Tax Deed Vesting – How It Can Cost You Big Time..

Improper tax deed vesting (the legal assignment of title and ownership of a property) is a common mistake. Scenarios can include everything from invalid LLC’s to misspelled names. Take a few minutes to save yourself thousands of dollars in legal fees and months of time by getting this right from the start!

First, if the clerk issues a wrongly assigned deed due to their error, then you can likely amend this with a Corrective Deed. Check out more about scrivener’s errors and how to deal with them here!

More complicated situations arise when a Corrective Deed can’t be issued. If you’re vesting a property in the name of an entity such as your LLC or Trust (as we recommend here), be doubly sure that you’re using the same entity name as is registered with their respective State. Moreover, check that the entity is valid and current with registration at time of vesting.

Similarly, if you’re purchasing the property via Quit Claim Deed, be sure that the selling entity is valid with its respective State (Sunbiz records cover Florida) at the time of sale. Even further, make sure that this is the same entity that bought it in the transaction prior. Running afoul of any of these scenarios can lead to the deed being invalid, or even belonging to an entirely different entity than your own!

When bidding online, make sure that the name given on your account is exactly that of the entity in which you’d like to vest the property, and include the state of incorporation.  For example, you should register as “ABC Tax Deed Investment Company, a Florida Corporation” or ABC Tax Deed Investments, LLC, A Delaware limited liability company”. The winning bidder will have this name automatically applied to the deed, so be prepared in advance!

If there is an error, you may need to file a Quiet Title Action or Declaratory Action, which is a lawsuit filed so a judge can sign an order correcting the error and putting the property back into your correct entity name.

Again, make sure you’re approaching every vesting cautiously so that you don’t wind up in trouble because of a simple oversight. Double check now so you’re not writing checks later!

At Cleartosell, we are continually developing unique ways to save tax deed investors both time and money. Visit our Cleartosell YouTube channel to see our principal attorney address related topics of interest in our ongoing educational video series!

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June 15, 2018

Posted In: Attorneys, Tax-Deed

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