Tax deed in Florida

62 Replies

I was the high bid on a tax deed in a condo-hotel in Florida. I'm not really sure how that happened since there is a significant lien both from the condo association and the mortgage company. Both liens disappear since I acquired the property via tax deed auction.

I know I must perform a quiet action to get clear title so here's where I need some clarificatification:

1. Why the other lien holders didn't buy the tax lien is are real puzzler to me.

2. I want to move forward with a good relationship with the owner's association, but I will not pay the back association fees.

3. There's got to be some surprise waiting for me that I just haven't thought of yet.

Can anyone with experience in purchasing condo tax deeds in Florida shed a light on what I am to expect?

Jean Norton

Just an update, sure enough the homeowners association is threatening to foreclose on the property if the previous owners arrears aren't paid. My attorney is hot on the case.

Check into the state laws regulating HOA and condo associations. In some states, the HOA liens aren't completely wiped out. If that's the case where you are, there may be some payment due to the HOA to get clear title.

May I just state once again emphaticcally-----

I HATE CONDOS.

HOA's and special assessments. You should really do your homework before you buy at foreclosure/tax sales in Tx and elsewhere, imo. Rich

Actually this was in FL. There's a precedant case, "Sugarmill Woods Oaks Village Association, Inc. v. Andrew M. Wires" where the trial court and the appellant court agreed that the liens from an HOA do not convey to a new owner via tax deed sales. I think the law is on my side. I'll keep this thread updated with my progress.

Originally posted by Jean Norton:

I know I must perform a quiet action to get clear title so here's where I need some clarificatification:

I am not familiar with Florida law but I never do a quiet title action.


1. Why the other lien holders didn't buy the tax lien is are real puzzler to me.

It is not very common in tax sales for lien holders to bid. With all the thousands of tax sales across the country it just isn't practical for lien holders to go to every one. Often they aren't even notified. In a tax lien foreclosure they are notified and have the right to redeem.They rely on the right of redemption after the sale. (This applies more to tax liens, I am not as familiar with tax deeds.)

Can anyone with experience . . . in Florida

. . . There's a precedant case, "Sugarmill Woods Oaks Village Association, Inc. v. Andrew M. Wires" where the trial court and the appellant court agreed that the liens from an HOA do not convey to a new owner via tax deed sales. I think the law is on my side.


I have no experience in Florida but I suspect you are right the law is on your side. I am surprised there is a precedent case because I suspect the law is very clear that all liens are wiped out.

Good luck and I am interested in how this turns out.

The attorneys involved agree there is some confusion in the law. Someone will have to face a judge to set a precedence. Luckily another bought a similar condo in the same complex via tax deed and the attorneys after him for a lot more money - he's commited to litigate. I'll watch what happens and report back.

I have been dealing with this issue as well. Please note that the Sugarmill case does state that the lien is extinguished, which would be correct, however it does not address the extinguishment of back assessments owed. Take a look at Statute 718.120(2) and the Docs of the Association. My guess is that your Docs state that a Unit owner is jointly and severally liable with the previous one for all of the balance of the account, including court costs and attorney fees. So my understanding is that while the Association's lien is indeed wiped out, they should be able to start the collection process again, and look to lien the property for the total amount due on the account, and then foreclose on it if it is not paid in full.

I am interested to hear what your outcome is, but if I had to pick a side, assuming the Docs have proper language, I would probably take the Association side.

I am interested to hear what your outcome is, but if I had to pick a side, assuming the Docs have proper language, I would probably take the Association side.

Originally posted by Damien Richards:
My guess is that your Docs state that a Unit owner is jointly and severally liable with the previous one for all of the balance of the account,


Damien brings up a good point. A foreclosure or tax sale wipes out the lien but not necessarily the debt. For example; The previous owner in theory is still liable for the mortgage amount personally. The bank simply no longer has collateral on the loan.

I don't know the mechanism which makes you responsible for abiding by the condo docs. Is it as simple as you must agree to them in order to purchase there? If that is the case a tax deed holder hasn't agreed to anything and thereby not responsible to abide by them.

Is it a deed restriction? If so does the new tax sale deed contain that restriction, or has that restriction been wiped out via the tax deed.

I'd like to know exactly what is owed as well. My understanding is the HOA/COA will be able to collect for either 12 months/6 months of back dues, any special assessments in that time frame, and all late, and attorney's fee's along with interest up to the date of transfer of title or sale.

The ability for the association to levy a special assessment on the new property owner for the remaining amount previously owed is not allowed after foreclosure. That being said Damien sounds logical in the HOA/COA's ability to review the finances and issue another special assessment to cover current expenses.

This thread is a perfect example of why you must be prepared to deal with many unknowns when bidding on tax sale auctions.

Many gurus and books make it sound like buying at tax sale is easy. It is one of the most complicated and legally convoluted businesses in the real estate industry.

However, it can be tremendously profitable!

Just a quick update - scheduled for a hearing in Feb 2011 - I can't believe I'm the first one to appear before a judge on the conflicting statutes in the Florida state law.

I've had some reach out to me privately as they are in this same situation. If anyone has solid and recent information on this topic (please no more "due diligence" remarks) of conflict in the state laws regarding tax deeds and COA's, please let me know.

Thanks!

Interesting topic, Jean. Sorry to hear about this issue you have. I heard a similar story from an investor here in California. He bought a condo at a Trustee Sale, then the HOA went to him for back-owed fees. Apparently, his lawyer ended up recommending that he pay the money. I was wondering how this was possible, but after seeing some of the other posts, it's starting to make some sense. Hopefully your case turns out differently. Good luck, and please keep us informed.

We have made significant progress to a positive resolution. I've started receiving checks from the income earned on the unit and the attorneys are negotiating what I am owed and what my attorney is owed.

This will be settled soon!

Originally posted by Jean Norton:
We have made significant progress to a positive resolution. I've started receiving checks from the income earned on the unit and the attorneys are negotiating what I am owed and what my attorney is owed.

This will be settled soon!

I realize this is an old thread, but any chance to recommend the lawyer you used for this process?

I will be happy to share my lawyer. His name is Henry Hicks and I believe he was from the Tampa area. BTW, everything is settled and solved. You are welcome to tell him I referred you.

Originally posted by Jean Norton:
I will be happy to share my lawyer. His name is Henry Hicks and I believe he was from the Tampa area. BTW, everything is settled and solved. You are welcome to tell him I referred you.

Hi Jean. So was a new precedent (and accompanying clarity) established in your case? What was the outcome?

Since this was kicked back to the front, in Florida Liens and mortgages Do get extinguished, assuming proper procedures were followed and is verified through the required Quiet Title action. But, the Debt to a HOA/COA is not extinguished. By separate statute, the new owner IS responsible for the pre existing debt for that unit in a HOA/COA. They can file a new lien against the new owner.
As far as the 1%/1 year of dues (which ever is Less) cap mentioned, that is only in a mortgage foreclosure, and only applies if the foreclosing lender takes it back at auction, not a third party.

Originally posted by Jean Norton:
I will be happy to share my lawyer. His name is Henry Hicks and I believe he was from the Tampa area. BTW, everything is settled and solved. You are welcome to tell him I referred you.

Thanks, Jean! I had actually had him on my list to call from some basic internet searching I had done before seeing your response. I spoke with one of his paralegals, Wendy, and she was very helpful and we've decided to go ahead with them. Thanks again for the recommendation.

I have also used Mr. Hicks for a tax deed case. Very efficient and affordable. Wendy is a sweetheart. Very thorough in every aspect of the case. I believe they work in all of Florida so you get one stop shopping convenience.

Originally posted by Jean Norton:
I will be happy to share my lawyer. His name is Henry Hicks and I believe he was from the Tampa area. BTW, everything is settled and solved. You are welcome to tell him I referred you.

Is it safe to assume that if I buy a tax deed in FL, I will not have to pay back condo association fees?

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here