Urgent: Buying Tax Deed properties, Attorney/Title Co Needed, Fl

11 Replies

Hi BP friends,

I desperately need your help. After learning about tax sales and doing due diligence I found two properties I want to buy at an online auction a week from now. 


1. On the 1st property (vacant land, raw), there are multiple HOA and IRS liens. I have the list of liens on a title search but they don't specify the amount. I will be calling HOA tomorrow and hopefully find out the numbers. For the IRS Iien, I'm not sure if I can get this information online and in time. The property belongs to a PLLC "as trustee under that certain land trust". I looked up the PLLC and it's a criminal law firm, which is another scary part.


2. The second property (SFH, occupied) belongs to Mr. John Smith's heirs, the owner is dead, and perhaps no formal probate has been done on his estate. Therefore the notice of the upcoming tax deed sale was sent to "John Smith's Heirs" and did not have a name on it. So there is a chance the sale will be overturned.

I'm in Florida and have not been able to find a RE attorney/title company to help me - they are either too busy or don't work with auctions. I would greatly appreciate any input or recommendations on how to pursue the deals.

I'm also open to paid mentorship/training/education on tax deeds if you have experience with this. Feel free to DM me. 

Thank you all in advance!

@Anastasia S do you belong to your local REIA? That, or a local REI group on Facebook have been a great source of investor-friendly resources like Title Agencies, attorneys and accountants when I've needed one. Both of those situations sounds complex enough that you'd want professional help to get them done, and done right so that you don't end up with a bad deal.

@Anastasia S. On property 1. The right of the IRS to sell the property is one of the few liens that remains even after real property is sold in a tax foreclosure auction.  In most counties, 

" Any federal Internal Revenue Service liens that, pursuant to provisions of federal law are not discharged by the sale, even though the tax collector has provided proper notice to the Internal Revenue Service before that date. "

IRS liens attach to property owned by the taxpayer. IRS does not file a lien against a particular piece of property the way a mortgage holder would. When any real property of the taxpayer is foreclosed the taxpayer still owes the IRS. That lien protects the IRS so that they will receive any proceeds from the sale of property instead of the taxpayer.

If the IRS believes the sale was dramatically under market value, it retains the right for up to a year? (that's from memory) to foreclose its lien and resell the home. This is extremely rare and not something I would personally worry about.  If the IRS chose to foreclose its lien after you bought the property at a tax foreclosure auction, you'd be paid back the amount of your purchase price and a few costs.   Also check the date the IRS lien was filed.  They only last 10 years.

Regarding your property #2. I would have little concern about buying it the property tax foreclosure auction.  However, the prices paid at property tax auctions in my county are typically over 85% of market value.  So I would attempt to get at least a portion of the property from a relative if you can.  I'd locate a relative, and offer cash for a Quit Claim Deed, then pay up the taxes to remove the property from the auction. 

Property Tax Foreclosure auctions can be a bit tricky though.  The excess proceeds from the auction (amount paid for the property that is more than the taxes owed), often become the county's money to spend.  So they may have quite specific rules about who can pay past due property taxes.  If you pay up someone else's property taxes at the last minute, you'd be potentially denying the county an even bigger source of revenue, (the excess proceeds).  County officials may wish to prevent an 'investor' from denying their budget those excess proceeds.  They may say that the relative was not on title, so he/she has no right to pay the taxes.  In some states you would need to start a probate action, and be appointed the executor before being able to pay the property taxes.  Best wishes  

Originally posted by @Jay Roney :

@Anastasia S do you belong to your local REIA? That, or a local REI group on Facebook have been a great source of investor-friendly resources like Title Agencies, attorneys and accountants when I've needed one. Both of those situations sounds complex enough that you'd want professional help to get them done, and done right so that you don't end up with a bad deal.

Hi Jay, thank you for your advice. I've been wanting to join a local REI group but due to the covid they don't hold meetings as of right now. I've been networking on the BP and find the community very helpful - I've received a couple of local referrals - however, most of the RE attorneys are either too busy or not familiar with foreclosures/tax deed auctions. I will keep looking tho - it takes time to build a team when you are new to the area:)

 

Originally posted by @Davido Davido :

@Anastasia S. On property 1. The right of the IRS to sell the property is one of the few liens that remains even after real property is sold in a tax foreclosure auction.  In most counties, 

" Any federal Internal Revenue Service liens that, pursuant to provisions of federal law are not discharged by the sale, even though the tax collector has provided proper notice to the Internal Revenue Service before that date. "

IRS liens attach to property owned by the taxpayer. IRS does not file a lien against a particular piece of property the way a mortgage holder would. When any real property of the taxpayer is foreclosed the taxpayer still owes the IRS. That lien protects the IRS so that they will receive any proceeds from the sale of property instead of the taxpayer.

If the IRS believes the sale was dramatically under market value, it retains the right for up to a year? (that's from memory) to foreclose its lien and resell the home. This is extremely rare and not something I would personally worry about.  If the IRS chose to foreclose its lien after you bought the property at a tax foreclosure auction, you'd be paid back the amount of your purchase price and a few costs.   Also check the date the IRS lien was filed.  They only last 10 years.

Regarding your property #2. I would have little concern about buying it the property tax foreclosure auction.  However, the prices paid at property tax auctions in my county are typically over 85% of market value.  So I would attempt to get at least a portion of the property from a relative if you can.  I'd locate a relative, and offer cash for a Quit Claim Deed, then pay up the taxes to remove the property from the auction. 

Property Tax Foreclosure auctions can be a bit tricky though.  The excess proceeds from the auction (amount paid for the property that is more than the taxes owed), often become the county's money to spend.  So they may have quite specific rules about who can pay past due property taxes.  If you pay up someone else's property taxes at the last minute, you'd be potentially denying the county an even bigger source of revenue, (the excess proceeds).  County officials may wish to prevent an 'investor' from denying their budget those excess proceeds.  They may say that the relative was not on title, so he/she has no right to pay the taxes.  In some states you would need to start a probate action, and be appointed the executor before being able to pay the property taxes.  Best wishes  

Hi Davido,

Thank you so much for such a quick and detailed answer, I found it very helpful. I'm going to proceed with the action. From what I've been hearing it's very rare for the IRS to go after the property that was sold at the tax deed sale (even tho they can if they really want to). From my understanding, all HOA liens get wiped out, so no need to worry about them. Please correct me if I'm wrong - I heard people saying they don't and I would need to negotiate them with the homeowners association.

I will do a QT right away if I win the property at the auction. Fingers crossed.

Originally posted by @Davido Davido :

@Anastasia S. On property 1. The right of the IRS to sell the property is one of the few liens that remains even after real property is sold in a tax foreclosure auction.  In most counties, 

" Any federal Internal Revenue Service liens that, pursuant to provisions of federal law are not discharged by the sale, even though the tax collector has provided proper notice to the Internal Revenue Service before that date. "

IRS liens attach to property owned by the taxpayer. IRS does not file a lien against a particular piece of property the way a mortgage holder would. When any real property of the taxpayer is foreclosed the taxpayer still owes the IRS. That lien protects the IRS so that they will receive any proceeds from the sale of property instead of the taxpayer.

If the IRS believes the sale was dramatically under market value, it retains the right for up to a year? (that's from memory) to foreclose its lien and resell the home. This is extremely rare and not something I would personally worry about.  If the IRS chose to foreclose its lien after you bought the property at a tax foreclosure auction, you'd be paid back the amount of your purchase price and a few costs.   Also check the date the IRS lien was filed.  They only last 10 years.

Regarding your property #2. I would have little concern about buying it the property tax foreclosure auction.  However, the prices paid at property tax auctions in my county are typically over 85% of market value.  So I would attempt to get at least a portion of the property from a relative if you can.  I'd locate a relative, and offer cash for a Quit Claim Deed, then pay up the taxes to remove the property from the auction. 

Property Tax Foreclosure auctions can be a bit tricky though.  The excess proceeds from the auction (amount paid for the property that is more than the taxes owed), often become the county's money to spend.  So they may have quite specific rules about who can pay past due property taxes.  If you pay up someone else's property taxes at the last minute, you'd be potentially denying the county an even bigger source of revenue, (the excess proceeds).  County officials may wish to prevent an 'investor' from denying their budget those excess proceeds.  They may say that the relative was not on title, so he/she has no right to pay the taxes.  In some states you would need to start a probate action, and be appointed the executor before being able to pay the property taxes.  Best wishes  

I believe in Florida when proper notice of the tax sale is given to the IRS the interest is extinguished though the IRS may claim a right of redemption.



How Do Tax Deed Sales in Florida Work? | DeWitt Law Firm

 

Originally posted by @Davido Davido :

@Anastasia S. On property 1. The right of the IRS to sell the property is one of the few liens that remains even after real property is sold in a tax foreclosure auction.  In most counties, 

" Any federal Internal Revenue Service liens that, pursuant to provisions of federal law are not discharged by the sale, even though the tax collector has provided proper notice to the Internal Revenue Service before that date. "

IRS liens attach to property owned by the taxpayer. IRS does not file a lien against a particular piece of property the way a mortgage holder would. When any real property of the taxpayer is foreclosed the taxpayer still owes the IRS. That lien protects the IRS so that they will receive any proceeds from the sale of property instead of the taxpayer.

If the IRS believes the sale was dramatically under market value, it retains the right for up to a year? (that's from memory) to foreclose its lien and resell the home. This is extremely rare and not something I would personally worry about.  If the IRS chose to foreclose its lien after you bought the property at a tax foreclosure auction, you'd be paid back the amount of your purchase price and a few costs.   Also check the date the IRS lien was filed.  They only last 10 years.

Regarding your property #2. I would have little concern about buying it the property tax foreclosure auction.  However, the prices paid at property tax auctions in my county are typically over 85% of market value.  So I would attempt to get at least a portion of the property from a relative if you can.  I'd locate a relative, and offer cash for a Quit Claim Deed, then pay up the taxes to remove the property from the auction. 

Property Tax Foreclosure auctions can be a bit tricky though.  The excess proceeds from the auction (amount paid for the property that is more than the taxes owed), often become the county's money to spend.  So they may have quite specific rules about who can pay past due property taxes.  If you pay up someone else's property taxes at the last minute, you'd be potentially denying the county an even bigger source of revenue, (the excess proceeds).  County officials may wish to prevent an 'investor' from denying their budget those excess proceeds.  They may say that the relative was not on title, so he/she has no right to pay the taxes.  In some states you would need to start a probate action, and be appointed the executor before being able to pay the property taxes.  Best wishes  

 In regards to IRS liens, I was aware that they only last for 10 years but I believe that they can be reinscribed. Do you know if this happens or is it pretty common that that after 10 years they go away and are not renewed for another 10 years ? 

Originally posted by @Anastasia S. :

Hi BP friends,

I desperately need your help. After learning about tax sales and doing due diligence I found two properties I want to buy at an online auction a week from now. 


1. On the 1st property (vacant land, raw), there are multiple HOA and IRS liens. I have the list of liens on a title search but they don't specify the amount. I will be calling HOA tomorrow and hopefully find out the numbers. For the IRS Iien, I'm not sure if I can get this information online and in time. The property belongs to a PLLC "as trustee under that certain land trust". I looked up the PLLC and it's a criminal law firm, which is another scary part.


2. The second property (SFH, occupied) belongs to Mr. John Smith's heirs, the owner is dead, and perhaps no formal probate has been done on his estate. Therefore the notice of the upcoming tax deed sale was sent to "John Smith's Heirs" and did not have a name on it. So there is a chance the sale will be overturned.

I'm in Florida and have not been able to find a RE attorney/title company to help me - they are either too busy or don't work with auctions. I would greatly appreciate any input or recommendations on how to pursue the deals.

I'm also open to paid mentorship/training/education on tax deeds if you have experience with this. Feel free to DM me. 

Thank you all in advance!

The best place to find attorneys that handle these types of issues is to get access to that county's online property records. Look in the civil section for these types of cases. Here it is called suits to quiet title. I can pull up recent cases and see who the attorneys are that represent the plaintiff. You will likely see its the same hand full of attorneys. That is who you want to hire they will be the most knowledgeable. 

 

@Will Sifert   Excellent idea to use the County's online property records to find attorney's knowledgeable and experienced with Quiet Title action!   Yes, in my State, WA, the IRS (anyone) with a court adjudicated debt can petition the Court to have their debt renewed for another ten years.   Since, it is a monetary/property issue, State law controls the statutory expiration period of the lien.  I have not personally ever seen an IRS lien extended.   If the amount owed to the IRS was high (Millions?) and the IRS had been receiving some payments, then I would be concerned.  But lesser debt, with no history of payment is unlikely to trigger IRS to seek Court approved extension of its lien. 

Originally posted by @Will Sifert :
Originally posted by @Anastasia S.:

Hi BP friends,

I desperately need your help. After learning about tax sales and doing due diligence I found two properties I want to buy at an online auction a week from now. 


1. On the 1st property (vacant land, raw), there are multiple HOA and IRS liens. I have the list of liens on a title search but they don't specify the amount. I will be calling HOA tomorrow and hopefully find out the numbers. For the IRS Iien, I'm not sure if I can get this information online and in time. The property belongs to a PLLC "as trustee under that certain land trust". I looked up the PLLC and it's a criminal law firm, which is another scary part.


2. The second property (SFH, occupied) belongs to Mr. John Smith's heirs, the owner is dead, and perhaps no formal probate has been done on his estate. Therefore the notice of the upcoming tax deed sale was sent to "John Smith's Heirs" and did not have a name on it. So there is a chance the sale will be overturned.

I'm in Florida and have not been able to find a RE attorney/title company to help me - they are either too busy or don't work with auctions. I would greatly appreciate any input or recommendations on how to pursue the deals.

I'm also open to paid mentorship/training/education on tax deeds if you have experience with this. Feel free to DM me. 

Thank you all in advance!

The best place to find attorneys that handle these types of issues is to get access to that county's online property records. Look in the civil section for these types of cases. Here it is called suits to quiet title. I can pull up recent cases and see who the attorneys are that represent the plaintiff. You will likely see its the same hand full of attorneys. That is who you want to hire they will be the most knowledgeable. 

 In Fl the place you would want to look is the the Court Civil Action records, not the property records which are call the Official Records.  Unfortunately I believe the cases are not indexed under type of case such as Quiet Title Action.