Alabama and Tax Deeds

22 Replies

I purchased a tax deed from that state. From my understanding of the deed, the land is now my property. I had it recorded and assessed. now on the county website, it shows changed owner and list me as the new owner for the next tax year. I assumed that it also meant I have a right to sell it. Now I am being told I can only sell for tax interest because it is not a clear title. How do I clear the title? 

@Brandon Watson , At one time everyone thought you had to possess the property for three years after your tax deed before you could file a quiet title a lawsuit. Based on some intensive research I've done into the technicalities of quieting title, I think the "well understood rule" described above is just an urban legend that's been repeated so often, everybody takes it for granted.  I think that if you do  not have any unknown parties in the chain of title from assessed owner to your tax deed, and if you can find them and get service on them, and if you are in exclusive and undisputed possession of the property, you can file your quiet title lawsuit immediately.  Also, EVERY single tax sale appellate decision I've read that requires 3 years of possession after the tax deed date was a void tax sale. The law is clear in that regard, that if the tax sale is void, it takes 3 years of adverse possession to clear up the title.  I do not think the same rule applies if the tax sale is valid.

How do I determine if it is valid or not? This tax sale was from 2007. The assessors website shows an LLC as the original and only owner. My initial research lead me to believe that if it was already over 3 years, there would not be a wait. But under 3, you would be getting a lien certificate and would have to wait. Somehow I missed having to file a lawsuit to gain full ownership. Do I have any rights to do anything on the property until full ownership?

If the LLC was the owner on the date of the auction, and the LLC name was the one advertised and sold at the auction, then you won't have a void tax sale.

In Alabama, you do not buy tax liens. You buy tax certificates, which entitle you to possession of the property.  If the property contains a residential structure, you are allowed to make repairs, and a redeeming owner must pay you the VALUE (not the cost) of the repairs.  Usually, repairs increase the value of a house more than their actual cost.  There is a procedure you must follow, or risk not being paid anything at all. Read my blog post HERE.

If the property does not appear abandoned, then you must give written notice to vacate, and you must wait 6 months before filing an ejectment lawsuit to gain possession. If the taxpayer redeems when you file the lawsuit, they will also have to reimburse you for your legal fees in the ejectment.

Please read my blog post about redemption periods in Alabama, HERE.

Bottom line, tax sale investing in Alabama is incredibly lucrative if you know what you are doing, but can be extremely costly if you do not.  For that reason, there is not a lot of competition for Alabama tax sale properties, because people get burned, get scared, and exit the market. The rules are not complicated, but you must keep them in mind.

@Denise Evans , thank you very much for all of you info. I was notified yesterday evening that someone else had purchased a warranty deed on the same property several months back. Before, the assessors website showed me as the current and next tax year owner. Now, it still shows my name on 2017 but for 2018 its someone else. Does the warranty deed out weight the tax deed? If so, how do I get my funds back back? Do I get my funds back? Or is this one of those "you have been burned" situations?

@Brandon Watson , The tax deed trumps EVERYTHING except local government liens, like grass cutting liens, demolition liens, sewer assessment liens, and sometimes fire dues and library dues.  Local government can foreclose their liens, but must pay you taxes plus interest. They do not have to pay you for repairs.  Before making any repairs, check with local government and make sure there are no liens against the property. If you don't know who to call, start with the mayor's office if a small town, or with planning and zoning if larger.

The fact that the tax deed trumps the others just means they will have to redeem, same as the original owner.

@Denise Evans , Update on the Property: I finally got in touch with the assessor office. After talking with them, The land was reassessed to me. I was told since the tax sale was from 2007 the redemption rights does not apply. And, if the other party wanted the land they would have to buy it from me. Only question I have now is do I really need to file a quiet title action?

@Brandon Watson , do not obtain your legal advice from clerks in the Tax Assessor's office.  The fact that the tax sale was in 2007 is irrelevant. The relevant date is when you took possession and held it.

@Denise Evans , Their warranty deed is dated 3/30 and the record date is 11/28 if I remember correctly. My tax deed is dated 10/27 and the record date is 11/22. Also, the tax assessor said the company that sold it did not own it therefore could not sell it. 

I have a question. How long do you have to wait to file a quite lawsuit after receiving the tax deed? 

Right away


Originally posted by @Javan Avery :

I have a question. How long do you have to wait to file a quite lawsuit after receiving the tax deed? 

@Denise Evans

I have been researching a property for the past few weeks and today I came across some interesting information. It seems that in 2005 the property I was reviewing had a conservation easement placed upon it. The state auctioned the property 3 years post easement for taxes owed and nobody purchased it at the county sale. So it went on to the AL Dept of Rev site. My question is does the tax deed trump the conservation easement? Or if I obtain the tax deed would the conservation easement stay in effect, therefore hindering my ability to develop the property? Have you ran across this issue in the past? Any insight would be greatly appreciated. 

Thanks in advance!

@Kevin Cannady , I have not run across that issue. I did try to buy a property that had a perpetual easement for a billboard, and researched the easement issue in that context.  The law I found said that easement holders have to redeem, just like everybody else, or they lose their rights.  Can you send me a copy of the actual document creating the conservation easement, and maybe I can give you some better insights.

@Kevin Cannady and @Denise Evans , conservation easements are my bread and butter here in Colorado, so let me know if you need an extra pair of eyes. I'd be glad to finally be helpful to someone around here! Best of luck to you all.

@Account Closed , good to know! Thanks so much.  Do you have experience with the IRS tax deduction for conservation easements?

@ Denise Evans,

Could you point me in the direction of an attorney in Alabama who is familiar and confident with the legalities of tax sales? All of the attorneys I have spoken with tend to shy away from such dealings. Or do you practice law in Alabama? I saw where you were licensed in TX, just wasn't sure about AL.

Thank you.

My group works with Sylvion Moss you'll have to goolge her as we cannot openly give out the info I believe

Has any negotiated with the State on a quote? Successful?

I'm holding six tax DEEDS that I recently purchased directly from the state.  I want to file for Quiet Title on them, but the attorneys I've spoken with say I have to have possession for three years - period.  I agree with Denise and others on this thread that this wait only applies to voided (or voidable) tax sales.  My tax sales are valid.  Can anyone recommend a knowledgeable tax sale attorney that will begin the Quiet Title process for me now?

Updated 10 months ago

@David Tubesing

Updated 10 months ago

@Kevin Cannady @Denise Evans



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