QUESTION

Question regarding quiet title process and tax lien sales? Please see additional information

Asked on Jul 15th, 2011 on Real Estate - Alabama
More details to this question:
I've located multiple properties on our counties tax delinquent list that I would like to purchase. Southside Community Development Corporation v Jeffrey White provides some precedent on the short statutory time limit for filing for the quiet title (basically 3 years after the purchaser acquires the title lien from the state regardless of when the property went delinquent. I want to purchase 2 condos that have been delinquent and will mature in May2012 but are currently owned by a bank; My questions are how do I show intent to take possession if it is currently rented or even vacant? can i make a case for receving the rent money from any rental agreement after the May2012 deadline? Must i continue to pay taxes for the 3 years in which i am trying to establish acts of possession, in addition to the 3 years delinquent taxes I've paid? If i must pay these taxes/hoa's/homeowners insurance for an additonal three years will i be reimbursed at the 12% set by the state if owner comes forward?
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1 ANSWER

Real Estate Law Attorney serving Anniston, AL at Isom Stanko & Senter, LLC
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The laws regarding tax sales and redemption are complex and sometimes vague.  Little litigation has occurred in this field because people who cannot afford to pay their taxes seldom have the resources to fund litigation when they feel they have suffered loss improperly.  In general, one should not expect to obtain good and insurable title to valuable real property through a tax deed.  The realistic expectation should be limited to recovering a nice return of interest when the property is ultimately redeemed because it almost always is redeemed.  Now that I have hopefully moderated your expectations, let me try to answer your questions: Your "facts" are not altogether clear but I think I understand that you have already bid the condo property in at a tax sale and that the 3 year wait period will expire in 2012, and that legal title is in a bank.  I will assume also that the bank is collecting the rent from the condo units.  Your questions are: 1. How do you get possession?  You would ordinarily make a written demand that those in possession vacate by a specified time - and your notice must be in compliance with the State's laws pertaining to evictions.  Here you have a unique situation where the bank is in possession through tenants.  I think you probably don't want to oust the tenants but rather to step into the bank's shoes.  So your demand letter would properly be directed to the bank -- which will certainly oppose your efforts. 2.Can you get the rent money?  Well, if you succeed in wresting "possession" from the bank, you could.  But I don't think you will succeed in wresting possession from the bank.  Another feature of the redemption laws is that the 3 year redemption period does not apply where the owner is in possession.  The owner's right to redeem will continue on, as I understand it, indefinitely so long as the owner remains in possession.  And again, the owner need not personally occupy the property.  Possession can be through tenants. 3. Must you continue to pay the taxes, insurance, etc, and will you ever be reimbursed?  If you do not continue to pay the taxes, there will be another tax sale and someone else will become the owner of a tax deed but will meet the same obstacles that you have.  I think you will ultimately be able to recover your taxes and your "necessary expenses" along with interest.  There may be controversy over what expenses are really necessary expenses.  Bottom line, I think you should be content with the interest income you will get from this "investment".  Perhaps the best way to get the bank's attention and bring the entire matter to a head is to make a demand on the bank for possession.  I recommend that you confer with a competent real estate attorney who has experience with foreclosure/tax sale/redemption procedures.  Not all real estate attorneys have such experience.
Answered on Nov 17th, 2011 at 5:12 PM

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