Posted by Kristine-CA on February 13, 2008 at 14:41:37:
Hi Bill. I was just looking at the auction site today and that same
caveat is still there: some special assessments may remain after tax
sale.
I don’t think of it as the municipality not participating in the sale. In
my county it appears to be a timing thing with the liens and when
those liens become special assessments on the county property tax
bill. Once a recorded municipal lein moves to the county tax bill, it is
included in the total amount due and the min. bid for tax sale…so it
gets paid in full.
But if it’s a lein that was recorded 6 months ago and it not part of the
tax bill? I know tax sale investors who have gotten stuck with those.
Posted by Sara_CA on February 12, 2008 at 19:46:54:
If I bid on a property at the County Tax Sale in California, I can ignore ALL liens, i.e.: judgment liens, mortgage liens, HOA liens, and mechanics liens. ALL EXCEPT IRS LIENS are wiped out. Is this correct???
What if I want to bid on a commercial property at the County Tax Sale? All the above-mentioned liens are also wiped out. Is this correct??? ONLY the former ownerâ??s personal IRS lien, AND his business IRS lien, stays, right???
What are the ways I can find out if a property has IRS liens against it? I can ask my title company to do a prelim, and I can search at the county recorders office. Is there a third way?
Thanks for any and all help from the experts. Thanks for the privilege to learn from this site.
Posted by Sara_CA on February 12, 2008 at 21:52:53:
Thanks Bill H. and Kristine-CA for the great advice. I will do homework, and homework, and homework, before I bid.
I don’t like internet bidding, so I will skip Kern County.
Thanks again.
Posted by Kristine-CA on February 12, 2008 at 20:23:42:
One of things that doesn’t get wiped out in CA is special assessments
that may have not yet posted/attached to the property tax bill. Say the
city or county is doing abatements (clean-up or demo) and but have
not yet filed a lien. That will not be wiped out at tax sale. It stays
against the property as a lein once filed, then eventually moves to a
special assessment on the property tax bill.
The IRS has a right of redemption for 120 days. So, if you buy the
property and the IRS wants it back they have 120 days to overturn the
sale. They give you get your money and I think 6% interest.
Be advised that tax sale property in CA does not qualify for title
insurance for 1 year. This is because there is a 1 year period where the
owner can make a claim that the sale was invalid. So if you have any
plans for re-sale, re-fi or contruction that require lender financing in
the first year after purchase, this is definitely an issue. That being
said, you may able to use a special tax title insurance company for
higher fees. Try taxtitleservices.com.
Are you planning on bidding in the upcoming Kern county sale?
Kristine
Kristine has it right, but just so you understand. Say the county is selling the property for the taxes and the city DOES NOT participate in the sale. This is quite possible and happens a LOT.
Therefore any liens that the city places against the property will survive the county tax sale and become your responsibility.
Posted by Kristine-CA on February 12, 2008 at 21:28:24:
Hi Bill. Where I am the whole city lien/county taxes thing is confusing
and inconsistent for everyone, even title and escrow. The city liens do
survive tax sale. But the city liens become part of the county tax bill
(as a special assessment) within a year or two. Trouble is that the city
doesn’t release the lien after it becomes part of the tax bill. So it is
showing up in two places: the recorded lien AND the tax bill.
I’ve worked on lots of properties with multiple liens from multiple
years. And each time the title people and I have to go back and forth
between city and county, to figure out which liens are already in the
tax bill and which ones need to be paid directly to the city. Not a good
system. Not a system, actually.
This applies to tax sale due diligence as well in CA, especially for
properties in city limits that are aggressive about abatements. Many of
the city liens will already be in the county property tax bill and will be
extinguished/paid as part of the tax sale. It just takes lots of patience
with the municipal employees to sort it out. Kristine
I’m not too quick to agree with Bill (just yet) although Bill is one of the more knowledgable people on the subject.
I believe that in CA, we have a system whereby liens of various agencies become “superpriority liens.” Not all agency liens achieve this status and, frankly, I’m not certain why some do and some don’t, however, I can tell you that not all municipal liens become superpriority liens along with the balance of other property taxes.
If I were so motivated, I’d pull out the Beck CA property tax “bible” and do more research, however in the big picture, it’s never been a deal killer at the price-points that I acquire properties (often 10-15% LTV…and yes, in the So Cal metro area).
Maybe Bill will thump his own tax bible and set the record straight (at least for CA) once and for all.
Posted by Bill H on February 13, 2008 at 15:47:36:
Hey Rick:
Do you remember when John Beck used to hold his seminar things in the Viking Hotel on Aviation and Century Blvd in West Los Angeles…in the basement no less.
How about when he, Joe Land, Alan Hoffman and some of the others were up in the TV studio in Thousand Oaks and Hoffman was hungry (seems he was always on a diet) and Joe Land came up with the idea for his “Subliminal Motivation” seminars.
Met Joe later in Tacoma, WA and he was bemoaning the fact tht he had made all the $$$ and almost lost his family, hardly knew his kids, etc. Really nice guy in a sad situation.
Posted by Bill H on February 13, 2008 at 13:52:54:
Hi Rick:
Good to see you here again. You know, you may be right. The last time I looked at this was about 3 years ago in one of the San Bernardino County Tax Sales on-line.
The Instructions for bidding gave a specific caveat that some of the municipalities did not participate in the county tax sale and their liens would remain and have to be taken care of.
Laws change and it is probably now as Kristine said, they make them an assessment and wait until you try to clear title and then collect the $$$.
As time permits I will check it out and see what the current deal is.
Same there as everywhere…cities and counties are BROKE and trying to figure how to extract the maximun $$$ for their efforts.
Hey, Bill. I never met Joe Land but I do remember Tony Hoffman very well. He hung around people like Wayne “Do I have to go to prison?” Phillips.
You may already know this, but Tony was the “Brains” behinds the original O.J. tapes and he was expecting to make millions. I don’t think it quite turned out that way. I had heard some years ago that he had suffered with some serious heart problems.
Anyway, people like Tony, Wayne and others turned me off to going to real estate seminars for many, many years and that was a shame. I mostly attended legal conferences for the next 20 + years plus the occassional John Beck event. It wasn’t until I met the likes of Ward Hanigan, Jack Miller, Peter Fortunato and Mike Cantu that I found solid material and good investing advise. All well worth the time and money.
I worked for Wayne after he got popped by the FTC. Apparently he was supposed to cease and desist the government loan racket, but he basically fled Arizona and set up shop in California. He made stupid money doing the seminars , selling worthless books promising riches beyond your dreams….. dreams that were soiled by greed. Those books and tape sets that he hocked for 50 bucks were made on janky copiers. He paid us commission, and we figured out how to finagle and manipulate how we could scam the scammer. He sucked to work for for the most part, smelled bad most days, but he was gifted at manipulating and scamming people out of their money