Tax Certificates in Alabama

3 Replies

When you buy a tax certificate for vacant land in Alabama,

1) Do you have to wait 3 years to get the tax deed and in the mean time have no right to the property

2) Do you still have to take possession of the land after getting the tax deed. What is there to take possession of vacant land? How do you establish possession? If you do not take possession for say a home or land, what are the risks?

3) After getting the tax certificate who pays the library dues, fire dues etc.. as the certificate holder is still not the owner but gets those bills?

4) Can the current owner of the property sell it without involving the tax certificate holder?

@Srini K.

1.  The tax deed is available three years after the auction. If you buy from the state inventory and it's already been 2 years, then you just have to wait another year. You are entitled to possession. For vacant land, it pretty much means you have to file an ejectment lawsuit to establish that.  If the owner redeems, they also have to pay your legal fees for the ejectment, though.

2. You must have three years of possession to burn off all redemption rights. Sometimes that does not happen until after the tax deed.  If you do not take possession within 3 years after the tax deed date, or file an ejectment lawsuit within that time, you risk the owner being able to file a lawsuit and get the property back without paying you anything.

3. The certificate owner pays those, but they are reimburseable if there is a redemption, plus 12% per year interest.

4. Yes, the current owner can sell the property.  If the new owner gets title insurance, the title company will usually discover the tax sale and redeem at closing. If the new owner does not get title insurance, then all they've bought is the right to redeem.

Thanks for the info. Any ideas on how much it costs and any referrals for ejectment lawsuit? Little confused why ejectment lawsuit for vacant land as no one there? I assume you have to do that for vacant or occupied homes? So I understand the owner loses right to possession once some body buys the tax certificate? If So, if the owner sells  the property can the new property buyer still take possession of the property without redeeming the tax certificate?

@Srini K. , it is difficult to factually prove you are in exclusive possession of vacant land. If your facts are not strong, or the judge or jury just do not believe them, you run the risk of court saying you did not occupy exclusively and continuously, you did not burn off redemption rights, or you did not possess before the time limit and you lose everything. Ejectment does not just physically eject someone, it also legally ejects them. It puts you into possession even though you might not be in physical possession. It counts the same, legally, as if you built a fort on the land and put armed guards in the fort to keep intruders off.

Possession and ejectment issues are beyond my ability to explain in just this post, because it takes too long.  I'm sorry.  An ejectment lawsuit with a default judgment will take around $750 and 3 months.  If they fight it, it's only because they want to redeem. If that happens, they have to pay your legal fees, also.