I am considering purchasing a property that was taken due to failure to pay property taxes.?

Every state has it's own way of handling delinquent property taxes. You'll need to contact the local tax collector's office for information on how your state handled them.

In some states you don't buy the property but the right to collect the unpaid taxes, plus interest at a rate set by state law. The period varies from a few months to several years. During this time, the title to the property remains with the property owner. If the owner fails to pay the tax debt that you now own by the deadline set in state law, you must foreclose on the property to take possession. You will bear the costs of the foreclosure and eviction. You may or may not be able to recover the costs of the foreclosure and eviction; that's normally limited to when the total amount that they owe you exceeds the market value of the property. Of course in that case you probably would not have bought the tax lien in the first place!

In other states, the local tax collector auctions off the property for whatever they can get and the winner takes title to the property and can evict the former owner if they wish. However the former owner retains a right of redemption for a specified period of time, again that can run from a few months to several years. During the redemption period, a cloud remains on the title that protects the former owner's right of redemption. The amount that the former owner would need to pay usually includes interest at a rate set by state law as well as an amount to defer the new owner's costs. If the former owner redeems the property within the redemption period, they recover title to the property and you must vacate, usually within 30 to 60 days or so. If the don't redeem the property within the redemption period, you can have the cloud on the title removed at which point you would acquire clear title to the property, subject to any other pre-existing liens of course.

Finally, in the remainder of states, the tax sale is an absolute transfer of the right of ownership. The tax collector issues a quitclaim deed to the winner and the winner evicts the former owner and takes posession of the property.

Bear in mind that when you acquire title to a property through a tax sale you ONLY receive a quitclaim deed to the property. That title does not provide any warranty of clear title and any pre-existing liens may remain in full force though there usually are exceptions for mortgage lenders in some states, the presumption being that the lender would bid at the tax sale to protect their interest. It is essential that you review the title carefully to ensure that you receive the unrestricted right of title to the property.

Depends on the state as to the veracity of the statement. I'd recommend consulting either your tax office or a real estate attorney. While I've written 2 real estate books, I'd strongly recommend that you consult locally. These answers vary strongly by state. I'd recommend you pay close attention to the condition of the property and the cost of rehab (if there is any); the final factor is the previous owners. I've seen some previous owners come back and break in. Sad but it happens. Take your time and do a 360-degree analysis.

Christopher Dixon

www.leroybrownbooks.com

If the sheriffs office, or those in charge of the sale told you the old owners can come back and get it back within 5 years, that would be the law. If it was not them, check with them. In Philadelphia, the time period used to be 2 years, but after too many problems with people buying and fixing these houses, the time was lowered to 6 months, and the old owners also had to repay any money you spent on fixing the house. But, it really does vary from city to city.

If it is sold for back taxes, the owner lost rights to it. No way you can have it taken from you if you have paid the back taxes that they couldn't (and the reason they lost it).