What Happens To Unpaid Taxes For Subsequent Years??
If you are the successful bidder at a tax deed auction based on an application for tax deed that is filed for delinquent taxes from 2001 that were paid (by someone other than the homeowner), do you still have to pay the delinquent taxes that remain unpaid for the years 2002 and 2003 when you take title to the property? If I am understanding the scenario correctly, it appears someone paid off the taxes from 2001 and now after the 2 year redemption period is attempting to foreclose on the property ... it will go to the highest bidder at the sale ... but what about the taxes from subsequent years that were never paid?
I worked a few of these for a relative. Hopefully this will answer your question, but be sure to check your State law for variations. In my state, once you purchase the "lien certificate", the owner has only prior to the next annual sale to redeem (not 2 years). If your laws are the same; the redeption period for 2000 would be just about up. Someone must have the certificate for 2000 or prior. The investor can then exchange the tax certificate for a tax deed (not title) at the counties office. If the investor wants title to the property, he/she must serve notice to all interested parties, file proof of service, and wait 6 months before beginning court action. 2001 would have just been purchased in 2004(probably by the person owning prior years) in order to protect their interest until writs etc have taken place with the courts, after which they can take title. All prior liens and mortgages are wiped out (except Federal). You may want to check for Federal liens before bidding. If this process is complete, say before the sale in 2006, the 2003 taxes will not have acquired a lien. Hope this helps
Thanks for the quick response ... this makes quite a bit of sense. I understand that once the redemption period is up, you still have to foreclose (by giving notice, etc.) on the tax lien that you paid in order to take title to the property. So I guess any delinquent taxes for any subsequent years will indeed still have to be paid once you take title, right? In other words, delinquent taxes from the years 2001-2004 (using your example) are not extinguished by the sale for the paid taxes from year 2000? And in what state are you located? Just curious ... thanks.
Ekoc--(FL)----------------
Every state has different statutes relating to the collection of delinquent property taxes. You need to study the law for Florida. Go to the law library to read the anotated statutes. Read websites of county treasurers or tax collectors. Some may have good information about tax liens and tax sales.
Good Investing**********Ron Starr**********
You do need to reference Florida State statues. I am located in Michign. Here, if that forclosure process is complete, before the subsequent year(s) produces a lien (3 years from tax date), they will be wiped out. If someone has started court proceeding based on a 2000 certificate. They will need to purchase 2001 to protect their interest, because of 6 month statutory period ets. However that process will probably be complete, before 2002 goes up for sale in 2006, wiping it out. Remember you are purchasing the lien, which takes place in the 3rd year of non-payment. Again check your state statues. The basics are the same, but in some states the certificate holder can apply for the title, whie in others it is sold at auction, and you are paid your fee plus interest, if you are outbid. Hope this helps.
You do need to reference Florida State statues. I am located in Michign. Here, if that forclosure process is complete, before the subsequent year(s) produces a lien (3 years from tax date), they will be wiped out. If someone has started court proceeding based on a 2000 certificate. They will need to purchase 2001 to protect their interest, because of 6 month statutory period ets. However that process will probably be complete, before 2002 goes up for sale in 2006, wiping it out. Remember you are purchasing the lien, which takes place in the 3rd year of non-payment. Again check your state statues. The basics are the same, but in some states the certificate holder can apply for the title, whie in others it is sold at auction, and you are paid your fee plus interest, if you are outbid. Hope this helps.
In florida usually the sale starts at the outstanding taxes for the property - not just the price of the lien for a year or for the certificate.
In most instances - the holder of the certificate who requested the tax deed and hence the sale has to pay all the outstanding taxes, advertisement fees, etc. - the property is then offered at sale (if not redeemed) for the price of all outstanding debts.
I am in FLorida so let me know the county the property is in and I can let you know their stance on things
Yes, Linny ... you are right. I read the FL statutes and I understand it now. Thanks!
Now my only remaining concern is whether there are any other types of liens that may burden the property once you successfully bid on a property at the tax deed sale? I assume federal tax (IRS) liens will not be wiped out, if they exist. What about mechanics liens, etc? (I know mortgages are wiped out.) Is a title search advisable, in this instance? Anyone? Thanks in advance.
Once it goes to the tax auction all liens except the governmental ones are wiped out.
That does not mean you might not have a fight on your hands.
Since my budget is small - tiny really - I stick to land purchases as less hassles with liens and such. You do have to research thoroughly as Florida has a lot of wetlands and such.
Quote:
On 2004-05-09 11:33, ekoc1908 wrote:
Thanks for the quick response ... this makes quite a bit of sense. I understand that once the redemption period is up, you still have to foreclose (by giving notice, etc.) on the tax lien that you paid in order to take title to the property. So I guess any delinquent taxes for any subsequent years will indeed still have to be paid once you take title, right? In other words, delinquent taxes from the years 2001-2004 (using your example) are not extinguished by the sale for the paid taxes from year 2000? And in what state are you located? Just curious ... thanks.
Sigh, that is not how it works in Florida. When the holder or the 2001 certificate asked the clerk to bring the property to the sale, he must pay off all other outstanding certificates on that property. That is why the base bid almost always exceeds a years taxes plus interest. Once he does this, his interest rate on the amount he has paid automatically goes to 18%.
You need to read the sale notice carefully because it will tell you what years taxes are being paid by the sale.
If you are the successful bidder, shortly after your purchase, you will receive a bill for the remaining taxes that are due. Depending on what time of the year the sale is held, that could amount to up to two years additional taxes. OUCH!