I bought a lot at a tax sale about 12yrs ago. I bought a number of lots that day and I've been sitting on them. I called an agent yesterday to get them all listed as the Builders are back. The agent called me yesterday afternoon about one of the lots. She was going to drive over to take a look and told me the aerial shows a house on it. I told her that there was no house (we drove past it after we bought it). She must have the wrong lot.
So she just called me. There is a house on it. Habitat For Humanity built the house a few years ago. She spoke with the people at the house. It's 6:30pn on the East Coast so I can't get any further info until Monday. I live 90 miles away so I'm not driving over.
Well, my tax assessment did jump (8 fold?) a few years ago and I called the County about it. I figured that maybe it had been rezoned to commercial or something. Anyway, this is a rural County and the tax appraiser is a contract worker so no one knew anything and there was no way to talk to the guy.
So ... maybe I own a 3yr old house. This could be very good or maybe I didn't get good title and lose my 4K. Anyway, it's sounds like it's going to be very entertaining!
This could be interesting to follow.
Please keep us posted. Should be an interesting read.
I'll definitely get to the bottom of it Monday. Just when you think you've seen it all....
I should pull the file and actually look at my latest tax bill as they separate land and improvements. Frankly, the entertainment value is worth the 4K that I paid for the lot! I guess you can surmise that I've been around the block and appreciate a good title issue!
Does the tax record show a house? Added when the assessment jumped?
@David Krulac - another tax sale oddity for you :)
Yes defiantly want to hear the outcome very interesting!
Did you try Google Earth? This is fascinating! I see your face in the news in the near future LOL!
This is fascinating, please do keep us posted!
That is a crazy story. I can't imagine how this happened. I could see an unjust enrichment claim potentially. Your best bet might be to try to arrange to donate the lot to Habitat and get a tax deduction.
@Jon Klaus , I think that I would have noticed this (but maybe not - as a stack of these relatively small bills come once a year and I just quickly write the checks). I'll have to go back and see what year it jumped and whether any "improvements" are now listed on the assessment.
@Sue K. , Since I had no idea that a house was being built I don't anticipate an unjust enrichment theory would prevail. It's not like I stood around and watched someone build a house on my property. And I did make inquiry to the County when the tax assessment jumped. The tax donation is appealing however. Thanks for the idea! Sounds like a win-win! The best scenario is that I have good title, a major screw-up occurred AND the "new owners" bought an owner's title policy and will be whole. I don't want to take someone's house from them - but I sure wouldn't mind a nice windfall!
Not as unusual a story as you might expect.
1. One of the caveats of tax sales is the disclaimer that they have their attorney announce at the beginning of the sale. Many people either ignore or don't understand the totality of the disclaimer. One of the thing they disclaim is the existence of the property. In other words they are not even saying that you are buying a property. you could be buying air and there is no recourse.
2. In one case a vacant lot was at the left side of a tax map. On the adjoining right side of the next tax map there was another vacant lot on the same street. When you went out into the field, between two existing houses not on tax sale there was only one lot. A mapping error created a vacant lot that did not exist. The only lot that existed there had paid there taxes.
3. In another case, through a series of errors on the part of sellers and buyers, as well as taxing authorities, two chains of title were developed for a single tract of vacant land. This error was perpetuated for 50 years, with two sets of owners paying duplicate taxes on the same parcel. When the latest parties discovered the error, they stubbornly refused to work out a deal among themselves. Instead they both decided it was more trouble than it was worth, so they both stopped paying their real estate taxes and BOTH parcels went to tax sale. Without a thorough title search of more than 50 years any potential tax sale buyer would not have discovered this error. To resolve this matter, it took a single buyer buying both chains of title at the tax sale and then going back to the county to have the one chain deleted from the tax rolls. Note, the county did not refund the purchase price of the bogus land, (see # 1 above.) though there was only one future tax bill.
4. There was another case that involved a house, which was at least 50 years old maybe as old as 100 years. In this case the house was built on the wrong property. The right property according to a more than 100 year title search was about 1 mile away! How that mistake happened is anybody's guess, not of the participants are around to answer that question. Probably the first thing you will think of is adverse possession. Not so fast. The house owners did not think their house was on somebody else's property. The rules to AP include that the possession must be open and hostile. This case was neither since the occupiers didn't think they were on anybody's else's property except their own, so not open and hostile.
5. In your case, you should check on the adverse possession time periods in your state they can range from 5 years to 30 years.
6. Also somebody may have done a Quiet Tittle Action to claim the property, and if they didn't have your address or you moved, you may not have gotten notice of the QTA. Without a proper address, the notice would have been by posting the property and newspaper publication. If you didn't see either of those notices, it could be a battle to regain the property.
7. There are many other tax sale circumstances that could result in more than one person thinking that they own a property.
8. This is not legal advise, as you find out more details, you may need to retain an experienced real estate attorney.
9. Tax Sales are the most hazardous way to purchase real estate. There is no seller's disclosure, there is no home inspections or other inspections, and usually in the case of building, you can't get in before the sale. People often get rid of problem properties that they can't sell, but not paying the taxes and letting the property go for back taxes.
10. Timely as this is, I will be speaking at the Bigger Pockets Meetup in Manhattan on April 28, 2015, hosted by Darren Sagar on the subject of Tax Sales. All are welcome to attend this free meeting, see Darren's announcement here on BP.
,Excellent outline of tax sale/title issues. I was fully aware of buying a pig in a poke. Many of these tax sale lots are land-locked, small slivers that are not buildable, swamp land, etc. And some don't even exist. I reviewed the tax maps provided by the County but also know that these can't be entirely relied upon.
In this particular area there are many tax sale parcels that are titled "A, B, C, and D, Heirs to so and so". I can imagine many scenario's where publication may have been deficient. But I can also imagine heirs that don't have money to pay taxes and just let the property go. I can say that I didn't receive notice of a quiet title action and that the County tax office has my correct mailing address.
The adverse poss. statute is 20yrs in Virginia. My thought immediately went to a break in the chain resulting in my purchase being outside the chain somehow. The dual tax bill idea and 2 chains may be the answer. I'll have to get a title search done. I'm quite sure that a search was done prior to the tax sale so that the proper parties could be noticed. But, here again, if there was a break and two chains - who knows what will be the outcome. 60 year searches are the norm here.
Yes, tax sales are a land mine and serious due diligence should be performed. As I stated, the lot was only 4K and purchased "on a flyer". I wish that I had followed up with the owner's policy...but it is what it is.
Yep, until you chain title and reverse engineer the property will you have a sense of what's going on. Your site inspection ought to be fun, too.
As for the $4K, how else can you have this much fun with your clothes on?
@Cheryl C. Did you ever find out what happened?
I spoke with the county and it might be a mistake in their map overlay. It could also be that the house is on our lot. This is a very old rural area and people often built without surveys. In fact the county still doesn't require a survey to issue a building permit.
Next step is to get a survey - that is in the works. I should look at the legal description (I still haven't located my purchase file - we moved last year and it's in some box in the garage) as it should be an interesting description - "from the rock for 300' to the cherry tree..."
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