New to Tax Liens and Deeds

[Corwyn Patterson]

Hello

     I've been following this thread and have been gaining some much needed information. So if I am correct once I receive my tax certificate I can begin the possession process and current owner has 3 year redemption period? Sorry this was to be posted to a thread for Birmingham AL but its not posting in the correct thread. 

[Denise Evans]

Hi @Corwyn Patterson. If you have a tax certificate (whether obtained at auction or from state) you are entitled to immediate possession. If the property is vacant, you can take possession, change locks, make repairs, and rent the property out.  If the property is occupied (even if the people are just temporarily gone on vacation or something) then you must give them written notice to vacate. You must then wait 6 months, and at that time you can sue them for ejectment (not eviction) to gain possession. 

Often, people will then offer to redeem, and the court will let them do that. But, if they wait until after you file your ejectment lawsuit to redeem, they will also have to pay your legal fees as part of the redemption costs. 

The one major thing in all of this that you need to be careful about is if the tax sale was void. The most common reason is because the owner died before the tax sale, but the auction called off the dead person's name. If the tax sale is void, you are NOT entitled to possession, even if you take it in good faith. If you are not legally entitled to possession, then you are not entitled to keep any rents you collect if you do happen to physically take possession. As a result, if the owner contests the tax sale as void then (1) they will still have to pay you for the taxes plus interest in order to "redeem," (2) you will  have to give them all the money you collected in rent, because you are not entitled to keep it; (3) they will not have to pay you for any of your repairs; and (4) you will not be entitled to legal fees if you file an ejectment lawsuit and THEN find out the tax sale was void.  

This is not intended to discourage  you from tax sale investing. It is a very lucrative field. If a 5 acre field had a pot of gold in the middle, and the field was covered in land mines, but you had a map that FOR SURE showed the location of every single mine, you'd go after that gold, wouldn't you?  Of course, nothing in investing is FOR SURE, I'm not saying that.  Just, don't be afraid. You can learn about most of the problems and easily avoid them.