Florida Tax Deed Investing

4 Replies

Hi everyone!

I'm located in lee county Fl, and have some questions about tax deed sales in this area. I saw some other posts about tax deed investing here (very helpful!) so I hope to find some answers to my questions. Here it goes:

If I buy tax deed property in Florida and public records show that the previous owner has a judgment recorded but not a lien against the property yet, can this judgement later on still get converted to a judgment lien against the property although it changed possession? Or would the creditor have to file for a lien attachment prior to the sale to be valid? In my understanding this can happen with municipal debts only, but not credit cards for example. Am I correct?

I also heard something about cross collateralization, so I wonder if it's true that if a person has liens recorded and owns several properties, those liens attach to all of the properties automatically, even the ones that directly effect only one specific property - for example a code violation. Anyone knows if that's the case? And if it's true, does this pertain only to liens recorded after the purchase of a property or can even older liens that were recorded prior to the purchase of a property affect it?

I see the city listed as an interested party in tax deed sale documents, but when I search public records I don't find any liens or judgments recorded. Is this an indication of encumbrances too, or is the city always listed even if there are no code violations or any other outstanding issues? I'm wondering, because the city is listed in every single tax deed document I have seen.

Is it true that in the state of Florida the clerk of court is not obligated to locate the owners new address even in the event of returned mail? Let's say the owner lives abroad. 

What in your experience is the easiest, fastest, and most affordable way to clear title? Someone told me you can get title insurance if you get a quit claim deed from all interested parties without having to file for quiet title action. Has anyone of you done this before?

And finally, can anyone recommend a Florida title company who insures tax deeds for a higher premium?

Sorry this post got so long. Hopefully others are looking for the same answers and it will help them too. Thank you!

Any recorded judgment automatically attaches to any property that person owns in that county.
A QT action is generally easier than trying to get QCD’s, and likely more effective. I don’t think code violations on one property cross collateralize to other properties like in Broward county.

@Jane W. just seeing your post but thought I would weigh in. 

In Florida, the only thing that survives a tax deed sale is a government lien like code enforcement. The city is typically included as an interested party in the event that they have a lien and there is an overbid amount they get paid first. 

You will not find a title company that will issue insurance on a tax deed. A tax deed is not insurable. your options are to do a quiet title action which is a process by which all other possible claims on a property are wiped out. Once that is done I believe a certificate of title is issued and you can get insurance on it (I say believe because I think that is the document but it might be called something else.) The other option is to hold the property for 5 years and pay the taxes for 5 years. Then you would be able to get it insured. 

There is another option I have found but I am not sure of how effective it is. There is a company called clear to sell. They advertise title insurance in 20 days on a tax deed property, you can check out their site cleartosell.com if you like. On their site, they say that you pay them to do a title search and determine if there is an issue with the title. If they find the title to be in good condition they will give you some sort of certificate that would be accepted by some of their partner title companies. If they find issue with the title you can put the money you paid them towards them doing a quiet title action for you.  I have not used their service yet but I found it when I was doing research on options for Tax Deed properties. 

As to the clerk's obligation to locate the owner no they are not obligated. The statute requires that they make a reasonable effort to locate the property owner and notify them by mail that the property is going to be sold at auction. The clerk's office actually gets the mailing address from the tax collector when they receive the file for the property. The tax collector typically has a title company run a title search on the property to determine who should be notified. If the owner lives abroad then they should have notified the tax collector that their mailing address is international. The clerk will mail overseas if they have an address for the owner that is out of the country. 

Thanks so much for your replies @Wayne Brooks and @Tyler Gibson

How do you do your due diligence? Do you do title searches for each property to ensure there won´t be any surprises like unrecorded liens you can´t find in public records or what´s your process? I called the county and utilities to verify there are no unrecorded liens on the properties I´m interested in but they refused to give me any information. Any tip on how to find out about those liens yourself? 

@Jane W. You can do a “city lien search” by sending a written form to the city/county agencies.....takes a couple of weeks and maybe $50 each.  I don’t know the exact form, the title companies do this on “complete” title searches for closings.