All Forum Posts by: Denise Evans

Why waste time on quotes from Alabama Department of Revenue, which are the total of all taxes and interest to date. Find former owner, buy their rights for very little money (often only $100 to $200) and redeem. Virtually the same money, faster acquisition, fewer problems regarding title insurance, etc.

Sorry, Stephanie says they manage only the properties owned by their investor portfolio.  AHI does a very good job, link below. 

https://www.ahiproperties.com/

This question came up yesterday, and I thought other people might have the same concern. As a result, I am sharing it here. After a tax certificate sale in Alabama, the investor is entitled to possession and in some circumstances can make improvements to the property. If there is a redemption during the certificate or the tax deed period, the redeeming party must pay for the value of the improvements, in addition to taxes and interest. (The rules for Alabama tax lien sales are different.)

The question was, "If the taxpayer indicates they want to redeem, must the investor stop all improvement activity? If so, for how long? At what point has the taxpayer had enough time to redeem and the investor is allowed to continue with its improvements?"

There is no clear line, safe-harbor, answer. There is no statute. There is no appellate authority in the tax sales context. The best advice I can offer you is to stop everything when there is a redemption request. Provide the taxpayer, in writing, with your statement of lawful charges for improvements you have already made, and insurance. In that same writing, tell the taxpayer they have ten calendar days to tender payment or you will proceed with improvements and the redemption cost will continue to increase.

If they start the official dispute process by appointing a referee, you will have to wait until the end of that process, and then send a new notice with a new ten day deadline. The referee process takes around 30 days.

The important word here is "tender." That is a legal word that means the taxpayer has made the offer to pay and has the funds to back it up. To be effective, tender requires readiness, willingness, and a present ability to pay. (Alabama Water Co. v. Anniston, 227 Ala. 579, 151 So. 457 (1933)) If a taxpayer does not tender payment within the redemption deadlines, then it no longer has the right to redeem. (Kimble v. Fowler, 222 Ala. 178, 131 So. 440 (1930)) This has been upheld in the area of foreclosure redemptions. (Durr Drug Co. v. Acree, 241 Ala. 391, 2 So.2d 903 (1941))

So, just SAYING someone wants to redeem is legally meaningless if they do not actually have the money at that time or have the present ability to get it easily and almost immediately.

When receiving a redemption request that stops improvement work, you might want to task for proof of funds for at least the taxes, interest, and insurance. Those items cannot be legally disputed. Without that proof of funds, there was never really a tender.

Bottom line, if the taxpayer misses the deadline and later argues you should have given them longer to redeem, you should fight back by saying they never made a legal tender and your grace period was only a courtesy. Using a word like "tender" pretty much sends a message you know what you are talking about, but you might want to reinforce that by quoting the language from my book. That way, if the taxpayer goes to a lawyer and gives that person your letter, the lawyer will know it is probably a lost cause and decline to represent them.

This question came up yesterday, and I thought other people might have the same concern. As a result, I am sharing it here.  After a tax certificate sale in Alabama, the investor is entitled to possession and in some circumstances can make improvements to the property. If there is a redemption during the certificate or the tax deed period, the redeeming party must pay for the value of the improvements, in addition to taxes and interest. (The rules for Alabama tax lien sales are different.)

The question was, "If the taxpayer indicates they want to redeem, must the investor stop all improvement activity? If so, for how long?  At what point has the taxpayer had enough time to redeem and the investor is allowed to continue with its improvements?"

There is no clear line, safe-harbor, answer. There is no statute. There is no appellate authority in the tax sales context. The best advice I can offer you is to stop everything when there is a redemption request. Provide the taxpayer, in writing, with your statement of lawful charges for improvements you have already made, and insurance. In that same writing, tell the taxpayer they have ten calendar days to tender payment or you will proceed with improvements and the redemption cost will continue to increase.

If they start the official dispute process by appointing a referee, you will have to wait until the end of that process, and then send a new notice with a new ten day deadline. The referee process takes around 30 days.

The important word here is "tender." That is a legal word that means the taxpayer has made the offer to pay and has the funds to back it up.  To be effective, tender requires readiness, willingness, and a present ability to pay. (Alabama Water Co. v. Anniston, 227 Ala. 579, 151 So. 457 (1933)) If a taxpayer does not tender payment within the redemption deadlines, then it no longer has the right to redeem.  (Kimble v. Fowler, 222 Ala. 178, 131 So. 440 (1930)) This has been upheld in the area of foreclosure redemptions.  (Durr Drug Co. v. Acree, 241 Ala. 391, 2 So.2d 903 (1941))

So, just SAYING someone wants to redeem is legally meaningless if they do not actually have the money at that time or have the present ability to get it easily and almost immediately.

When receiving a redemption request that stops improvement work, you might want to task for proof of funds for at least the taxes, interest, and insurance. Those items cannot be legally disputed. Without that proof of funds, there was never really a tender.

Bottom line, if the taxpayer misses the deadline and later argues you should have given them longer to redeem, you should fight back by saying they never made a legal tender and your grace period was only a courtesy.  Using a word like "tender" pretty much sends a message you know what you are talking about, but you might want to reinforce that by quoting the language from my book. That way, if the taxpayer goes to a lawyer and gives that person your letter, the lawyer will know it is probably a lost cause and decline to represent them.

Call Stephanie Devine with Atlas Rental Property, 205-202-4118 ext. 103

Alabama 45 counties (about 2/3) including all the large ones now do tax lien auctions with online auctions and interest bid-down. Redemption period 3 years.  For those still doing tax certificate auctions, and for purchases over the counter from the State, tax deed is automatic three years after auction, but there might still be redemption rights. The tax deed vastly improves the investor's legal and economic position, though. For tax  liens, you file a judicial foreclosure lawsuit to foreclose your lien. You name as defendants anyone who has redemption rights. If they don't redeem (by paying taxes, interest, and investor legal fees) then the judge forecloses the lien, quiets title in the investor and orders the circuit clerk to issue a deed to the investor. There is no auction. Outsiders do not get a chance to get the property when there is a judicial foreclosure. It's not like a judicial foreclosure of a mortgage, in those states that use that method.

Possession rights in investor automatic granted after tax certificate sale. No automatic with tax lien sale, but there are strategies for gaining possession and improving the property, and getting reimbursed even if there is a redemption. Plus, investor can keep rental income in the meantime.

@Stacy Brown, my apologies for late reply. I stopped getting BP  notices for some reason, but I think that is fixed now. You have 60 calendar days after lease termination and surrender of possession to provide a written accounting of security deposit deductions and/or a refund of the security deposit.  If you miss your 60 day deadline, you are automatically liable for double the security deposit in damages to the tenant, plus legal fees.  It is NEVER a defense to say you told them, or of course they knew why they weren't getting it, or a lease clause said they forfeited it for early termination. ALWAYS send that written  notice within 60 days.

Although there is no requirement about method of transmitting the written notice, I like to do it as many ways as possible so it is almost impossible for someone to later claim they never go it. So, itemized your deductions for lease early termination fee, plus any late fees, plus the damage, which will leave a balance due from them after giving them a credit for the security deposit. I like to send by regular mail, certified mail, photograph the notice and send by text message, and send it as an attachment to an email. If you have other social media connections, send by those methods also, but make sure it is a private message.

They are required to provide you with a forwarding address. If they do not do that, you send the notice to the premises rented by them before they left. It might be forwarded by USPS according to a forwarding order, or it might be returned to you, but at least you've done what you were supposed to do. If returned to you, keep it in the tenant's file in case that becomes important later.

Alabama is very landlord friendly.  Security deposit limited to one month's rent but unlimited prepaid rent allowed plus other methods of rent security. 

Expedited procedures for evictions with most time periods only 7 days and priority setting for things that go to trial. Appeal allowed, but tenant must post appeal bond equal to unpaid rent and charges plus pay each month's rent during appeal time. So, almost no frivolous appeals.

Defaults must be cured in 7 business days after written notice or landlord can terminate. Multiple similar defaults in short time periods authorize automatic termination with no need for giving notice and opportunity to cure. Some things (such as presence of drugs, no matter who they belong to) are grounds for immediate termination with no cure rights. Fraud regarding  need for disability animals (including emotional support animals) has been criminalized. 

Generous time periods for deposit refund (60 days) and short time period for forfeiture of deposit (90 days) if tenant does not claim or does not cash check. Then landlord can keep the money, even if no charges against the deposit.

Automatic renewal clauses are enforceable. Rent acceleration clauses after default are enforceable.

Very few "disallowed" clauses in leases.

Jefferson County, where Birmingham (largest city in state) is located, has one glitch. If you evict and get your turnout order, the sheriff's department is running 3-4 months behind in actually serving those orders. Knowledgeable defaulted tenants then work the system and hold you up for keys for cash to move out quietly, otherwise they just stay until the turnout order is served. No other counties have that problem.

Alabama tax certificate (and the newer tax lien) investing is not for the uninformed, but ALL problems can be circumvented easily and very profitably by the well-informed. The red tape is minor and can be handled yourself, without lawyers, with advance planning.  I have a list of attorneys if anyone wants it, but it's usually not necessary.  The newer tax lien auction procedure is now being followed by a  majority of Alabama counties and is very straightforward. There are some things you can do to gain the possession before foreclosure that everybody likes about tax certificate investing, so it can be the best of both worlds. After three years of holding the  lien, you can foreclosure you lien and gain the property unless someone with redemption rights redeems.  Outsiders, third parties, have NO rights to grab the property or bid at auction if you foreclose your lien.

@Joshua Tucker, if you will email me, I'll send you the current list of attorneys knowledgeable in Alabama tax sales law.