Removing a property from Tax Deed Auction to give time to close?

13 Replies

I have an executed agreement to purchase a property which the property is also up for tax deed auction in a few days. Within the purchase agreement the seller has agreed to pay the taxes to remove the property from sale. They've failed to do so. Now I know I can pay the taxes to remove it from auction, and I'm aware of the position that places me in. What I'm trying to learn is if there's another legal leg I can use to remove it from sale without advancing and funds to pay someone else's taxes. Will I pay the taxes if it comes down to it, yes I will. Do I want to, not really. I would rather the seller follow the agreement or have their attorney address it in some manner, but not sure what can be done other than paying it. Any suggestions? 

No, there is no way to stop the sale without paying the amount required to redeem, except....if the owner or other lien holder were never served (due to a non current address) And you notify yhe clerk of a valid address, they usually delay the sale in order to serve notice.

Barring that, and I understand your risk and would consider it myself, if you pay the taxes, make the seller sign a promissory note/mtg.

Hello, Mike, and thank you for your response. I have an appointment Tuesday ( tomorrow) am to learn what, if any, alternatives may exist for the situation. Prior to, I have a super early morning call with my attorney to also gain knowledge on any legal ammo there may be as well. It's looking like (from what I can ascertain) that I'll be the one paying the debt to give the 13-14 days time needed to get to closing. 

Thank you, Wayne. Going down that path I certainly will force the signature on a promissory note. I had to put the question out there as I wasn't sure if something existed that I haven't uncovered yet which would be the solution I needed. I only need enough time to have a traditional, cash close on the property. We're talking 13-14 days.

Well, a title search/commitment, excluding unrecorded city/code violation type liens, only takes 24-48 hours.  If your funds are readily available, no reason you can't close in 48-72 hours.

I'm already on that one lol. Title is feverishly doing their part to be a remedy. The cash is already in their hands and all the title work is done. Just need the seller to cooperate and move out in 3-days. I cannot and will not let them occupy post close. A whole other set of issues would come if I open that can of worms. 

To me this isn't about the taxes at all ... it's about possession.

A note would be worthless.

Settle at the property.

Get the keys and obtain possession; change the locks; pay the taxes. In that order. 

Personally if I was confident about the title search, which I know how to do, and the cash price was under 100k. I generally type up my own deed get the seller to sign it and have it notarized at same time and file the deed. I deduct the taxes from what I give them so that I make sure the taxes are paid. I would just make sure to have the person move out prior to and change the locks right after. I can buy a house in a hour. I am an engineer and have learned I don't need an attorney to buy a house. It is illegal to do this for other people but you can do it for yourself. If I have any doubt about a clean title then I have a title search done by a pro.

I'd call the tax assessor and see if the seller can set up payments.  Make one, and then pay the rest off at closing.   You might also talk to the law firm handling the sale.  Not sure about FL, but in TX it is pretty common properties get pulled from sale and put on payment plans or if it is under contract and about to be sold.

Once a FL property gets scheduled for a tax deed auction, a payment plan is no longer an option. No law firm is involved in the sale.

@Shellie Johnson - I wouldn't worry too much about the tax sale going forward or not, but I would plan for it. If you can get it pulled from the tax sale, super; if not, hold back the tax payments (plus more) at the settlement table and let the settlement company figure it out.  So long as sufficient funds have been held back to cover the due bills, you should be fine. So the cert buyer gets a day or two of interest, it's part of the held-back funds and no additional skin off your nose.

@Mike Hartzog suggest talking with the county - I agree, but wouldn't put too much effort into it - see above.  as @Wayne Brooks says, removal is predicated upon paying the taxes in full and he's right about checking for municipal liens (code violations etc.). But the closing company should be fully informed on that prior to closing.  In the states I do tax liens, the properties can be removed from the sale up until the day before the sale, though water, sewer and code violation fees/fines may not have been included in the tax sale balance. Again, I wouldn't fret over meeting that mark or not; it's a goal, not a necessity, the downside is minimal as far as Tax Liens go (in my experience) and can be covered with hold-back.

Great Question and Responses!

UPDATES:  Tax fiasco remedied! Took some research but I found some "state" vulnerabilities (not title related) that put everything solidly in my court. Taxes were paid (by the occupant), I contracted to purchase... and I assigned it to another investor. Closed it in 9 days and everyone's goals were achieved. Thank you, all, for your suggestions, input, and advice. It's much appreciated!

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