All Forum Posts by: Denise Evans

You can probably get a replacement certificate issued and then surrender it for a tax deed.  If you or your mother have occupied the property for ten years you can probably get title insurance just on an affidavit and no quiet title lawsuit because you'll have color of title and ten+ years of adverse possession.

If there has been no possession, the former owner can get the property back and pay you nothing under Rioprop v. BBVA Compass.

@Will Sifert, Interesting about Louisiana. Did not know that. Thanks. During the Great Recession there was a popular belief that people could move into abandoned properties that were usually pre-foreclosure, register their adverse possession with the county and have full ownership with no mortgage debt after one year. I never checked into it because I simply didn't have time to research all the states. Do you know if that was real?

There is some inaccurate advice on this thread. In Alabama you can buy a tax certificate at the annual auctions for many counties. Other counties sell tax liens.  If they don't redeem within 3 years after a tax lien sale you can file a lawsuit to foreclose your lien, obtain possession, obtain a quiet title order and get a clerk's deed. At that point, it is all over for the former owner. If they redeem during the lawsuit, they also have to pay your legal fees in addition to taxes and interest.

For tax certificate counties, you are entitled to possession immediately after receipt of the certificate, usually fairly quickly after the auction.  If the property is legally abandoned you can take DIY possession. If not, you can file an ejectment lawsuit. They have 3 years after the action within which to redeem, which will cost them taxes plus interest. If the property contains a residential structure they will also have to pay the increased value resulting from your preservation improvements, plus insurance, plus interest.  if the property is in an official urban reneewal or urban redevelopment area, it does not matter what type of property or what kind of improvements--it can be new construction even--a redeeming party will have to pay you the increased value due to the improvements plus insurance plus interest.

While you have possession and before the property is redeemed, if it is redeemed at all, you can occupy the property or rent it out. Even if the taxpayer redeems, you get to keep all of your collected rents.

Once the tax deed has issued three years after the auction, there is a split of opinion among experts regarding whether you can quiet title immediately (assuming you have been in possession in the meantime) or must wait an additional three years to burn off what is called "judicial redemption rights." The more modern view among experts, because of some statute changes and other reasons, is that if you are in exclusive possession at the time of the tax deed, you can quiet title immediately. The former owner has no rights after that.

For counties doing tax certificate sales, if there are no bidders for a property, it goes on the state inventory.  Investors can buy off the state inventory website 24/7/365.  You buy a tax certificate if it has been fewer than three years since the auction. Otherwise, you get a tax deed.

There are about half a dozen traps and pitfalls where wrong choices can cost you a lot of money. Easy to avoid if you know about them. Easy to fall into if you don't.  The reason Alabama is not crowded with tax sale investors is so many people don't know the rules, get hurt, never invest again and tell their friends to never invest.  It is an extremely lucrative field if you know what you are doing.

Regarding adverse possession, that is usually not a good investment strategy in Alabama. It takes 10 years of exclusive and continuous possession by yourself or your tenant if you have color of title--a deed, a will, some defective instrument--or it is a boundary line issue. If you are a pure squatter, it takes 20 years of exclusive and continuous possession.

@Thomas Kramer, it can be very confusing, even for lawyers.  You might find yourself having to argue with one who thinks you can get legal fees only in a judicial redemption.  There is no law school course in "statutory construction" or that even forms a segment of some course about related issues.  Law students and lawyers have to pick it up along the way. Unless they have to brief a lawsuit issue that involves statutory construction, it just never comes up.  I was the  director of the Legal Research Department at UA when I was a third year law student, so I did a MASSIVE amount of research for lawyers and judges all over the state. I also spot-checked the research of all the students working for me.  As I result, I gained a lot of knowledge that simply is not taught in classes. It has really proved valuable all these years.

@Thomas Kramer, it is confusing unless you know context. The beginning of 40-10-83 starts with "When the action is against..."  The problem is, there is no immediate antecedent. What action?   You have to read the entire Article in its entirety, all sections together.

The short answer is, "the action" refers to the action a purchaser is entitled to bring for possession, provided it has given notice and waited at least 6 months after the issuance of the tax certificate.  That is earlier in Article 3.

For the long answer, you have to look at rules of statutory construction and the fact that 40-10-70 through 40-10-83 are all in Article 3 of Title 40, Chapter 10. That means they all go together, and should all be interpreted with reference to each other.  From that, it is obvious that when 40-10-74 gives  you the right to possession as soon as the tax certificate is issued (but limits when you can file an ejectment lawsuit to 6 months after taxpayer's receipt of notice with demand for possession) and 40-10-83 gives you legal fees if the taxpayer redeems in an ejectment lawsuit, both of those go together. The train does not suddenly jump the tracks some place and start limiting Article 3 to just judicial time periods. Article 3 is about possession, and all the details and issues related to possession, which is clearly granted as soon as the tax certificate is issued.

I think the confusion comes because of 40-10-82 and the short statute of limitations, which addresses only the judicial redemption time period. That is not the train jumping the tracks and heading in a different direction. That is simply a limit on the possessory rights granted by the statute. In other words, Rioprop, basically.

If you think of it this way:

40-10-83 gives you possessory rights and lets you file an ejectment lawsuit with only a tax certificate

Other sections address problems with the tax sale, burdens of proof, and tender, all having to do with technicalities of ejectment lawsuits

One section addresses a statute of limitations with reference to an ejectment lawsuit, and others

The final section addresses the remedy of awarding legal fees of the taxpayer redeems when ejectment is file.

@Chinelo Okonkwo, you cannot assign your quote. You can find a buyer, put them under contract, buy the property from ADOR and then sell it to your buyer.

@Doug Ward, be careful about Dallas County tax sale properties. It is unique in that the city of Selma has its own tax sale for city taxes due, and the county has a tax sale for state and county taxes due.  You want to make sure you have the rights from BOTH tax auctions.

The claim is for preservation improvements. Courts are enforcing that. The argument is that if the investor did nothing and the city did the work themselves and imposed a lien, the amount would be much higher. Municipal liens paid off by the investor are compensable upon redemption, plus interest

@Dorthea Young, the answer is too long to put in a BP post.  I'll reach out to you for a conversation.  

@Darryl Patterson you are not entitled to possession with a tax lien. 

As a result, you cannot make improvements because not are not allowed to set foot on the property until is has been three years after the auction AND you have filed a judicial foreclosure lawsuit that names as parties everyone with a redemption right AND nobody redeems in that lawsuit AND the judge signs an order foreclosing your lien and quieting title in you AND 42 days have passed from the date of that order so it is considered final and non-appealable.

With a tax lien auction, there is no such thing as judicial redemption.  The taxpayer can redeem at any time for the first three years, and can still redeem at any time afterwards up until the investor files a judicial foreclosure lawsuit and the judge grants the judicial foreclosure order.  If things go that late, then the redeeming party must also pay the legal fees for that lawsuit.