All Forum Posts by: Denise Evans

@Brooke Dunn  You do not need to find the 2007 investor and get them to record their tax deed. They probably never surrendered their certificate to get a deed.  The 2011 tax sale wiped out whatever interest they had.  A title company will require you to file a quiet title lawsuit and obtain a quiet title order before they will insure title. Without title insurance, you will not be able to sell on a warranty deed for full retail price, and you will not be able to borrow money and provide a mortgage on the property. THERE ARE NO EXCEPTIONS to the quiet title lawsuit in Alabama, no matter what anybody else tells you.  Alabama tax sales law is far too complicated, and there are far too many ways for former owners to still have rights, for any title company to take chances without a quiet title order. If you will contact me, I will send you a list of lawyers who know this very specialized area of law. You can contact several of them and make a decision about who to hire.  I am retired from practicing law, so I am not on the list. This is not a "plug" for you to hire me.

@Darryl Patterson, prevailing wisdom says you must possess the property for three years AND THEN file a lawsuit to quiet title.  On the other hand, I have two theories about why you should not have to do that.

1)  If you are able to locate the former owner and serve lawsuit papers on him/her, then you can file the in personam quiet title lawsuit. In that case, it is the defendant's obligation to appear in court and argue why you should not be allowed to quiet title.  There is no guardian ad litem. If you are able to take possession for at least some period of time, and then file the lawsuit and take a default judgment, you should be okay.  Even if the judge has a different opinion, you do not have the burden of proof with this type of QT lawsuit. So, if no one shows up to argue against you, you should win.

2) If you file an ejectment lawsuit against the former owner and they do not counterclaim and ask for judicial redemption, it is my opinion that was a compulsory counterclaim. Failing to assert it in your ejectment lawsuit, they have lost those rights forever. As soon as your ejectment order is final and non-appealable (42 days after entry) then you should be able to quiet title immediately

@Ralfie Doe, you should never give a warranty deed for tax sale property unless you have title insurance. A warranty deed makes promises that the title is perfect. Nothing void about the tax sale, no redemption rights outstanding, etc. You should give only a quitclaim deed. It makes no promises. It basically says, "I'm not claiming I own anything at all, legally, but whatever I do have, I am transferring to you."

Void means it was a bad sale.  As if it never happened. No good.  No rights passed to the purchaser or to the state.  There is a separate statute that says even if a tax sale is void, the taxpayer must still pay the buyer for taxes plus interest. What he does NOT have to pay is improvements, insurance, or interest on overbid. If the investor rented the property out, the investor has to give all the rent money to the taxpayer.  If the investor used the property himself, he owes rent to the taxpayer. Those are the consequences of a void tax sale.

@Ralfie Doe, @Tai Bhattad, the quitclaim grantee (the company) is the owner of the redemption rights and all other rights. You should contact them to see if they will execute a quitclaim deed to you.  If not, file an ejectment lawsuit.  You have the following risks with this property:

(1) Based on Equivest v. Stiff, recent Supreme Court decision, the company might be able to claim the tax sale was void, but they still  have to pay you for taxes plus interest if they redeem. If you file for ejectment and are able to get a default judgment, and then make improvements, they might later be able to assert the tax sale was void and not pay you anything for the improvements. Whether or not they can do that even after your ejectment lawsuit is a tactical consideration you should discuss with an attorney. Make sure any attorney you hire has proof of malpractice insurance. These issues involving technicalities of civil procedure and issue preclusion can be tricky.  You either know them or you don't. If an attorney gives you advice that is clearly wrong, you'd like to know they have malpractice insurance in case you need to make a claim.  You should never be embarrassed about asking for proof of malpractice insurance. They either have it or they don't. The ones who do have it understand that is just prudent business for you to ask for it before hiring them. The ones who don't have it get all huffy and defensive.

(2) Based on Rioprop v. BBVA Compass Bank (Alabama Court of Civil Appeals) as interpreted in the DDNK v. Needham decision (Circuit Court of Jefferson County and not binding on any other courts, but still provides insight into how judges think about these things), the failure to obtain possession within 3 years of the tax deed date is fatal, and means the former owner (the company) can get the property back and not pay you anything at all.  That is the decision in Rioprop. the DDNK decision expanded that, and said the tax deed date of three years after the tax sale applies to the State also. So, according to DDNK, if it's been more than six years since the auction, even if it was on the state inventory most of that time, the former owner (the company, in your case) can get it back and pay you nothing at all.

(3) Based on lots of Alabama Supreme Court decisions going back one hundred years all the way to the present, if the first owner's name (the individual) was on the tax notices and called off at the auction, but the company was the true owner by the time of the auction, then the tax sale was void. Same consequences as #1 above. The only exception is Jefferson County, that has a special law, passed in 1936, that protects it against a tax sale being void if the wrong name was used at auction.

(4) Many people recommend just barging in and changing the locks to take possession. That is legally very dangerous. Property that appears "abandoned" might be merely vacant for a long time and in bad shape. I have some YouTube videos that explain the difference, and the consequences if you guess wrong about a property being abandoned. Be sure to watch those.

Tai, I included you on this answer because you are a very good student of tax sale issues, and give other people good advice on Bigger Pockets.  If you did not already know the things above, I know you want to be aware of them and continue to give out your excellent advice.

@Jonathan Lin, every property is different. I need more information.

@Brittany Wilkerson I have some videos and posts about possession, especially about taking DIY possession without a court order. It can get tricky. Plus, now you have to worry about Equivest. Please search my posts for guidance.

ADOR is working on a solution for the problem with the long delays.  they can't ask for a budget increase and hire more people, because they aren't selling more properties than before.  Just a WHOLE LOT OF wholesalers requesting quotes on hundreds of properties, then requesting quotes on the same properties a couple of days later, and then doing it again. There used to be no limit on how many days they could do that. Now, at least, it's maxed out at 3 quotes for the same property and the same person. But, they get around that by having a friend request quotes on 3 different days. If two people request 3 quotes each on the same property, and if each quote eats up 20 days that someone has to decide to buy or not, that means the person (and their partner) can tie up a property for as long as 4 months while they hope to flip their price quote to someone who wants to buy the certificate or deed.  So, aside from the sheer volume, THAT adds to delays, also.  I suggested they charge a fee for each price quote. Even a small one like $10 gets too expensive for the wholesalers to engage in the kind of volume they are doing.  But, probably it should be closer to $50. if you buy the property, the $50 is used as a credit against purchase price. if you don't, then that money is gone. It was just my suggestion. I don't know what they are going to do.

I've been out of the loop on this thread.  In Alabama, if the deceased owner's name was listed in the auction, the tax sale was void. The exception is Jefferson County, which has a special statute passed in 1937 that protects it.  Jefferson County auctions with the wrong name are not void, as long as the parcel id number is correct and there is no other reason to be void, such as Equivest.  The Jefferson County safe harbor works for Birmingham and Bessemer Divisions, both.

@Jay Paul Jenkins, @Steve Morris, @Peter Walther, Alabama tax sales law is PHENOMENALLY complicated. There is no shortcut or easy answer to Jay Paul Jenkins' question. The advice I gave is the right advice. 

@Jay Paul Jenkins, because of peculiarities in Alabama tax sale law, and the large number of ways the tax sale might be void or someone might have extended redemption rights, or it might be recoverable for former owner of the short statute of limitations has expired, you will NOT be able to find a title company to insure title unless you've filed your quiet title lawsuit, obtained an order that is final and non-appealable, AND the title insurance company has reviewed the court file to make sure there were no jurisdictional defects that would void your quiet title order.  Especially now, in light of the June 26, 2020 Alabama Supreme Court decision in Equivest v. Stiff, basically declaring almost all prior tax sales void, you can't just call a title company and get title insurance.