Multiple Tax Certificates issued by Alabama

3 Replies

Person "A" purchases a Alabama tax certificate in 2008 and fails to pay any further taxes. The state admits to some errors and offered person "A" a parachute and a chance to become current, the does not.  The same property is again sold as a tax certificate to person "B" in 2017.

1) Does person "A" have the right to force person "B" into redemption.

@William Watt , I know you've already sent me an email directly on this issue, which I answered. But now I'm wondering, what are the details of this "messed up" and "parachute?"  Please let me know details. If you don't want the whole world to know, send them in an email.

No I don't mind this forum, so we will all know, as I also read many of your responses to other inquiries. 

When I looked at purchasing this tax property it looked as if the taxes had not been paid for 5 years and thus I would get a deed.  Also in this process I found out the owner is deceased and did not have any children.  Upon receiving the certificate I went to the county revenue dept in Mobile asked why a tax deed was not issued.  I was told that the State made a "mistake" in notification to the older tax certificate holder and offered him a "parachute" offering to pay all the taxes that he missed due to this error.  The older tax certificate declined and thus was offered.   DOR refused to let my time of purchase go back to 2012 and thus a certificate was issued to me.  

I see this some time when looking at the state inventory and if the older certificate can redeem after they quit paying then this is a big, big negative. This seems to give a lot of leverage to older certificate holders.

This is not a very expensive property, but there are some advantages, so I am not out any thing and maybe be a blessing any way.

Question;  

1) Just for every ones benefit, could the older tax certificate holder still have redemption right if a tax deed was issued in the scenario above????

2) How can an investor be protected from the above?

@William Watt

  • Having a tax deed does not make you immune from redemption rights.  Please read my forum posts and blog articles on the subject of judicial redemption rights in Alabama.
  • Anyone with an interest in the real estate can redeem. That means former owner, former certificate owners, lienholders, etc.  That is the only fair thing, to let them protect their initial investment by paying extra money to redeem from the tax sale, even if it is an earlier investor redeeming from a later auction when they failed to pay the taxes.
  • You protect yourself the same way you protect yourself from former owners or their heirs redeeming--you establish exclusive possession, you burn off redemption rights, you buy out people's rights, you engage in strategic litigation to eliminate rights, etc.