Tax Deed FAQ: “Am I responsible for the outstanding Association liens on a tax-deeded property in Florida?”

Not too long ago we spoke with an investor who had found the perfect condo going up for sale at an upcoming tax deed auction but had immediately lost interest once he discovered a large outstanding condo association lien was attached to it. He realized his mistake when we told him this:

 

The tax deed purchaser is NOT responsible for past Association liens and there is ample support for this in Florida Statutes.

The issue of tax deeds and Association liens has been heavily litigated in FL for years, but now it is pretty well settled law. Association statutes Chapter 718 & 720 impose liability for past due assessments in relation to property acquired by the transfer of title, however, a tax deed does not represent a transfer of title but the commencement of a new, original and paramount title.

 

The courts ruled in favor of the tax deed statue, as it is more specific in addressing the key issue of their survival or extinguishment after issuance of a tax deed and any conflict must be resolved in favor of the more specific statute.

 

The majority of the time when we see a tax deed purchaser have an issue it is due to human error in recording an Association claim of Lien for past due amounts AFTER the tax deed sale or the Association simply forgot to tell their attorney the property had been sold at a tax deed auction so they continue to try and collect the debt they believe they are owed. To catch these mistakes check the dates that they are claiming for assessments and other back due amounts.

 

You are only responsible for the Association dues from the tax deed sale moving forward.

 

Our attorneys at Cleartosell have formatted a standard letter for our clients when an Association makes an improper claim for amount due. If you would like a copy of this template please give us a call or email us at info@cleartosell.com and mention this blog post.

 

Click here to watch a short presentation where our Senior Staff Attorney, Megan Schmidt breaks down this topic with examples supporting case law.

August 15, 2017

Posted In: Attorneys, Investing, Tax-Deed

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Do Properties Purchased off the List of Lands Come Free and Clear of Liens?

Some of the more common questions we receive from tax deed investors involve the list of lands and escheatment tax deeds. In this post we breakdown what the investor needs to know about purchasing tax deeds from the list of lands.

 

What is the List of Lands?

If there are no bidders at the public sale for the tax deed, the certificate holder is given the option to pay the remaining balance and take ownership of the property or pay the costs to re-list the property at a subsequent auction.

If the certificate holder neglects to do either within 30 days after the original public auction, the Clerk will add the property to a list entitled “lands available for taxes.” These properties can be purchased “over the counter” for the minimum bid advertised by the Clerk.

 

What about the liens?

If a property is purchased off the list of lands, the same rules apply as if the property had been sold at auction, as far as lien survival. In general, the majority of liens and interests such as mortgages and judgments are extinguished by the tax deed sale, but the county and municipal liens remain. Any easement and covenants that run with the land also stay attached, just as if the property was purchased at auction.

 

What is an Escheatment tax deed?

After the property has sat on the list of lands for at least three years from the date of the original public auction, the land will escheat to the county free and clear. The Clerk will execute an escheatment tax deed to the Board of County Commissioners and liens of any nature will be deemed canceled as matter of law. Easements and covenants that run with the land will still remain attached.

Purchasing the escheatment tax deed is the only way we have seen to extinguish the existing governmental interests by operation of the sale itself.

 

At Clear to Sell, we are continually developing unique ways to save tax deed investors like you both time and money. If this information has been useful, please visit our YouTube channel to see our principal attorney address this topic in an episode of our educational video series: Tax Deed Law Made Simple

July 26, 2017

Posted In: Attorneys, Auctions, Investing, Tax-Deed

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Know your Tax Deed statutes! Statute of Limitations Pt. 1

Florida tax deed investors are fortunate in that the statutes surrounding tax deeds tend to provide an abundance of protection for the tax deed purchaser. One example of this is Statute 95.192, which states that after the new tax deed owner has been in possession of the property for four years prior owners cannot come forward to challenge the tax deed sale.

Based on this statute, many underwriters are willing to produce a title commitment for the tax deed property that is past the four-year statute without a quiet title action or Cleartosell title certification process being required. This is however not always the case. There may be special circumstances where a quiet title or certification is still needed and will be addressed in part 2 of this blog to come.

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Some title agents or attorneys will simply advise their tax deed investor clients to proceed with a certification process in an abundance of caution and assurance.

While challenges to the sale can no longer be made, other title defects might exist that can prevent immediate insurability such as conveyance errors in the chain of title, incorrect legal descriptions, or liens that have not been properly released.

Using a title certification service like CTS gives tax deed investors assurance that they can sell the property, and what encumbrances they have to deal with prior to receiving insurable title. In the past, Cleartosell’s attorneys have even been able to work with the client and our underwriters to have issues corrected that are outside our scope of certification of the tax deed sale.

If you own a tax deed that is outside the four-year statute you should consider consulting with a licensed title agent or real estate attorney for the best course of action. Book a complimentary 15-minute consultation with one of our attorneys today!

January 23, 2017

Posted In: Attorneys, Tax-Deed


Cleartosell Has Its Say!

Cleartosell has had the fortunate opportunity to attend several tax sale industry related events this year resulting in positive experiences all around. Our principal attorney, Paul A Krasker, and our senior staff attorney Megan F Schmidt recently had the pleasure of giving a presentation on two of these occasions.

Our attorneys shared their experiences at both a Boca Real Estate Investors Club (BRIC) meeting and a NTLA Tax Deed Investment Group meeting in Washington DC.

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The attendees at the BRIC meeting were predominantly local real estate investors. The presentation was geared toward Tax Deed/Lien investing 101 education for new or aspiring investors in the tax sale industry.

Paul Krasker said “We covered a variety of educational topics such as Foreclosures vs. tax deeds and why tax deeds are a safer investment based on Florida statutes, obtaining title insurance, the benefit of CTS certification vs. QTA, what to expect at your first auction, and other useful topics for investors new to the tax deed industry. The audience seemed to really pick up on several main areas that interested them.”

Megan Schmidt covered the specifics of the cleartosell service, whilst Paul went on to discuss Tax deeds as an investment in general and clarified the difference between the judicial process of a QTA and our TD certification service.

Questions from the attendees such as the general cost to get started in the tax deed investing business, the risks involved, and how to make their first steps in the right direction made it clear there was considerable interest.

The BRIC meeting happened to fall back-to-back with another event where Paul Krasker traveled to Washington DC to present in front of the NTLA Tax Deed Investor Group, which he chairs.

Paul says, “The purpose of this meeting was to discuss and establish best practice standards for tax deed and tax lien investing through education and thought leadership.”

Although tax sale investing helps to improve communities by eliminating blight and increasing the tax base, it still carries some negative reputations around the consequence of homelessness that can arise. Efforts to continually improve standards in the industry could help extinguish this negativity.

Paul continued “The general discussion of the subcommittee was focused around ideas on developing pre-sale and post-sale best practices for assisting the existing property owners, the tax deed bidders, and then the new tax deed purchaser to ensure investors understand the process and adhere to a high standard of action.”

Paul concluded by saying “it was very helpful to obtain feedback from NTLA board members and other participants of the Investor Group subcommittee. “

The juxtaposition of these two events made attending them back-to-back an interesting and somewhat enlightening experience. It was a privilege to be able to speak to each end of the investor spectrum and be given the opportunity to provide knowledge to both individual investors at a local level, and to NTLA board members working to make positive changes in the industry on a national level.

Cleartosell looks forward to supporting more tax sale industry events in the New Year. If you or someone you know is planning an event that you think our attorneys may be able to contribute as speakers, please contact us to discuss the opportunity.

December 23, 2016

Posted In: Attorneys, Tax-Deed