In 2019 my company, Anderson Realty Group, bought a house in Jefferson County from the State. The owner had stopped paying taxes in 2015 after a fire gutted it, and the State picked it up at the 2016 tax sale. When we got it, it was uninhabitable.

We put $88,812 into it — framing, roof, wiring, plumbing, HVAC, windows, doors, siding, gutters. Took a burned shell most of the way back to a house.

Then we filed to quiet title, and the former owner counterclaimed to redeem.

That's the part a lot of investors don't plan for. In Alabama, if the owner redeems, you get back what you paid plus interest — and your "preservation improvements." The fight was over what that phrase means.

The trial court said it only meant work to keep the house from getting worse — tarps, cleanup, that kind of thing. It valued that at $10,000. So the owner could take back a fully rebuilt house and pay us for $10,000 of the nearly $89,000 we spent.

We appealed. The Court of Civil Appeals reversed, and in May 2023 the Alabama Supreme Court affirmed unanimously (Ex parte King, 385 So. 3d 1001). The Court held "preservation improvements" covers valuable and useful improvements that put the property back to its proper use — not just patching it to the condition it was in at the tax sale.

How it ended: once the real number was on the table, he didn't redeem. The house is ours. We're finishing the rehab now and it'll go on the market when it's done — about seven years after we bought it from the State.

What it means if you buy Alabama tax properties:

- If you rehab during the redemption window, real improvements count toward what an owner has to pay you to redeem — not just maintenance.

- Document everything. Invoices, photos, permits, dates. That file is what gets you paid — or, like here, what makes redeeming not worth it.

- This still applies to what you buy from the State. Tax deeds the State sells off its inventory are still under the old system. The county sales have moved to the new bid-down lien auction, which works differently — know which one you're buying in.

- It doesn't mean you'll always get dollar-for-dollar back. The Court didn't set a number; value still gets argued.

- Plan for time. A cheap tax deed can turn into years of holding costs if it's contested.

Happy to answer questions.