Tax Deed Auction Questions (New York State)

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I am considering purchasing a tax deed property at an upcoming auction in my area (Western NY). I have a couple questions that I am wondering if someone could shed light on.

1. What happens to any existing liens against the property (mortgages, home equity loans, etc)

2. What is required to make the house livable (certificate of occupancy, surveys, etc)

3. Are there any restrictions on sale of a tax deed property

4. Are there any restrictions on taking loans against a tax deed property (home equity line of credit)

These are the major questions that I still have regarding this investment strategy. If someone could shed some light on, or point me in the direction of somewhere I could find the answers it would be greatly appreciated!


I don't have any experience but here are my 2 cents.

1. You should talk to a real estate attorney about this one

2. What the house will need greatly depends on the existing condition. But it's my understanding, once you own it you can do just about whatever you want with it. Certificates of Occupancy are usually needed after 3 units. It's best to check with the city/town on if it's going to be needed for whatever property you get. Just an FYI, I've seen tons of multi-family properties with no Cert. of Occ. and I've only seen issues come up when it gets sold to a buyer using financing. That being said, it's always a good idea to have it.

3. No general restrictions that I personally know of, but I could be wrong. On an individual (property by property) level there might be.

4. Same as above, nothing I know of, but this is not my area of expertise. It might be a good idea to talk to your loan officer.