Property tax liens are the highest order…they will wipe off everything that is junior including deeds of trust, etc.
However: Other property tax liens will remain. Like if you purchase from the county at a tax deed sale and there is a city tax lien for lot clean up, etc. It will remain. All of the local governments want their piece of the pie.
I’m interested in buying property at a tax deed sale in Florida. The properties that I’m looking into all have liens against them. I’ve read that only government liens stay and all other liens are dropped-is this true? If I’m the winning bidder, I know that after the fees are paid, I own the property. I heard that majority of the time on deals like this, a quiet title suit is needed in order to obtain a clean title-does this have to do with the previous liens? Any help is greatly appreciated.
What is coming up shortly, at least here in Bay County, is what’s called tax certificate sales. At these sales, you actually pay the property tax for a property and get a tax certificate from the county. The owner may (probably) will pay off that certificate and you’ll get your money back plus the interest rate you bid at the sale (max 18%). There is only a small percentage of properties that are actually acquired this way (1-2%??)
If, after TWO years, you haven’t been paid, you can file for a tax deed for that property. After a few other things the county must then do (talk to your property tax department for details), you may eventually get your property. Keep in mind that your certificate expires and you’ll lose your money if you wait past 7 years. Also, there may be other tax certificates ahead of yours that must also be paid off before you get the property, or they’ll pay you off so they can get the property.
Rich is absolutely correct. One thing which should be clarified a bit more is tht in Florida you bid the interest down. It starts at a maximum of 18 percent and if you are willing to take less you bid it down until it gets sold…18 percent is not always there.
And: more importantly as Rich says…probably 99 Percent of them will be redeemed…so all you get is interest, based on what you were willing to accept.
I’ve been buying tax liens for some time now. I can honestly tell you that they hype you see on late night TV is just that…sales hype. Yes, you can get an occasional good property…rarely though. You can get crack houses, vacant contaminated lots, unbuildable, unusable lots… BUT; the chances of getting the houses you see on TV are very rare.
Thank you Bill and Rich for the advice. What I was looking for was the answer about liens held against the property at a Tax Deed Sale not a tax certificate. I understand that after one purchases the certificate, 2 years later he or she has the opportunity to send it to the tax deed auction. To answer my question, only government liens against the property survive the tax deed. Thanks again.
Sorry, about the incomplete answer. The only thing that will survive the tax lien sale is other liens from the city, county or state, etc.
Example. You purchase a property at a TAX DEED SALE, not a tax certificate sale…the only other liens you have to worry with are like some I get occastionally where the city or state has gone in and torn down the crack house or cleaned the vacant lot, etc. These liens will survive.
In most states the party that owns the property has from a few months to several years to redeem. In a TAX DEED State if they fail to redeem you get a deed from the state…it is yours then.
Bill, I haven’t looked into these things in detail so I’m not sure of ALL the specifics. Question for you…you mentioned that some of the other liens that may remain include those from the city, county, and state. Do federal liens also remain (i.e., IRS liens)? I was pretty sure about the local liens but have no clue about the others. Thx.