Tax Deed In Alabama
I understand Alabama is not the greatest place to purchase a tax certficate/deed. I have purchased one certficate and it was redeemed. I now have an opportunity to purchase a tax deed on vacant land. It is right at the 3 year redemption period, but I understand the owner may have an additional 3 year period to redeem through me. I have also read that in Alabama you have to have possession. How do you "possess" vacant land? Any info would be appreciated.
John--(OR)---------------
You say " If you can not get insurance on the title that will be a flag that all is not well. It will also mean that selling or financing will be a problem."
I think that it is more accurate to say "Selling or financing MAY be a problem." Many people will seemingly buy low-cost vacant lots without requiring title insurance. Financing is similar. If the buyer has friends or relatives who will loan money, they might not require title insurance. And seller-carried financing is always a possibility. Unless, I suppose, you as the seller refuse to loan without getting title insurance on your loan.
For more expensive properties it might be more of a problem. And it is true that institutional lenders are not going to lend unless they can get title insurance.
But even these problems are not insurmountable. If the property is worth over about $5K, it might pay to do a quiet title lawsuit and then be able to get title insurance.
Good Investing************Ron Starr**********
It is just a little on the side and I have researched Alabama's laws, but surprise...they seem to contradict each other. Especially regarding the right of redemption and the time frame original owners have. We would have to do a quiet title to get title insurance. I have also read about a company called Tax Title Services, but don't know how legit they really are.
I am still confused about the "adverse possession". I mean, we could clear the land, etc. but I would hate to sink money into the property that I might not get back.
Someone correct me if I'm wrong, but this is the way I remember it:
Let's say a property owner has not paid the taxes on a property for a while. You step in and pay them and let the owner know you have done this. After a period of time doing this, the property becomes yours if the owner takes no action to rectify the problem.
Bob
Quote:
On 2004-06-22 20:26, bogie7129 wrote:
Someone correct me if I'm wrong, but this is the way I remember it:
Let's say a property owner has not paid the taxes on a property for a while. You step in and pay them and let the owner know you have done this. After a period of time doing this, the property becomes yours if the owner takes no action to rectify the problem.
Bob
Hi Bob,
I own a condo in California and a manufactured home in North Carolina. Next time I get the tax bill, I will be glad to forward them to you so you can pay them, let me know and hope to acquire the property that way. What's your address so I can send you my tax bills.
If you go to the treasurer's office and pay somebody else property taxes, you've just donated money to your favorite charity (that homeowner). If you are not that charitable minded, you should only buy tax liens or tax deeds.
[addsig]
In Alabama we have two “right of redemption” periods: administrative & judicial. Both are 3 year periods. The administration period starts when a purchaser gets a tax lien certificate from the actual local tax sale (at courthouse) or when the State of Alabama purchase certificates that were not purchased by an individual or company at the Tax Sale. The owner of the property can redeem at anytime by paying the delinquent tax amount plus any interest accrued on the amount to the respective municipality (County Tax Collector or State of Alabama).
After 3 years of holding a certificate or after the State has held for 3 years & someone purchases from the State after these 3 years, the holder or purchaser is entitled to receive a tax deed. This is when the 2nd “right of redemption” period starts (the judicial). During this period the previous owner has to redeem directly from the tax deed holder. If the two parties don’t see eye to eye on redemption price or whatever, they handle the matter with lawyers or a judge. It is my understanding that the previous owner would be responsible for paying any rent on leases or any contract you have on the property that will not be satisfied due to redemption in addition to the price you paid for the property and any structural or value improving changes.
Note…in both cases (with a certificate or a tax deed) the certificate/deed holder has a right to immediately possess the property through proper legal protocol if necessary (i.e. ejectment, evictions etc.). This is where the adverse possession comes in.
Adverse Possession is: The open and notorious possession and occupancy under an evident claim or right, in denial or opposition to the title of another claimant. Alabama requires 3 years adverse possession before a quiet title action can be filed. Adverse possession could be, personally dwelling in or on the property, renting or leasing the property OR in the case of land without improvements on it, cutting trees down, mowing grass, clearing weeds, building on the land etc. and being able to prove that you indeed were responsible for these actions and that you continuously did this for 3 years.
Ps… Make sure you have a tax deed before cutting trees on the property you have acquired; you can’t legally cut tree on lands acquired in a tax sale with a tax certificate but you can if you have the tax deed! Also let me know if you find out more on Tax Title Service, I have gone to their website but never actually called them to get details.
Hope this helps, but after it’s all said and done, I am NOT an attorney and you need to seek competent legal advice before acting upon any subjects discussed.
Thanks! That is very helpful. There is quite a bit of timber on the property. If we obtain the tax deed, would we have the legal right to cut the timber and sell it? I would hate to get sued over it if the owner tries to redeem during the 3 year judicial period.
It is my understanding that a previous delinquent tax owner can not sue or request you to pay any profits or rent you received while in posession of tax properties.
Code of Alabama Section 40-10-131
Rents, issues, and profits of redeemed land.
Neither the purchaser, nor anyone claiming under him, who may have lawfully obtained possession of any real estate purchased at tax sales shall be liable upon the redemption of such real estate to account to the owner for any rents, issues, or profits during such possession, but as to such rents, issues, and profits he shall be held and considered the rightful owner of such real estate unless such owner at the time of the sale was a minor or a person of unsound mind and had no guardian, or his guardian was not lawfully served with notice of the proceedings had in the court of probate for the sale of such real estate, in which event such purchaser or other person in possession shall be liable for rents, issues, and profits, as in other cases; but neither such purchaser nor anyone claiming under him shall have the right to cut standing timber from land so purchased at tax sales, nor shall have the right to remove or destroy any improvements on said property or commit waste until he shall have received a deed for the land from the probate judge, and anyone in possession shall have the right to growing crops planted by him.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §314.)