically below the figures I cited above.
When I bought liens and wanted to try to get the property, I send courtesy letters to the property owners telling them that I could get a tax deed to their property. That motivated most of them to pay their taxes. You get your investment money back and on to other liens or other investments. Those that don't redeem, you have much higher probablity of getting the property.
You can offer to buy from the delinquent property owner. However, they are unlikely to agree to sell just for the back taxes. But, if you buy from them, you probably should conslut with an attorney. You might need to get a quitclaim deed, depending upon the law of TN.
No, the other lien-holders will not be effected by your maneuvering. They will still be owned what they are owed. However, you might get them to discount their liens and pay them off or buy them.
Good Investingt***********Ron Starr*************