Tax Deeds, Death, and Tenants

4 Replies

So, I've narrowed down buying a tax deed to three properties. One is at the top of the list because it's right by a nice college in town (Birmingham, AL). However, when I drove by it tonight I saw that it wasn't vacant and, looking at tax records, the person whose name is on it is either dead or is the son of the guy and holds the same name. 

This is my first go at purchasing a tax deed and some advice would be much appreciated. A couple question come immediately to mind. A) What if the owner lives in the house? B) If its a tenant, how do I go about having them pay me rent (do I assume their existing rental contract until it expires?). C) somewhat related, If I buy a tax deed property and put tenants in them, what happens to the tenants if the previous owner exercises their rights to redeem the property? 

Reading a response @Denise Evans recently gave to a tax deed question concerning redemption rights and the 3yr period that may not be as set in stone as I thought, some info on all this sure would be helpful!

@Hunter Sandlin

A. If the owner lives in the house, you can give written notice to vacate, but then you have to wait 6 months before filing an ejectment lawsuit if you have a tax certificate. If you have a tax deed, you can file the ejectment lawsuit immediately.

B. If the owner's tenant lives there, it is very inadvisable to approach the tenant and ask him to pay rent to you. Tenants are not allowed to "attack" their landlord's title.  Landlords will sue you for intentional interference with a contractual relationship. I'm not completely sure the owner would win, but it would cost you a lot of legal fees to find out.

C. If you put a tenant in possession and the owner redeems, your tenant will have to vacate. I suggest putting a 30-day cancellation clause in all leases in case there is a redemption.

To clarify, I do not doubt the 3-year redemption period. I have some concerns on a more subtle level that I'm working through.

@Denise Evans ,

What would you suggest for your plan of action for a property occupied by the taxpayer's tenant?

Is a notice to vacate (I assume sent both the Landlord and the occupant) than prepare for the ejectment Lawsuit the best way to go about this? (I'm really asking what would you do.)

What is the best way to send a notice to vacate? Cash for Keys?

Can a tenant vacate (on some magical request); and then grab possession or is the taxpayer still in possession? 

Denise Evans, I also wanted to Thank You for all your post here, and your book. I have spent so much time just reading and re-reading what you write.

I highly recommend that anyone maybe take a peak at that link in your signature. Its amazing.

 As an out of state investor, when I make a trip down to Alabama I'll be making a point to look at your class schedule!

For property occupied by a taxpayer's tenant, send the notice to vacate to the taxpayer only. In the notice, tell him he can either assign the lease to you and allow the tenant to stay and pay rent to you until the taxpayer redeems, or the taxpayer can sign a master lease and then sublease to the current tenant, or you can file an ejectment lawsuit against him and his tenant, and also ask for reimbursement for your legal fees.  That will make SOMETHING happen, most likely.

Best way to send notice is by regular and certified mail.

Do not offer cash for keys unless you can get a release of redemption rights.

No, you cannot enter and take possession of property while it is temporarily vacant. It must be abandoned.

Thank you for kind words.  Looking forward to meeting you.

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