Rental Property Investor · San Francisco Bay Area, CA · Member since 2009 · 48 posts · 21 votes
I've recently been researching tax lien certificates in Florida and have a few questions regarding the post-purchase timeframe. What happens with the future taxes owed on the parcel for which I own a TLC? Do I need to pay those taxes in order to maintain the first position in a tax deed sale? or do I wait for future TLCs to be issued on the parcel and buy those?
Rephrased as an example: Suppose I own a TLC for the 2008 tax year. Florida requires 2 years before redemption. What happens if someone buys the TLC for 2009 on the parcel that I own the 2008 TLCs? Could I still initiate a foreclosure on the property after the 2 year waiting period?
Rental Property Investor · San Francisco Bay Area, CA · Member since 2009 · 48 posts · 21 votes
17y
Brevard County in FL has a good overview of the process of tax lien certificates. http://www.brevardtaxcollector.com/taxcol2.htm According to the information on their website, if you apply for a tax deed to bring the property to sale at auction, you are required to "redeem" all other tax certificates and fees.
So, I think this means two things:
1. If I own a TLC for 2008 and apply for a tax deed sale (this would occur in 2011 - according to the required waiting period), then I would have to "redeem" (e.g. pay off) the TLC for 2009 and 2010 before doing so.
2. If I own a TLC for 2008, but another investor owns a TLC on the same parcel for 2007 and that investor applies for a tax deed sale, then my TLC would be redeemed and I would get my money back, plus interest.
This makes sense to me, but am I missing anything?
Real Estate Investor · Chicago, IL · Member since 2008 · 31 posts · 2 votes
17y
You are correct. The process is called a TDA (Tax Deed Aplication). When filing for a TDA you will need to pay any years of delinquent taxes plus County fees. Ususally just a couple hundred dollars. TDA's can be very expensive if the property has many years of TLC's outstanding. Also the rules are different when you TDA a property with a Homestead Exemption.
One can profit from tax lien investment without foreclosing or redemption, and that is assignment of your lien to another investor. Some states allow for the assignment or sale of a tax lien certificate from one investor to another. This is a way that you can undestand profit on your lien without waiting to go through the foreclosure process.