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?
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.
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.
1. (...) 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.
@Denise Evans
Does the owner have to pay me legal fees if I file an ejectment lawsuit during administrative redemption period? I was under the impression that Section 40-10-83 only applies if an ejectment lawsuit is brought by a tax deed holder (judicial redemption).
@Thomas Kramer, it is confusing unless you know context. The beginning of 40-10-83 starts with "When the action is against..." The problem is, there is no immediate antecedent. What action? You have to read the entire Article in its entirety, all sections together.
The short answer is, "the action" refers to the action a purchaser is entitled to bring for possession, provided it has given notice and waited at least 6 months after the issuance of the tax certificate. That is earlier in Article 3.
For the long answer, you have to look at rules of statutory construction and the fact that 40-10-70 through 40-10-83 are all in Article 3 of Title 40, Chapter 10. That means they all go together, and should all be interpreted with reference to each other. From that, it is obvious that when 40-10-74 gives you the right to possession as soon as the tax certificate is issued (but limits when you can file an ejectment lawsuit to 6 months after taxpayer's receipt of notice with demand for possession) and 40-10-83 gives you legal fees if the taxpayer redeems in an ejectment lawsuit, both of those go together. The train does not suddenly jump the tracks some place and start limiting Article 3 to just judicial time periods. Article 3 is about possession, and all the details and issues related to possession, which is clearly granted as soon as the tax certificate is issued.
I think the confusion comes because of 40-10-82 and the short statute of limitations, which addresses only the judicial redemption time period. That is not the train jumping the tracks and heading in a different direction. That is simply a limit on the possessory rights granted by the statute. In other words, Rioprop, basically.
If you think of it this way:
40-10-83 gives you possessory rights and lets you file an ejectment lawsuit with only a tax certificate
Other sections address problems with the tax sale, burdens of proof, and tender, all having to do with technicalities of ejectment lawsuits
One section addresses a statute of limitations with reference to an ejectment lawsuit, and others
The final section addresses the remedy of awarding legal fees of the taxpayer redeems when ejectment is file.
@Denise Evans I really appreciate your helpful response! That makes it easier to understand. Thank you very much!
@Thomas Kramer, it can be very confusing, even for lawyers. You might find yourself having to argue with one who thinks you can get legal fees only in a judicial redemption. There is no law school course in "statutory construction" or that even forms a segment of some course about related issues. Law students and lawyers have to pick it up along the way. Unless they have to brief a lawsuit issue that involves statutory construction, it just never comes up. I was the director of the Legal Research Department at UA when I was a third year law student, so I did a MASSIVE amount of research for lawyers and judges all over the state. I also spot-checked the research of all the students working for me. As I result, I gained a lot of knowledge that simply is not taught in classes. It has really proved valuable all these years.
@Denise Evans Yes, it can be confusing. It seems like all information about the recovery of legal fees are related to judicial redemption. I was wondering what I can do if the taxpayer tries to redeem at the revenue commissioner's office after I file for ejectment. I guess I will simply not sign the affidavit until the legal fees are paid. That way the taxpayer can either pay the fees and redeem or would have to counter-claim. Again, thank you for taking the time to explain!
1. (...) 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.
@Denise Evans
Does the owner have to pay me legal fees if I file an ejectment lawsuit during administrative redemption period? I was under the impression that Section 40-10-83 only applies if an ejectment lawsuit is brought by a tax deed holder (judicial redemption).