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Can I rent a property with a tax certificate in hand (Alabama)
I can't seem to get clarification on this. If you purchase a tax lien certificate and the property is vacant, do you have any right to rent it or only to physically secure it?
yes sir buddy. In fact the city of mobile has argued in court that you have an obligation to secure and maintain. I would get possession as quick as possible.
Hi Brooks, it's Denise. We know each other. You came to one of my tax sale investing classes several years ago. Yes, you are entitled to possession and can rent the property out. If the owner redeems, you can keep all the rents up until redemption. If the property contains a residential structure, you can do any necessary repairs to make the property habitable (but not upgrades) and the VALUE (not the cost) of those repairs is an additional charge if there is a redemption. If the property is located in an official urban redevelopment or urban renewal district, you can recover the value of ALL improvements, not just repairs. If in one of those districts, the property does not have to contain a residential structure. I think Mobile has several districts. I have an 18 minute video about tax sales and possession on my website. Send me an email, and I'll send you a coupon code so you can watch it without charge, since you've already been to one of my classes.
Beware of a void tax sale, though. In that case, you are not entitled to possession, or rents, or value of your repairs or improvements. The most common reason for a void tax sale is the name called off at the auction was not the current owner of the property. Usually that is because the assessed owner died, or sold the property, or it was foreclosed on.
@Jared Irby - the first answer coming from my own backyard! Thanks man.
And @Denise Evans - the most educated person I've run across regarding tax deeds hands down! Yes, I attended your class (highly recommended for anyone listening) but apparently failed to take perfect notes (although I still refer to my google doc of notes). I'll take you up on your offer, thanks!
And for sure be careful of those where the wrong name is called off. Just had notice of one that was invalidated because the tax records were never updated when transfer deeds were filed.
ADOR notified us our sale was invalid. Is this usual? No chance to appeal?
@Roy Oliphant, was it property you already purchased at auction, or one you wanted to buy from state? If already purchased, you are entitled to your money back plus interest, but there is a 5 year deadline for that, and a 2-year deadline for getting the overbid back.
ADOR just reporting what the county told them. I've run into some mistakes in this regard. Ask for details. Press the issue. I was told one of my properties had been redeemed, when I knew good and well it had not. I asked questions, asked for particulars, and then ADOR said, "Jefferson County said they made a mistake, the property has not been redeemed, so you can buy it after all."
We purchased it from the state and received our deed. Then got a letter to return the deed and they would refund since the original sale was invalid. Happened right after we sent out letters in prep of filing Ejectment. Found out there is probably an unrecorded mortgage that would redeem anyway. Might even be the same that challenged the sale at the county. I was just surprised the county overturned it without any notification of proceedings.
I'm new to BP and came across this forum. I've read a tax certificate book for montana. I have never bought a tax lien before but wondering when and if you do how do aquire the keys to be able to rent it.
I am new to BP as well, just to make sure I understand what was said.. You can take possession of let's say vacant land with a tax lien certificate? I Thought you had to have the tax deed before you could access the property?
This is from the revenue.alabama.gov site where the state laws and listings are located. I thought it was also informative as to how the tax lien certificates can turn into tax deeds and besides it's a good read too.
If the state has held a Certificate of Sale less than three years from the date of sale by the county tax collection official, the Certificate will be assigned to the purchaser. If the property is not redeemed by the three year anniversary of the sale to the State, the Certificate holder can surrender the original assigned Certificate the county redemption official and receive a tax deed upon payment of a nominal issuance fee. If the State has held a Certificate of Sale more than three years from the date of sale by the county tax collections official, a tax deed will be issued to the purchaser by the State.
Tax deeds are given without warranty or covenant of any type; it is the purchaser’s responsibility to determine what, if any, interest in the property is actually being purchased. No refunds are made unless the State had no
interest to sell, and then only within two years from the purchase date.
It would be advisable for the potential purchaser to thoroughly investigate every aspect of the property prior to purchase, including, but not limited to, the location of the property, type of buildings, if any, on the property, determining what, if any, liens or encumbrances exist on the property, and any other facts which may be pertinent to the contemplated purchase. The perfection of tax title into indefeasible ownership (“good” or “merchantable” title) is a very complex process requiring meticulous compliance with the law. It is recommended that a competent attorney be consulted in any case where legal questions or concerns arise.
MUST I PAY DELINQUENT TAXES IF I DID NOT OWN THE PROPERTY IN DELINQUENT YEARS?Yes. The taxes follow the property. The tax liability must be satisfied by the property owner whether the taxes were incurred prior to current ownership. Never purchase property before having a title opinion from a reputable source. It is advisable to consult a competent attorney regarding your contemplated purchase of tax delinquent property.
Denise
I just purchased a duplex off tax deed in Arkansas. It has four units that are all rented. The owner had an additional 10 days to redeem and did not. Can I write a letter explaining to the renters I bought this property and put a copy of the title with the letter and ask them to start sending me rent?
Hello, what i'm wondering is, if you buy a tax certificate and the original owner is still occupying the property can you legally make them leave or pay rent?
Quote from @Denise Evans:
Hi Brooks, it's Denise. We know each other. You came to one of my tax sale investing classes several years ago. Yes, you are entitled to possession and can rent the property out. If the owner redeems, you can keep all the rents up until redemption. If the property contains a residential structure, you can do any necessary repairs to make the property habitable (but not upgrades) and the VALUE (not the cost) of those repairs is an additional charge if there is a redemption. If the property is located in an official urban redevelopment or urban renewal district, you can recover the value of ALL improvements, not just repairs. If in one of those districts, the property does not have to contain a residential structure. I think Mobile has several districts. I have an 18 minute video about tax sales and possession on my website. Send me an email, and I'll send you a coupon code so you can watch it without charge, since you've already been to one of my classes.
Beware of a void tax sale, though. In that case, you are not entitled to possession, or rents, or value of your repairs or improvements. The most common reason for a void tax sale is the name called off at the auction was not the current owner of the property. Usually that is because the assessed owner died, or sold the property, or it was foreclosed on.
I went to the courthouse in Birmingham Alabama to leave it legal documents so as I was there the lady had let me know that as of 2021 they passed a new law that when you buy a tax lien a house you are not allowed to rent it out renovate it or even step foot on the land or in the house
@Julie Dawn tapia. Jefferson County switched types of tax sales. There are two different sets of laws, what we call the old system and the new system. Most counties now use the new system. A few still use the old system. Jefferson County changed to the new system for auctions starting in 2021 and afterwards. Under the new system, you have only a lien on the property. You are not entitled to possession. You cannot rent it out. You cannot make improvements. All you can do is wait the required number of years and then file a lawsuit to foreclose your lien.