Buying tax deeds

[Jason Varney]

Hi all,

If someone buys a tax deed at an auction, does that mean they now own the property? Does the previous owner have any period of recourse? If so, I'm assuming the time period depends on the state? Thanks!

[Patrick L.]

Well Jason is in FL so I'll answer regarding FL tax deeds. In FL a tax deed sale is a tax certificate that has been foreclosed on and goes to public auction. If you are the high bidder there you own the property and are entitled to immediate possession. Some liens will survive (such as any government liens) but the previous owner and other lien holders (such as the mortgage) will have no right of redemption providing they were properly notified of the sale. The last right of redemption by the owner is the morning before the auction runs, once it's sold then it's gone. If an owner or lien holder was not properly notified they can contest the sale in court but they'd have to pay you everything you put into it even if they won (according to my attorney). You however do not have clear marketable title to the property when purchasing a tax deed and in order to clear the title you'll need to do a quiet title action, which would cost around $2k.