The new process adopted by Shelby and Baldwin Counties, et al for tax lien sales in 2019 is a nightmare for owners, investors, the community, and the county. But the attorneys will prosper.
Owner's redemption time is cut by three years and there is no more physical notice requirement. Now a property owner can literally first find out their taxes are delinquent when they are being sued for the property.
Large Investors will stay away in droves because their incentive to invest in the county has been taken away by reducing interest rates and ending overbids. Small investors can no longer move in or rent so they will not buy liens.
The Community will suffer the most because the new law forbids buyers from moving in, renovating, securing, or even fixing a roof leak on these houses. End result: Vagrants, dilapidated houses, Meth labs, and more people struggling with housing.
The county will suffer when property values drop due to abandoned unmaintained houses in the middle of nice neighborhoods and the reduction in investor interest.
The greatest effect of this law will be that now, anyone that buys a tax property will have to hire an attorney. It just isn't possible for a person to judicially foreclose, eject, and quiet a title on the property without an attorney. Yay attorneys.
Gregory S. Stanley, Esq.
Greg, I understand your frustration, but I think that this offers a great opportunity for those many tax sale investors who incorrectly thought they needed only 3 years of seasoning to obtain a tax deed with no redemption rights. There are a large number of such investors. Now they have a strategy that meets their goals and expectations. Yes, they must do a judicial foreclosure, but currently they must quiet title. Depending on the need for a guardian ad litem, the costs are about the same. If you need a GAL for a quiet title, you'll need one for a judicial foreclosure. If you don't need one for a quiet title, you won't need one for a judicial foreclosure.
With a judicial foreclosure, there is no need for a quiet title also. I am looking forward to bidding in Shelby and Baldwin Counties this year, when the hedge funds will be boycotting those auctions. Most small investors were priced out of Shelby and Baldwin counties in prior years. This can only open opportunities for them.
I hear you Denise, but the code says the investor can quiet title concurrent with the foreclosure, which is not possible due to the QT possession requirement. I doubt these foreclosure/quiet titles prescribed by the new law can stand up to appeal and I doubt any title insurance company will issue on these deeds for two reasons: 1. A fundamental principle of taking another's property for taxes in Alabama is fair notice by adverse possession, three years of this notice in fact. Now that is gone for these owners. 2. This law appears to violate procedural due process on its face. I believe any quiet title order resulting form this code will be vacated leaving investors and property owners in court again.
Good points, @Gregory Stanley . The requirement of possession to quiet title under the 540 and the 560 code sections is statutory and jurisdictional, by definition in the statutes. The requirement of possession under common law quiet title was because of the lack of a legal remedy (at that time, ejectment was legal and quiet title was equitable) if you were in possession, because you could not file ejectment in order to try the title. As a result, you could be heard in equity to determine title issues, in the common law equitable quiet title action. Today, equity and law have been merged. Today, I think a statute can allow judicial foreclosure and quiet title in the same action and not be offensive to common law principles or violate constitutional due process. But, I love "arguing" with you about such things, because there is no right answer, in my opinion, and you always have good and well supported thoughts on the subject.
Hi Denise, yes always good to have intelligent discussion, thank you. When I was in Law School I don't think I could have predicted tax liens would be my sole area of practice, but its good when your hobby is also your occupation I think.
Only attorneys could follow that conversation! LOL! Thanks for being there for us!
I’ve been successful at tax liens in IL. My parents just moved to Baldwin County, AL. I’m seeing that liens are much easier to acquire ownership, and much quicker, in AL. What is the typical process once a lien is purchased? I’m also a little nervous about purchasing site-unseen. What do most do with the properties once they’ve acquired them? Rent them to the occupants/former owners? Flip & sell, rehab & rent? Sell in current condition to flippers?
Well, I grew up in Baldwin County as well! You asked about buying site unseen: There are several folks around the state that will do quick investigations and email buyers pictures of properties. Once a tax lien is purchased the world is your oyster. You can rent, sell, flip, rehab, hold, or move in. Buyers have different investment objectives and there is a strategy for each objective. My free advice is to ensure you have someone escrow the sale and check provenance of their title; that is, don't send your money to the seller hoping they will send you a valid deed back later.
Hi guys! I am a paralegal, so I can follow the conversation a little LOL!
So now I'm getting a little scared...I am "hoping"(if I ever hear back from the State of Alabama) to purchase 3 acres of vacant land in Shelby County. The tax deed is about 20 years old. I was hoping to purchase the deed, do the ejectment and quiet title under the proper timelines, and hopefully, one day, build my family's dream home on this property lol. Are you guys saying that the process has now changed? Should I walk away from this dream property? :)
@Ebony King , @Gregory Stanley , I'd need to know more details to provide better advice. There is an Alabama Supreme Court case holding that if something has been on the state inventory for more than 20 years, the title reverts back to the original assessed owner. If that owner died, then it flows down through to the heirs.
@Denise Evans Can I pm you?
Ebony, I think it may be time for someone to file a suit to force the state to accept and process best price offers on these properties such as the one you are looking at. Here is what I have seen: Taxes not paid for 5 years and owner applies to buy them. When he gets his quote he applies again. There is always someone in the que, so the state will not entertain a best price offer. This guy will never have to pay property tax.
@Gregory Stanley Ahhhhh ok! So that's what happening? The state told me that I'm number 49 in line on this particular property. Go figure.
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