Tax Lien Redemption Problem (Took a loss in these streets......)

35 Replies

Purchased a tax lien.

Took possession.

Made repairs.

Received a redemption request.

Responded within 10 days with a bill for repairs.

Redemptioner received the bill (certified mail signed receipt) on 12/12/17.

Lawyer responded and named referee on 12/15/17.

We responded, naming our referee on 12/20/17.

Never heard back from lawyer or his referee.....

On 12-21-17, redemptioner went back to the tax collectors office and lied and say we never responded to the initial redemption request. They took his word, and allowed him to redeem & Judge Friday signed off on it.

We asked the tax collectors office clerk how did this happen and they said they had to know way of knownimg if he was lying or not. They went solely based on his word and the fact that we did receive the initial request. Was advised that in the future we should let them know when we get one and respond......WTF.

Anyway.................spoke to a couple of lawyers.  They said that mostly likely the judge will not/can not rescind the redemption and our only course of action would be to sue the redemptioner for our money.  I don't have a problem with that.  Headed to the courthouse first thing in the morning.

Any advice? 

@Denise Evans @Roy Oliphant @William Jackson @Alisha D.

is it a significant sum?.. if not cost of doing business and move on and learn your lesson.. In our state you would lose trying to sue after the fact.. the only thing your entitled to is any money spent to secure the property and keep it from getting damage.. say you patched a roof or replaced a window.. anything past that your out of luck ( at least in our state) so be careful of blowing money on attorneys and just compounding the damage.. not to mention how are you going to collect even if you do win.. 

if you can go to small claims that only cost a token and your time.. that's worth doing if you think that is the best use of your time.

Originally posted by @Jay Hinrichs :

is it a significant sum?.. if not cost of doing business and move on and learn your lesson.. In our state you would lose trying to sue after the fact.. the only thing your entitled to is any money spent to secure the property and keep it from getting damage.. say you patched a roof or replaced a window.. anything past that your out of luck ( at least in our state) so be careful of blowing money on attorneys and just compounding the damage.. not to mention how are you going to collect even if you do win.. 

 It was a significant sum.  But now it is more of the principle of the matter, because he lied.  I have all the time in the world to sue this guy.

@Anastasia Jordan   one thing I learned in my early years of this business from my Daddy's real estate attorney.. is NEVER litigate over principal  Never do that.. 

I would consult an attorney if he has assets that you can seize after a judgement it might be worth your while  but no matter what the law says there is never any guarantees that a judge will rule correctly .

Another option might be to file for a new hearing  alleging fraud upon the court. Judges do not like being lied to.

Originally posted by @John Thedford :

Another option might be to file for a new hearing  alleging fraud upon the court. Judges do not like being lied to.

 Issue is judges don’t like kicking people out of their homes.  

File a petition in the probate court to revoke the redemption certificate because of the taxpayer's fraud on the court.   No matter who actually handles the redemption requests (tax collector clerks, for example) it is the probate judge's responsibility and the lie was a lie to the judge. Do this right away!!! Ask for an order against the taxpayer that they are not to do anything to the property until this is resolved. Do not file anything in Circuit court, no matter what some other lawyer tells you

Originally posted by @Jay Hinrichs :
Originally posted by @John Thedford:

Another option might be to file for a new hearing  alleging fraud upon the court. Judges do not like being lied to.

 Issue is judges don’t like kicking people out of their homes.  

 Check your PM Jay. It wasn't a home.

Denise Evans have some very good advice for your situation.

NEVER litigate over principal 

@Jay Hinrichs   my goal is to become wealthy enough I can spend all the time I want, litigating on principal, just for a hobby.

I think there is a number of ethically challenged buyers of redemption rights who hope you repair these properties before the redemption period runs out

@Ned Carey I am so with you.  It would be war if someone did that to me.  I would pay a specialist lawyer to file a bar complaint against the lawyer.  I would have lis pendens filed immediately.  If the judge did not immediately solve the issue I would be seeking writ of mandamus against the judge and the clerk.

I would be trying to have criminal charges filed.

Now... on the other hand, if the person came to me during the redemption period and said they wanted to redeem the property, I would work with them.  That means even if they were a little past the redemption period and I had clear title, I would let them have it back for the redemption price.

Rule one... is the golden rule.

Update: Emergency petition has been filed.

Oh....and FYI, an emergency petition is $703 extra. 

Wow, it is getting to the point where I almost do not want to invest in Alabama Tax Liens.  Georgia is looking better and better.

Good luck on this. There are so many ways to get hurt in this business without running into these kinds of people. 

Originally posted by @Helen Kirk :

Wow, it is getting to the point where I almost do not want to invest in Alabama Tax Liens.  Georgia is looking better and better.

 I could see how this one incident could push an investor out of the game.  I'm determined to go even harder now.

Originally posted by @John Thedford :

Good luck on this. There are so many ways to get hurt in this business without running into these kinds of people. 

 He already did federal prison time for tax fraud. He is certified as the kind of fool that would lie to a judge.

Originally posted by @Steve B. :

I think there is a number of ethically challenged buyers of redemption rights who hope you repair these properties before the redemption period runs out

 It don't work that way in Alabama. They have to pay you for the value of improvements. I've never personally had a property redeemed from me after I hit them with that bill.  This fool is just trying to be slick but I got him.

How does the redemption interest rate calculated? Daily, Monthly or Yearly?

Originally posted by @Khanh Tran :

How does the redemption interest rate calculated? Daily, Monthly or Yearly?

 Annually @ 12%. That 12% applies to the taxes, insurance premiums, and value of repairs.

Very costly to redeem down here.

I am from Indiana and then whole situation differs from how we do it. How did you take possession and the owner was still able to redeem. We have a 1 year redemption period were it'  still theirs anf you are not allowed to do anything to the property. If you do notifications correctly and they don't redeem, the court signs off and it's yours. You still technically still want to do a Quiet title so it is indisputably yours. 

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