Alabama tax sale investors are entitled to possession of the property even though they might not get a deed for another three years. "Sold to State" properties are parcels that were offered at a past annual tax sale, and were not purchased at that time. The Owner loses his right of administrative redemption to the Property once the tax deed is delivered to the Tax Purchaser (whether the Tax Purchaser originally purchased the property at the tax sale or purchased the tax deed from the State). As of the 2019 auctions, all counties except Baldwin, Calhoun, Cherokee, Cullman, Emore and Shelby sold tax certificates. My goal is for you to understand your risk in this situation, so you can then make an informed decision about whether to risk it or not. Judge signs order maybe 5 days later. The IRS can redeem and then seize the property afterwards, but that never happens! A person is in âpeaceable possessionâ as opposed to âscrambling possessionâ when at the time of the lawsuit no other party is denying that the person is in possession of the Property. Often, they just throw the lawsuit papers in the garbage. I see it has a big IRS lien against it. You may request a price quote for State held tax delinquent property by submitting an electronic application. But the Owner retains a right of âjudicial redemption.â Judicial redemption requires the filing of a lawsuit against the Tax Purchaser (or the filing of a counterclaim in an ejectment action brought by that Tax Purchaser) and the payment of specified sums into the court in which that action or counterclaim is pending. You can contact an Alabama real estate attorney if you would like legal assistance with a real estate case or adverse possession matter, or if you want to understand your rights and responsibilities as a landowner. If the Owner fails to pay the Taxes, the probate court of the county in which the Property is located may order the sale of the Property. Buying a property through a tax sale requires due diligence but attend enough auctions and do enough research and you may find a diamond-in-the-rough. As provided by Code Sections 40-10-21 and 40-10-132, the State of Alabama RevenueDepartment offers for sale tax certificates and tax deeds, which are currently in the possession … As real estate investors, we all take risks. The IRS lien goes off the property unless the owner redeems. To redeem, the original owner must tender the amount the investor paid to purchase the Alabama tax lien certificate plus 12% per annum on the minimum and the overbid (see notes on bidding). The winning bidder at an Alabama tax sale is the bidder with the greatest bid. Every case is different, and each case must be evaluated on its own facts and circumstances as they apply to the law. When the Owner has paid the required redemption amount to the court, âthe court shall enter judgment for the [Owner] for the land, and all title and interest in the land shall by such judgment be divested out of the [Tax Purchaser].â. Would I still have to file an ejectment lawsuit and wait 90 days before I can do anything to the property? Jefferson and Shelby Counties, has become very profitable and lots of new investors are getting involved from across the country. Do you have any plans for it?" I literally walked in and changed the locks. The Owner has three years âfrom the date when the [Tax P]urchaser became entitled to demand a deed therefor.â However, this three-year period does not begin to run until the Tax Purchaser is âin adverse possessionâ of the Property and is entitled to demand a deed to the Property. You MUST understand the rules if you are going to be able to take advantage of this and also stay out of trouble. If the tax sale of an item produced more cash than the full amount due in taxes, assessments, penalties, and costs, the overage must be applied to any outstanding municipal tax liens on the property. The valuation of a case depends on the facts, the damages, the jurisdiction, the venue, the witnesses, the parties, and the testimony, among other factors. Find local real estate meetups and events in your area. Where there is no real occupancy of the Property (for instance on unimproved land or an empty lot), constructive possession stays with the Owner and can only be cut off by the adverse possession of the Property by the Tax Purchaser. I have a tax lien turning into a tax deed this year. The only exception is if the property is legally abandoned. After the three-year period has run, the Tax Purchaser may quiet title to the property by suing all persons claiming an interest in the Property. Going into a vacant property and changing the locks is almost never peaceable. If you are an Alabama tax certificate investor, and you have had any county redemptions in the past year or so, you have probably received a “REDEMPTION AFFIDAVIT” which you have to fill out, sign, have notarized and return to the appropriate party. Let’s assume the value of a property in a tax deed sale is assessed to be $100,000 and has $5,700 in back taxes. In essence, âadverse possessionâ requires the Tax Purchaser to control the Property openly, exclusively, and continuously from all other persons for a specified period of time. The property needs a lot of work and the owner had $100,000 of IRS liens against him before the auction. What happens then? If the Owner fails to pay those taxes, then the Property could be sold to a potential purchaser (the âTax Purchaserâ). If it's turning into a tax deed this year, that probably means May, right? So, let’s start with that. The redemption period for a property tax lien is the amount of time the homeowner has to pay off the lien and avoid foreclosure. have been subsumed under this single unified tax system. The Alabama Code regarding tax sales provides the Tax Purchaser a statutory exception to the requirement of the legal title when pursuing an ejectment action against the Owner. Fill out this form to Foreclosing against the property may also be done through a tax deed sale. In a tax deed sale, a property with unpaid taxes is sold in its entirety, at auction. If the Owner fails to redeem his interest in the Property within three years after the tax foreclosure/sale, the Tax Purchaser may demand a tax deed (or the State may sell one) that extinguishes the Ownerâs legal interest in the Property. Start analyzing real estate properties, we do the math for you. If the State purchased the property at the tax sale and later sells the property to a private party (also a âTax Purchaserâ), the Tax Purchaser is entitled to a tax deed granting him âall the right, title, and interest of the state in and to such landsâ and providing him âall the rights, liens, powers, and remedies, whether as a plaintiff or defendant, respecting said lands as an individual purchaser at the tax collectorâs sale would have in similar circumstances.â Delivery of a tax deed to the Tax Purchaser extinguishes the Ownerâs âlegal titleâ in the Property. It is less than one mile from the University of North Alabama. Suppose, instead, you spend a lot of money fixing up the property and it looks really great. If there is no bidder, the State of Alabama buys the land at the amount of the tax lien. Because the three-year period for the Owner to judicially redeem the Property does not begin to run against the Owner unless the Tax Purchaser adversely possesses the land, the right of judicial redemption remains in the Owner âwithout a time limit if the owner of the land seeking to redeem has retained possession.â So, for example, if the Owner remains in his home though it was purchased for taxes and the Tax Purchaser obtained a tax deed, the Owner retains his right to judicial redemption for so long as he remains in the home. That is not your out-of-pocket expenses, but the amount you increased the value. Less than 90 days later, you can have a final and non-appealable court order that gives you legal possession and completely protects you for a WIDE variety of things too extensive for this one blog post. Been tried by others and doesn't work according to the Alabama Supreme Court. The probate court must sell the property at the tax sale for at least the amount of the tax lien (i.e., the amount of Taxes owed plus late fees and any other fees due). Tax Sale List: Use Alabama Tax Sale Lists to search for Alabama tax lien certificates to buy or bid on. So, let's say you have a tax certificate. Legally abandoned means the owner told you they have no intention of ever doing anything with the property and have turned their backs on it forever. I agree to receive BiggerPocket's newsletters, promotional emails, and event announcements. Once there is a tax lien on your home, the taxing authority may hold a tax lien sale. If you ever broke that speed limit, you knowingly accepted some risk, thinking it would probably be okay and you would not be ticketed or lose control of your vehicle and crash. If you signed up for BiggerPockets via Facebook, you can log in with just one click! Foreclosure Investors Beware: Existing Tenants Cannot be Evicted. I agree Denise, Tax Lien investment in Alabama, esp. Furthermore, no representation is made that the quality of the legal services to be performed is greater than the quality of legal services performed by other lawyers. With the roll-out of the Goods and Services Tax (GST), several taxes previously applicable on real estate purchase (VAT, service tax, etc.) Many counties are suspending property tax sales and tax foreclosures due to the COVID-19 emergency. Anything less than that is only vacant and neglected. This section covers some of the more common legal issues facing homeowners and tenants, such as the state's rules and regulations governing leases and rental agreements. If the property is occupied, you will have to take a few more steps in order to obtain possession. Using a phrase of random words (like: By signing up, you indicate that you agree to the. A property owner (the âOwnerâ) holds the title to a parcel of real property (the âPropertyâ). Litigation was required to force their removal from the Property." You are not entitled to possession with a tax lien. We're Alabama Tax Deed Investor's Group and we are Tax Certificate and Deed Professionals who specialize in Birmingham and Surrounding-areas Deeded Properties. Notice of the Tax Sale Before the sale, the tax collector must first get a court decree from the probate court, authorizing a sale. A tax lien sale is a method many states use to force an owner to pay unpaid taxes. The theory behind the rule is that the person putting the property to productive use and paying for the taxes and maintenance of the property should become the owner of the property after a certain amount of time expires. 418 Collier Av, Florence, AL 35630. People always ask me, "What if nobody has been there for years and all the neighbors say the owner moved away to another state? Any Tax Purchaser must be certain to either obtain peaceable possession of the Property or file an action for ejectment within three years of the time the Tax Purchaser was entitled to demand a tax deed for the Property. Where and how it works. They don't understand why you filed a lawsuit to get them out of a property they are not currently using anyway. Eye-opening information. The Tax Purchaser is immediately entitled to possession of the Property and may demand possession from the Owner. Then you buy at the auction. That is when someone can quiet the title. Connect with 1,000,000+ real estate investors! Which Bankruptcy Chapter is Right for Me. Adverse possession is a law that governs the ownership of real property in that it allows someone who is in possession of the land that belongs to another person for certain period of time to claim that property as their own and gain legal title to it. I would like to take possession legally. If a Tax Purchaser (not the State) bought the property at the tax sale, the Owner may redeem the property from the Tax Purchaser âat any time within three years from the date of the sale.â This is known as âadministrative redemption.â The Owner may administratively redeem the Property by paying to the probate court in the county in which the Property is located the purchase price plus (1) 12% interest per year from the date of the sale, (2) any insurance premiums paid by the Tax Purchaser, and (3) the value of all âpreservation improvementsâ made by the Tax Purchaser (also with 12% interest from the date of such premium payments or improvements). Tax Delinquent Property and Land Sales About. An ejectment action normally requires a showing by the plaintiff that he has either legal title to, or possession of, the property, and that the defendant has either unlawfully entered upon or detained the property. A tax sale certificate transfers "tax sale title" only, which means the purchaser’s interest in the property is subject to the right of redemption. If you think you'll get a default judgment, then the times are as follows: File lawsuit; maximum time before can take a default judgment: 30 days. That is a very simple and inexpensive lawsuit. I always intended to fix the property up myself. Generally most Alabama tax sale lists will identify the property owner, parcel number, legal description and the amount due. All properties on the state inventory are tax certificate properties, no matter what county. The overall costs involved in buying a property are broadly divided into two components – the first being the one paid to the builder/seller and other, the statutory and legal costs, to the government. If the State purchased the property at the tax sale, the Owner may redeem the property at any time before title passes out of the State. In some cases, the tax sale list may include the tax collectors assessed value of the property. If a tax lien has a higher priority than another lien, the other lien is wiped out at the time of sale. Some other lawyers disagree with me. Judge Sawyerâs excellent description is summarized a bit further here to give you a better idea of what rights the Owner and Tax Purchaser may have and when they can exercise those rights. I think the answer is no. (For details on the tax sale process in Louisiana, see What Happens If I Don't Pay Property Taxes in Louisiana .) The amount you’ll have to pay to redeem … Not one red cent. Also, you will not be paid anything for your preservation improvements. However, in 2016, Judge Sawyer of the United States Bankruptcy Court for the Middle District of Alabama undertook a detailed examination of the tax sale procedure and redemption rights. An ejectment action normally requires a showing by the plaintiff that he has either legal title to, or possession of, the property, and that the defendant has either unlawfully entered upon or detained the property. One thing you can do with your final non-appealable ejectment order is start making your preservation improvements, and be confident you will be paid for the increased value if the owner redeems. (2) When processing a redemption of a tax sale that occurred after January 1, 2020, the Redemption Official is not required to verify that costs or expenses provided in §§40-10-122(b) through 40-10-122(e), Code of Ala. 1975 have been paid for the proposed redemptioner to take possession of the property. Requires due diligence but attend enough auctions and do enough research and you may request price! Foreclosure investors Beware: Existing Tenants can not be paid anything for your preservation improvements is in the property,... 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