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Tyson Begly
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Chambers Alabama tax sale be void if assessed person was deceased before auction?

Tyson Begly
  • Investor
  • Alabama
Posted Jul 4 2023, 10:03

I have a tax certificate for Chambers County from the 2023 auction.  The house is clearly abandoned, as the power box is disconnected, AC is removed and someone clearly packed up the stuff.  It has been sitting abandoned, and no one has responded to our signs on the doors for 2 weeks.

According to Alabama GIS, the 2021 taxes were paid in March 2022. We paid the 2022 taxes at the 2023 auction.

I found an obituary where it looks like the previous owner passed away in October 2021.

I've never had a tax sale turn out to be void, but it is my biggest fear with Alabama tax sale investing. I sent a letter to the owner address listed in Alabama GIS, but they never responded.  I don't know who I would file an ejectment against.

The house needs repairs, so I'm scared to see what it would look like in over 3 years after I get the tax deed and file a quiet title.  I also don't want to invest $20k+ in repairs if there is potential they wouldn't get reimbursed.

Thoughts on whether it's valid, or how to protect myself?

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Denise Evans
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Denise Evans
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Replied Jul 4 2023, 11:01

In every county except Jefferson County, if the assessed owner's name was in the pre-auction advertising, and that was the name called off at auction, but that person died before the auction, then the tax sale is void. Any heirs can void out the the tax sale but must pay the investor for taxes and interest. They do not have to pay for improvements, and the investor is not entitled to possession. Jefferson County has a special statute passed in the late 1930's that protects it, and any other county with a population over 500,000. Originally it was 100,000, but amended in the 1980s. Today, that is still only Jefferson County, although Madison County is gaining on them.

If you take the risk and take possession of the property, and hold possession for 3 years after the tax deed date (6 years after the auction in your case) then your "short statute" adverse possession of 3 years will defeat any heir's claims the tax sale was void. The statute of limitations will have expired on their rights to get the property back.

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Tyson Begly
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Tyson Begly
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Replied Jul 4 2023, 11:06

@Denise Evans

I was afraid this would be the answer. Is it 6 years even if we get a quiet title after we get the deed?

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Denise Evans
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Denise Evans
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Replied Jul 4 2023, 11:47

@Tyson Begly  Tricky question. If you have a quiet title order AND properly served everybody you could find AND the guardian ad litem did their job properly, then you are probably safe. On the other hand, a "served by publication" heir could argue the guardian ad litem did not do their job well, the heir should not be foreclosed from claiming the tax sale was void, and they ALWAYS have 3 years after the tax deed date to assert their rights and cannot lose them simply because of a GAL who did not assert the correct defenses on behalf of the unknown or unfound heirs.

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Tyson Begly
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Tyson Begly
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Replied Jul 5 2023, 05:53

@Denise Evans If the heirs have not taken action to move the title into an estate, or to transfer to an heir, how is the state supposed to know the person is deceased?  I completely understand if there was action taken to handle the estate and the state wasn't paying attention, but if no action has been taken, I don't see why it would be void if the state was sending to the right person per the latest records they have.

I have a few properties were the name listed in the title auction was already deceased, and held them for several years.  Presumably, there wasn't a will or any heir actively pushing for ownership, so the taxes weren't paid and it eventually ended up with me.  Have I just been lucky i these instances?

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Denise Evans
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Denise Evans
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Replied Jul 5 2023, 06:16

Nobody has to take any action. Under the law, title to real estate MUST be in someone at all times. We might not know what that someone is, but title rests there. It does not matter if probate was opened or any notices sent out or anything similar.

I understand your reasoning, but it is a constitutional due process issue that you cannot take someone's property away from them without due process of law, which includes notice. Also, the person must have an opportunity to appear in court and dispute the taking. While we basically think of those certified mail notices as just something to prove the taxpayer got the delinquent notice, it is more than that. It is a notice to appear in court and show cause why the property should not be auctioned. It is probate court, but it's still a court.  The certified letter is a summons, just like in a regular lawsuit. If it was sent to the wrong person, then that person lost their rights without the opportunity to argue.

Yes, you would think it is the county's responsibility to keep up with stuff, but it is not practical. So, it rests on the investors. Sorry.

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Tyson Begly
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Tyson Begly
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Replied Jul 5 2023, 09:37

Thank you, @Denise Evans.  It's the answer I wanted to hear, but it makes sense. 

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Replied Apr 11 2024, 12:57
Quote from @Denise Evans:

In every county except Jefferson County, if the assessed owner's name was in the pre-auction advertising, and that was the name called off at auction, but that person died before the auction, then the tax sale is void. Any heirs can void out the the tax sale but must pay the investor for taxes and interest. They do not have to pay for improvements, and the investor is not entitled to possession. Jefferson County has a special statute passed in the late 1930's that protects it, and any other county with a population over 500,000. Originally it was 100,000, but amended in the 1980s. Today, that is still only Jefferson County, although Madison County is gaining on them.

If you take the risk and take possession of the property, and hold possession for 3 years after the tax deed date (6 years after the auction in your case) then your "short statute" adverse possession of 3 years will defeat any heir's claims the tax sale was void. The statute of limitations will have expired on their rights to get the property back.

 @Denise Evans I've been sweating all day concerning this very issue. A property went up for tax sale in 2004. A guy bought the taxes, passed away, then it went to tax sale. I bought the Tax Deed in 2017, took possession in 2018, and have been holding it every since. Currently trying to clear the title and sale the property. Previous owner before the tax sale was not even aware the property was up for tax sale(long story). Bottom line, I got that owner to quitclaim his interest in the property. If the tax certificate holder's heirs are outside of the statue of limitations, which I'm assuming they are because they never took possession of the property, that's a big load off of me.

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Denise Evans
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Denise Evans
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Replied Apr 12 2024, 14:34

Three years of post-deed adverse possession results in the statute of limitations running against the original owner or heirs. They are no longer able to claim the tax sale was void.  They can certainly file a lawsuit and claim it was void, but you would answer that lawsuit with an affirmative defense of the short statute of limitations.

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Replied May 8 2024, 21:11
Quote from @Denise Evans :

Three years of post-deed adverse possession results in the statute of limitations running against the original owner or heirs. They are no longer able to claim the tax sale was void.  They can certainly file a lawsuit and claim it was void, but you would answer that lawsuit with an affirmative defense of the short statute of 

 So if I keep my tax deed for 3 years without any Interference from previous hiers or owners, what should I tell the lawyer to quite the deed. What steps can I take now with only the tax deed and 3 months of ownership to quite title. I plan to live on the property and eventually sell (it's vacant with no squatters).