Tax Sale property in TN using a quit claim deed

6 Replies

Hello everyone, this is my first post on the site here.  I have been investing in RE for about 10 years and have just gotten started with Tax deeds.  My question is this:

A property was sold for taxes just under a year ago and there is a 1 year right of redemption here.  This property was an estate and there are 15 heirs.  Just prior to the redemption period ending (2 days) I bought 2 of the heirs out with a quit claim deed and recorded it at the register of deeds.  I was going to pay the back taxes and one of the other family members paid it before I did.

With that said, I am concerned that my quit claim deeds may be worthless because I filed them prior to the property being redeemed.  Is this the case?  It was my belief that I would own 2/15 of the property at this time.  I have seen where some people think that purchasing quit claims and recording prior to the redemption means the quit claims actually convey no interest as the interest in the property was all conveyed to the original buyer at the time of sale a year prior, except for the right of redemption.

But if the property has since been redeemed, would I now have an interest?  i know it is a pretty technical question and I have asked my attorney about it, I wanted to see what the BP community had to say.  Thanks for your input!

This topic interests me so I will answer on the hopes of getting an update from the original poster as to what happened. 

If those 2 individuals from who you obtained quit claim deeds are in fact heirs, then you own an interest on the property regardless of who paid the taxes.   

would you let us know what happened?

@Darryl Harvey @Ed Mayo We have no redemption here, but yes I'd agree.  If the property were "redeemed", that generally means it went back to the original owners at the time of the tax sale.  You now have 2/15th's of it, whatever that may be worth.

@Darryl Harvey This is a pretty technical issue. It may depend on court case precedents in your state. 

I would think that a quit claim deed recorded before (or after) the redemption would be valid. A quit claim deed basically says if I have any rights in the property, any rights i am or may not have are  now yours. I would interpret that to mean you had both the right of redemption and ownership once someone else redeemed.

So as Wayne said you probably have 2/15ths worth of the property. However another factor may be probate/estate laws in you state. Did the heir have ownership rights in the property or does the estate own the property and not yet given any rights to the heirs. this is another technical issue that a good local attorney will have to advise you on.

Darrly.. sounds like you may has wasted your money..  I concur with Ned and Wayne you now have 2/15ths of interest.. and if this is Memphis .. and I have bought many tax sale properties in this city.. its probably not worth a whole hell of a lot.. and if there are 15 heirs its was a classic case of no one doing proper probate which runs in the demographics of the area.. .. I would say your money is probably lost .. and just move on.. unless this is a high dollar value deal and worth skip tracing and tyring to chase down the rest of the folks..  

I concur with @jayhinrichs as well but there is one caveat that may be worth pursuing. Find the heir that paid the taxes and agree to sell him your interest for what was paid. If they paid redeemed it then it may mean more to them than money and they would now have 3/15ths instead of 1/15ths. This may give them leverage with the other heirs or just bragging rights. Other than that it's a lost cause. If any of the heirs have judgments they will attach as well.

Darryl - In my opinion you have unwittingly put yourself into a potentially serious and costly can or worms. Why would anybody purchase a small fractional interest in a property as tenants in common with 13 other unknown owners? I fully agree with Michael McGee: Sell your interest in the property as fast as possible to your new partner who paid the back taxes and redeemed the property - unless so much lot of value in the property and profit to be made by staying in the deal and putting up with the many problems of finding and negotiating with all of the other 13 heirs to buy their interests out at bargain prices that is a really smoking hot deal!  All it takes is one of your owner - partners to refuse to sell his share to you (or to anyone else) and you are stuck with an unwanted partner and a property that is unsellable on the open market. In that case you would have to go to court and force the sale of the property at auction in order to cash out of the investment. This is just one of many potential problems you now have as a tenant in common owner of this property. Please read the following discussion of many legal issues and problems associated with tenants in common ownership:

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