In South Florida my wife owns a Townhouse in a small HOA 4 units. Names are changed for privacy.

1. Wife owns unit one
2. Fish owns units two and three
3. Gold's estate owns unit four

My understanding is over a year ago Gold passed away over a year ago. Her son in an email to the HOA said he has turned over the property to the reverse mortgage company. I tried calling the company to followup on the lead and the reverse mortgage company couldn't locate it in the records. At this point I have waited and checked ever so often to see if new court records have been filed on the property. I can't find any evidence of foreclosure.

In the meantime Gold's other son has since been squatting in the unit who I think was not allowed back, by the HOA, into the property (drug abuse). I also know the HOA has filed a lien on the property for the HOA fees.

Today I looked through the taxes and saw someone bought the 2018 tax certificate.

My idea from here is to reach out to the 2018 certificate owner and try to buy the certificate. After I am allowed by the certificate I would try to foreclose on the unit. I figure the worst case scenario is I am out some money paying for the certificate, best case I win the tax deed auction. Anyone know of any pit falls or have other ideas on how to acquire the property?

You have to wait 2 years to apply for a deed.  2018 certificate was probably purchased in June 2019 so if you acquire this certificate you will be able to apply for a tax deed on April 1, 2021. you will have to redeem other taxes. Like 2019 and 2020.  So add two more years of taxes to your investment. Once you apply for a tax deed your interest will be 18% annual on all the money you layout until the tax sale.

It is cheaper to foreclose by tax deed then filing an HOA foreclosure . Tax deed fees are minimal and you will be under $1,000 in fees.

Once all parties are notified (including all current lien holders), the sale will be scheduled and it is the highest bidder that will get the title to the property. So for you to get it you will need to bid everyone out. The good thing is that mortgage and HOA fees will be wiped out but you will still have to deal with your family squatters and go through lawful eviction.

Now you have 3 options for the title to become marketable:

1. Wait 4 years for the title to become marketable.  You can just seat and wait, rent out the property, use, do anything but sell it since title isn't marketable yet.

2. You can file a quiet title action which normally runs around $2,500 with filing fees.  With this action all lien holders will be notified again that you acquired this property by tax deed and they will need to respond within X number of days.  After you get final judgement you title is marketable. All process should not take more then 5 months.

Options 3. File for title certification (clear to sell is one of them) usually cost about the same as quiet title. It's a 60 to 90 day process.

So there you go entire process on one page.  

There should be a deed of trust filed with the county that would tell you who the mortgage holder is. Often if it is a big bank they're not going to talk to you. However if it is a smaller lender, you might get someone to talk with you. You might could buy the note from them and foreclose...or stay in touch, let them foreclose and then buy it from them as an REO.

Since you are in such a small HOA, could you come up with some kind of agreement with the other members to take over the HOA foreclosure process. Maybe fund it on their behalf, and then buy directly from HOA once the become owner. You'd want a great HOA and board certified real estate attorney to draw up this document. I'd think that might be attractive to the other owner as your financials might not look that nice if 25% of the members aren't paying dues...and you're funding them. Attorney fees might also eat up all your reserves if there are any....the downside I guess for them are that they are the majority owners today and if you get the second unit then you are 50/50 owners. So you might want to think through what their objections would be to you doing this with their blessing, how to overcome their objections, and what's in it for them if they agree to help you gain control of the unit.

@Bruce Lynn

Through some unfortunate circumstances I am hoping to work a deal with the owner of the other two but it is too early to tell. The ideal circumstance for me would be to get all the properties. Thank you for taking it the time to respond.

@Scott Rosslow

Sorry I meant to say the files docs are a bit convoluted so I might have a title company review all the properties for me. My understanding is

Gold acquired the house in the late 90s, she then built two town houses. Eventually she carved out a studio from the back of her house which I think her squatting son was living in the early 00s before she kicked him out. During the run up she took out a very big 2nd mortgage. After that the mortgages were carved up as she starting selling units.

I feel like I need to print all the documents and do the crime scene red string on the wall to figure it all out. It also drives me nuts because the first half of the deed for the studio says unit 2 but the attached legal description says unit 1B.

@Roman M.

Thank you for the thorough response. Through my readings and your response I learned that most encumbrances don’t survive but govt. I haven’t found out yet but would that potentially wipe out the probate process as well?

the clerk usually orders title and determines who needs to be notified of the tax deed sale. If all interested parties are notified then all interested are foreclosed. They usually don't set sale until they get proof of service.  It is safe to say that the current owner or owners estate will get proper notice and a lot of times they don't act on it and if that happens then their interest will be wiped out.

I suggest that you have a title co review the tax deed file and all notices just to be on a safe side. You can get a copy of the tax deed file from the clerk and sometimes even online (depending on the county).

Originally posted by @Roman M. :

the clerk usually orders title and determines who needs to be notified of the tax deed sale. If all interested parties are notified then all interested are foreclosed. They usually don't set sale until they get proof of service.  It is safe to say that the current owner or owners estate will get proper notice and a lot of times they don't act on it and if that happens then their interest will be wiped out.

I suggest that you have a title co review the tax deed file and all notices just to be on a safe side. You can get a copy of the tax deed file from the clerk and sometimes even online (depending on the county).

Good suggestions. I think at the for the moment I will reach out and try to acquire the tax certificate from the holder. As I will have to hold that for more than a year I will have time to get a title search and see how to probate shakes out.