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

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

Anastasia Jordan

Investor · Birmingham, AL · Member since 2016 · 446 posts · 305 votes

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.

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Ned CareyPro Member

Moderator

Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes

8y

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

See this reply in the discussion

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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
8y
BEST OF luck! Bad guys should never win!
2 Reply
Anastasia Jordan
OP
Investor · Birmingham, AL · Member since 2016 · 446 posts · 305 votes
8y
Judge Friday is sick. Rescheduled for June 28th at 1:30pm.
0 Reply
David Tubesing
Rockford, MN · Member since 2017 · 87 posts · 31 votes
8y
Originally posted by @Anastasia Jordan:

Judge Friday is sick. Rescheduled for June 28th at 1:30pm.
Sorry to hear that.

Ugh.
0 Reply
Reuben Gathright
Investor · Lake Charles, LA · Member since 2015 · 70 posts · 48 votes
8y
@Anatasia Jordan,
I have been watching your activity here for at least a year and many posts on these forums warn about refurbishing tax lien property before the redemption period has expired. You were given due process warning by us!
Let everyone here use this as an example for your own tax lien / tax title investments!
The Gulf Coast region of the US is a warm humid place which wreaks havoc on neglected homes. The urge to renovate these homes prior to tax lien maturity is strong but you just cannot legally do this and have any form of protections. While the OP here is going to sue, we all deep down know that civil suit will be very costly and time consuming.
LESSONS:
1) Don't renovate these properties until you have a mature tax deed or a quiet title judgment
2) Consider the cost of demolition vs. renovation for these properties. Often the land is still worth more than we paid in taxes.
3) Always assumed you are being watched by the former owners of any tax lien property.
4) While likely not applicable to OP situation, entering an unmatured tax lien property in some states is viewed as trespassing under the law since former owners still hold rights to the land. As a result, the owners have the right to defend their property as allowed by law! Watch your back folks before becoming cavalier like OP has!
0 Reply
David Tubesing
Rockford, MN · Member since 2017 · 87 posts · 31 votes
8y
@Reuben Gathright
I just wanted to note this is Alabama - and Alabama is a totally different game.
2 Reply
Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
8y
Reuben, everything you said is wrong for Alabama. Yeah, the laws are different.
3 Reply
Reuben Gathright
Investor · Lake Charles, LA · Member since 2015 · 70 posts · 48 votes
8y
@David Tubesing
ASSUMING YOU ARE THE TAX DEBTOR: Just because someone owns the tax lien to your home, does not give them the right to perform repairs and then charge you for those repairs as part of the redemption of the tax lien. The tax lien owner could abuse their right and overcharge or make unnecessary repairs.
The core legal principle to know is that the delinquent tax debtor has the right to live on the property until your tax lien matures. Leave them alone once due process notification of the tax debtor has been completed and the redemption period has not expired. Now, you should contact local government and request regular mowing of the property if it is overgrown. Those costs are added to the tax lien and follow a notification process as well.
REFERENCE:
How Long You Get to Redeem After a Tax Lien Sale in Alabama

In Alabama, you can generally get your home back after a tax sale by redeeming it within three years of the sale date (Ala. Code § 40-10-120). (An owner who retains possession may redeem without a time limit.) (Ala. Code § 40-10-82).
SOURCE: https://www.nolo.com/legal-encyclopedia/getting-yo...
0 Reply
Denise Evans
JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
8y
@Reuben Gathright, your assumptions do not apply to Alabama, which has very unique tax sale laws. In Alabama, you receive a tax certificate shortly after the auction. A matter of a few weeks. That gives you the right to immediate possession. If the property is abandoned, you can take self-help possession. If not abandoned, you can file an ejectment lawsuit against the taxpayer (who will also have to pay your legal fees if it redeems. If the property contains a residential structure, you can make repairs to make it habitable again and also things to preserve the value--such as painting wood siding and trim, etc. If the taxpayer redeems, he must pay the investor for the regular taxes and interest, PLUS however much the investor increased the value of the property through his repairs and preservation improvements. If the property is located within an official urban renewal or urban redeveopment district, then it does not matter if it has a residential structure or not, plus all repairs, capital improvements and upgrades are recoverable. This has been the law for over 100 years, and amply supported in statutes and hundreds of appellate decisions. There is no doubt or gray area here.
7 Reply
David Tubesing
Rockford, MN · Member since 2017 · 87 posts · 31 votes
8y
Originally posted by @Reuben Gathright:

@David Tubesing
ASSUMING YOU ARE THE TAX DEBTOR: Just because someone owns the tax lien to your home, does not give them the right to perform repairs and then charge you for those repairs as part of the redemption of the tax lien. The tax lien owner could abuse their right and overcharge or make unnecessary repairs.
The core legal principle to know is that the delinquent tax debtor has the right to live on the property until your tax lien matures. Leave them alone once due process notification of the tax debtor has been completed and the redemption period has not expired. Now, you should contact local government and request regular mowing of the property if it is overgrown. Those costs are added to the tax lien and follow a notification process as well.
REFERENCE:
How Long You Get to Redeem After a Tax Lien Sale in Alabama

In Alabama, you can generally get your home back after a tax sale by redeeming it within three years of the sale date (Ala. Code § 40-10-120). (An owner who retains possession may redeem without a time limit.) (Ala. Code § 40-10-82).
SOURCE: https://www.nolo.com/legal-encyclopedia/getting-yo...
I wanted to respectfully say this is advice I will not be following.
1 Reply
Michael Watts
Investor · Mobile, AL · Member since 2013 · 71 posts · 29 votes
8y
@Denise Evans thank you for all the great Alabama tax liens and tax deeds knowledge
2 Reply
Anastasia Jordan
OP
Investor · Birmingham, AL · Member since 2016 · 446 posts · 305 votes
8y
Court is tommorow. I will update y'all on how it went.
Oh, and the property we going to court about.....it is a strip club (located in an urban renewal zone...lol).
3 Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y
Originally posted by @David Tubesing:

Originally posted by @Reuben Gathright:
@David Tubesing
ASSUMING YOU ARE THE TAX DEBTOR: Just because someone owns the tax lien to your home, does not give them the right to perform repairs and then charge you for those repairs as part of the redemption of the tax lien. The tax lien owner could abuse their right and overcharge or make unnecessary repairs.
The core legal principle to know is that the delinquent tax debtor has the right to live on the property until your tax lien matures. Leave them alone once due process notification of the tax debtor has been completed and the redemption period has not expired. Now, you should contact local government and request regular mowing of the property if it is overgrown. Those costs are added to the tax lien and follow a notification process as well.
REFERENCE:
How Long You Get to Redeem After a Tax Lien Sale in Alabama

In Alabama, you can generally get your home back after a tax sale by redeeming it within three years of the sale date (Ala. Code § 40-10-120). (An owner who retains possession may redeem without a time limit.) (Ala. Code § 40-10-82).
SOURCE: https://www.nolo.com/legal-encyclopedia/getting-yo...
I wanted to respectfully say this is advice I will not be following.
its kind of universal any property subject to a redemption the buyer may just maintain and keep it from getting wrecked.. but any money spent on remodel or unnecessary repairs.. does not have to be paid back its at the risk of the buyer of the tax deed lien or foreclosure.
We had a case like this In Oregon were a large foreclosure buyer bought and he did not own the redemption rights stormed right in did a 50k remodel and the old owner redeemed.. by by 50k.
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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
8y
Originally posted by @Anastasia Jordan:

Court is tommorow. I will update y'all on how it went.
Oh, and the property we going to court about.....it is a strip club (located in an urban renewal zone...lol).
Good luck!
0 Reply
Anastasia Jordan
OP
Investor · Birmingham, AL · Member since 2016 · 446 posts · 305 votes
8y
My partner & new (at the last minute) lawyer is in the courtroom right now. I just want this to be over with.........
2 Reply
David Tubesing
Rockford, MN · Member since 2017 · 87 posts · 31 votes
8y
Originally posted by @Anastasia Jordan:

My partner & new (at the last minute) lawyer is in the courtroom right now. I just want this to be over with.........
Best of luck!!!! I'm super excited to hear back, Thank you for the update.

I've been thinking of you all day!
0 Reply
Matt Schelberg
Rental Property Investor · Baltimore, MD · Member since 2013 · 281 posts · 257 votes
8y
@Anastasia Jordan This is the thread of the month! How did it go in court?
0 Reply
David Tubesing
Rockford, MN · Member since 2017 · 87 posts · 31 votes
8y
This isn't the case in Alabama.

We have preservation improvements.

Originally posted by @Jay Hinrichs:

Originally posted by @David Tubesing:
Originally posted by @Reuben Gathright:

@David Tubesing
ASSUMING YOU ARE THE TAX DEBTOR: Just because someone owns the tax lien to your home, does not give them the right to perform repairs and then charge you for those repairs as part of the redemption of the tax lien. The tax lien owner could abuse their right and overcharge or make unnecessary repairs.
The core legal principle to know is that the delinquent tax debtor has the right to live on the property until your tax lien matures. Leave them alone once due process notification of the tax debtor has been completed and the redemption period has not expired. Now, you should contact local government and request regular mowing of the property if it is overgrown. Those costs are added to the tax lien and follow a notification process as well.
REFERENCE:
How Long You Get to Redeem After a Tax Lien Sale in Alabama

In Alabama, you can generally get your home back after a tax sale by redeeming it within three years of the sale date (Ala. Code § 40-10-120). (An owner who retains possession may redeem without a time limit.) (Ala. Code § 40-10-82).
SOURCE: https://www.nolo.com/legal-encyclopedia/getting-yo...
I wanted to respectfully say this is advice I will not be following.
its kind of universal any property subject to a redemption the buyer may just maintain and keep it from getting wrecked.. but any money spent on remodel or unnecessary repairs.. does not have to be paid back its at the risk of the buyer of the tax deed lien or foreclosure.
We had a case like this In Oregon were a large foreclosure buyer bought and he did not own the redemption rights stormed right in did a 50k remodel and the old owner redeemed.. by by 50k.
0 Reply
Peter M.
Rental Property Investor · DFW, TX · Member since 2013 · 953 posts · 910 votes
8y
Did you win your case?
0 Reply
Keith Grady
Birmingham, AL · Member since 2018 · 3 posts · 1 vote
8y
Originally posted by @Peter M.:

Did you win your case?
I second.
0 Reply
Demetria Cass
Rental Property Investor · Brookwood, AL · Member since 2015 · 9 posts · 3 votes
8y
Inquiring minds are anxious to find out what happened in court. I hope all went well.
1 Reply
Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
8y
@Anastasia Jordan ?
1 Reply
Anastasia Jordan
OP
Investor · Birmingham, AL · Member since 2016 · 446 posts · 305 votes
8y
Update: court didn't even last 30mins. The judge pushed it back to 8/6 because the previous owner's lawyer questioned the validity of it being in an urban renewal zone. The judge said we have to subpoena an official from the city to attest to this fact. We could not just use the MAP put out by the city. And some how the court date has now been moved to 11/29.
1 Reply
David Tubesing
Rockford, MN · Member since 2017 · 87 posts · 31 votes
7y
Any further update?

Originally posted by @Anastasia Jordan:

Update: court didn't even last 30mins. The judge pushed it back to 8/6 because the previous owner's lawyer questioned the validity of it being in an urban renewal zone. The judge said we have to subpoena an official from the city to attest to this fact. We could not just use the MAP put out by the city. And some how the court date has now been moved to 11/29.
0 Reply
Chris Johnson
Decatur, GA · Member since 2017 · 2 posts · 0 votes
7y
Originally posted by @Anastasia Jordan:
Update: court didn't even last 30mins. The judge pushed it back to 8/6 because the previous owner's lawyer questioned the validity of it being in an urban renewal zone. The judge said we have to subpoena an official from the city to attest to this fact. We could not just use the MAP put out by the city. And some how the court date has now been moved to 11/29.
How did everything go ?
0 Reply
ROTIMI OLUWO
Lawrenceville, GA · Member since 2014 · 41 posts · 18 votes
7y
OP, how much have you spent ? Suing on principle must be getting expensive . If you could go back would you do it again ?
0 Reply

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