AZ Tax Lien - How does it work when there are multiple certificate buyers?

Question

I have been sending out marketing letters to find some wholesale deals (out of state owners.)  I am in Phoenix/Maricopa County.

On the letters that come back as undeliverable, I research the assessor's office, treasurer's office, etc.

I have found a few properties that are behind in their taxes, and naturally, people have purchased tax liens.  I see that in several cases, different year's taxes were bought by different buyers.  (2010 and 2011 tax lien purchased by CP buyer 1234 and 2012 tax lien purchased by CP buyer 5678.)

How exactly does that work out for the buyers if the property needs to be foreclosed?  Doesn't the same person have to own all the liens to purchase the property?

thanks
bill

Raquel Baranow · Answer

The person with the 2010 lien can foreclose when the taxes are 5-years old. The subsequent lien purchaser can pay-off the prior lien and then get ownership through foreclosure. You can contact the lienholders and offer to purchase the lien, it's called an "assignment of the lien." You will likely have to pay a premium for the lien, like $500 plus any interest they earned.

Jerry K. · Answer

Not sure about Maricopa, but on other AZ counties if the lien holder does not pay the next year taxes, then the lien is added to the next year taxes and sold as a new lien.  That means the new buyer now has paid both years of taxes and is the sole owner of the lien.

The history may show a different bidder for a previous lien, but that could just mean they were the original lien winner and have let it go to a new bidder in the next year's auction.

Jerry K. · Answer

William Petrisko I know it can be confusing, but one of the first rules of tax lien investing is; read and understand the rules for the county and state you are investing in.  It's the Wild West out there in tax lien investing and rules can be different in each state, county and even city (cities on mostly the east coast).

I invest in several AZ counties outside of Maricopa county.  I also invest in IL and Florida.  All different rules and even with all the reading I do on the statutes and auction rules, I usually get blindsided by some little quirky rule along the way.

Just happened this morning in a Florida county online lien auction.  I had a list of liens I wanted to bid on.  I went to place my deposit via ACH and I see the deadline to make deposits was a few days ago.  My own fault, but all the other counties sent an email a couple of days before the deposit deadline - not this county - it had different rules.

Mark H. · Answer

Bill, the short answer is they're both right..  maricopa sells one year at a time, other counties sell multiple years..  in maricopa, if youre hoping to get the property, you need to buy the lein every year.

William Petrisko · Answer

Ok... Now more confused that when I started... Is this what each person is saying?

Raquel says the most recent lienholder has the ultimate right to the property, but must pay off all of the lienholders that purchased a lien on previous years (based on negotiation directly with those lienholders).

Jerry says that if the original lienholder does not choose to purchase the next year's lien on the same property, the new lien buyer is actually required to buy (redeem) any previous liens, thus becoming the sole lienholder of the property.

Bill

AZ Tax Lien - How does it work when there are multiple certificate buyers?

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