Winning The Highest Bid At A Tax Deed Sale?
Hi,
I was wandering if anyone is fimiliar with this process or should i say outcome. Do you get the property free and clear of all other leins and encumberences on the property such as a First or Second Mortgage? Does a Tax Lein wipe out all other leins? And If I were the winning bidder at a Tax deed sale would I be responsible for any lein or encumberence on that property or would the property then be owned Free and Clear? If anyone can help me I would really appreciate it thanks. :-?
[ Edited by myat on Date 11/13/2004 ][ Edited by myat on Date 11/13/2004 ]
Ask your county tax sale people and the County Attorney. Typically all mortgages, fixture, mechanics, etc. liens are wiped out and not your problem. Those lien holders were notified of the delinquency and default, and already had a chance to redeem the property themselves, but chose not to do it. IRS and state income tax liens could be a different story and the result isn't so clear; the IRS has a lot of power and may have a post-sale redemption period. I've never been able to get a clear answer on that. I've bought tax sale property with IRS liens and haven't had any problems yet, though.
Got curious, just did some more research about it online. The consensus is that the IRS has 120 days from the sale date (or the recording of the tax deed, or the notice of expiration of redemption, this part isn't clear) to redeem its interest. After that, the IRS is out of the picture like everyone else.
This can be used to your advantage at an auction. Here's a link to a story from a guy who used an IRS lien to his advantage and profited greatly from it. www.nyrental.com/foreclosures/taxliens.html (The story is almost at the bottom of the page, so scroll way down)
myat,
Was this county, state or a federal sale?
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