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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