Purchasing Property at a Tax Deed Sale

If you have purchased property at a tax deed sale, a public auction where property is sold to recover delinquent taxes, then there are a variety of legal issues you may need to address before you can successfully and profitably sell your tax deed property.

The first and most common issue successful bidders encounter is the title to the subject property is uninsurable. Without being able to obtain title insurance, the likelihood of selling your property is greatly reduced. The most common way to obtain insurable and marketable title is through an action to quiet title. An action to quiet title notifies all parties who may claim an interest in the property that they must respond to the action or their interests will be forever quieted, provides them an opportunity to raise any valid defenses, and if no valid defenses are raised, the court will issue a judgment “quieting title” into the plaintiff’s name. Generally, the only valid defense to an action to quiet title is that one of the parties actually paid the delinquent taxes or that they never received notice of the sale. However, even if that is the case, a strong action to quiet title may result in a lien being placed on the property in your bid amount, it may additionally cover any reasonable improvements or expenses to the property.

Another issue you may encounter after purchasing property at a tax deed sale is that an individual is still residing in the property. Depending on your circumstances, an action for eviction or ejectment may be required. An eviction action is when a tenant continues to reside in the property. An action for ejectment is appropriate when an individual is claiming an ownership interest in the property.

Purchasing property at a tax deed sale is a great way to invest in real estate, however, it can become a time consuming and costly process if you proceed without proper legal guidance. Our experienced real estate attorneys are ready to help save you time and money in all of your real estate endeavors. The above information is for educational purposes only and is not legal advice.