What survives the deed at a CT tax sale (and what doesn't)

Question

Watching two CT tax sales this month, Bethel Aug 5 and Stafford Aug 11, and they're a good reminder that the winning bid is the easy part. What kills people is what survives the deed.

CT municipal tax sales run under CGS 12-157. Sale extinguishes most junior encumbrances after the six-month redemption runs, but not all of them. A federal tax lien doesn't just vanish, the IRS holds a 120-day redemption right of its own, and if you didn't check for one before you bid, that's your problem now. Municipal charges that aren't part of the tax being foreclosed, sewer and water assessments, certain blight liens, can ride through too depending on how they attached.

I read these the way I read loan files for fifteen years underwriting. Pull the land records at the town clerk, not a county index, CT has no counties, and trace every lien back to when it attached and whether the tax sale actually cuts it. Half the "surprises" people hit post-auction were sitting in the record the whole time.

For those of you buying tax deeds in other states, how are you handling IRS lien checks before you bid? Curious whether people are pulling them themselves or paying someone.

Simone Owens · Answer

Jeramie, appreciate this, and sorry for the slow reply. Agree on the core point: the land records are the truth. One adjustment for Connecticut specifically: there’s no county index here. CT abolished county government in 1960, so deeds, liens, and federal filings all sit with the town clerk in the town where the property is. Out-of-state bidders lose time looking for a county office that doesn’t exist.

Your affidavit point is a good one, and CT puts it in statute. The buyer can request the tax collector’s affidavit in writing within 90 days after the deed is recorded (CGS 12-159).

One layer I’d add. In CT the auction notice itself often lists what survives the sale, and most bidders skip straight to the dollar amount. Two notices I read this week: one carries an SBA mortgage the buyer has to pay off unless it’s released, and another carries a city lien that accrues per square foot per day. Neither shows up in the auction listing summary. Both are spelled out in the notice. Read the surviving encumbrances section before you read the price.

Jeramie Hicks · Answer

For IRS liens, the check most bidders skip is the county land records, not the auction flyer. A federal tax lien is filed in the county where the property sits, so you run the owner name through the grantor/grantee index and look for anything from the United States or the IRS. Federal court records won't show it - tax liens don't get filed there.

Here's why it matters: an IRS lien survives a state tax sale unless the IRS got proper notice, and even when it did, the IRS gets a 120-day redemption window after the sale. During that window you effectively can't get insurable title. So the pre-bid routine is unglamorous: vesting deed to confirm the actual owner of record, a full chain search for federal and state filings, and the town's affidavit that every interested party was properly noticed. A defective notice can unwind the whole sale, and you're the one left holding the receipt.

The auction flyer is marketing. The land records are the truth.

What survives the deed at a CT tax sale (and what doesn't)

2 Replies