Michigan Tax Deed Sale...question
I'm going to a property tax auction in a couple of weeks. I've been researching a house that I'm interested in buying. I've found the notice that the state sent to the owner It said..... "I hereby certify that on 3/1/04 the following real property was forfeited to the county treasurer for non payment of real property tax year 2002. This property will be titled absolutely in the name of XXX county, if not redeemed before the March 31 immediately succeding the entry in an uncontested case of a judgement foreclosing the property under xxxx or in a contested case, 21 days after the entry of a judgement foreclosing the property under xxx.
On March 30th the owner of this property did a quit claim deed to a relative of some kind (person had the same last name as him....it listed that he was a single man, so it's not his wife). He did a quit claim deed for the sum of $1.00 This new person did not pay the taxes......this property is scheduled to go to auction in about 10 days. Do you think this was a last ditch attempt to save his property? Could it cause problems with the title?
Any advise would be appreciated
heather0707--(MI)------------------
I can only speculate. Perhaps he did not want to on title when then tax sale takes place, fearing the effect on his credit history.
Perhaps he thought that the other person would pay the taxes, but that person did not do so.
If there are not other liens on the property, you might consider approaching the current title holder and see if you can get a deed to the property for a low price. At tax sales, the good quality properties tend to get bid up in price.
Good Investing************Ron Starr************
Yes, this is the Detroit Auction.....
You had mentioned approaching the owner and trying to get the deed. The owner is now the State of Mi because he didn't pay his taxes. The State foreclosed on the property and it's going to the auction block in September. From my understanding, there will be no liens on this property when the state takes over, they all drop off, except IRS liens. Those stay with the property.
That's what I'm afraid of though, is the property getting bid up at the auction. Has anyone attended the Detroit property tax foreclosure auction before????
Ron....do you think the State of Michigan would still allow him to pay his taxes and get his property back? If this were the case, then approaching him might be worth it.....let me know what you think
The deed holder cannot take absolute possession of the property until he/she has complied with the provisions of Section 140 to 143 inclusive of Act 206 of Public Acts of 1893, as amended, being Section 211.140 thru 211.143 of the Michigan Compiled Laws.
The purchaser must, if he/she wishes to protect their original purchase, make purchases at subsequent tax sales until he/she has completed title. After acquiring title to the property, the purchaser should immediately pay all delinquent taxes to date.
A writ of assistance or other process for the possession of land the title to which was obtained by or through a tax sale, shall not be issued until six months after there is filed with the County Treasurer of the county where the land is situated, a return by the sheriff of that county showing service of the notice prescribed in MCL Section 211.140 (2).
Some keys in making A Michigan
Tax Lien Buyer 1. Surrenders original copy of purchase certificate to Local Property Services Division. Local Property Services Division 2. Prepares tax deed and forwards to taxbuyer.
1: A tax deed cannot be issued until one year following the annual tax sale.
2: A tax deed is valid for only five years from the date it can first be issued.
"Improved Residential Parcel" means a parcel of land which contains a dwelling suitable for occupancy.
Tax Lien Buyer Determines the following:
A. The last grantee(s) in the regular chain of title to the land or of an interest in the land according to the records.
B. The person(s) in actual open possession of the land.
C. The grantee(s) under recorded tax deed for the latest year's taxes
D. The mortgagee(s) named in all undischarged, recorded, mortgages, or any assignee(s) thereof.
E. The holder of record of all undischarged recorded liens.
F. If the property is improved residential.
Tax Lien Buyer: If a person is incompetent, notice is served on his/her trustee or guardian.
If a person is deceased, notice is served on the executor, trustee, or administrator of his/her estate, or on his/her heirs.
Completes Service of Notice substantially in the form set forth in this section and forwards to county sheriff.
If the property is improved residential, the notice must contain the statement: "This parcel is an improved residential parcel." Failure to include this statement invalidates the notice.
Service of Notice forms may be obtained at various stationery stores and printing companies.
Delivers Service of Notice to sheriff of the county in which person(s) determined in Step 3 resides and requests that he/she serve notice on them.
SERVICE OF NOTICE AND SUBSTITUTED NOTICE
Sheriff or Deputy Sheriff 6. Enters time and date Service of Notice was delivered to him/her on same.
Serves notice on person(s) determined in Step 3 and returns a copy of the notice to the tax lien buyer with the Proof of Service of Notice.
Service may be made by leaving the notice at that persons place of residence with a member of that person's family of mature age.
If person(s) to be served resides out of state, sheriff serves notice by certified mail, return receipt requested.
Files notice and sheriff's Proof of Service with the County Treasurer.
A fee of 50 cents is charged for filing each Proof of Service of Notice or "substituted service."
The six month redemption period commences on the date the notice is filed with the County Treasurer.
IN THE EVENT THE SHERIFF CANNOT SERVE NOTICE (STEP 7) FOLLOW STEPS 9 AND 10.
Sheriff or Deputy Sheriff 9. Completes Return of Failure of Service and gives to tax lien buyer.
Tax Lien Buyer 10. Causes "substituted service of notice" to be published in a newspaper.
NOTE 12: Newspaper must be published and circulated in the county where the land is located. If no such newspaper exists, publication is made in a newspaper published and circulated in an adjoining county.
NOTE 13: Publication must be made once a week for four consecutive weeks.
11. Files Proof of Publication, by affidavit of printer or publisher of the newspaper, together with the sheriff's return of Failure of Service, with the County Treasurer.
NOTE 14: If the property is an improved residential property, an extra copy must be filed with the County Treasurer.
NOTE 15: Persons with a redeemable interest have six months to redeem following the filing of the proof of service of notice or "substituted service."
IMPROVED RESIDENTIAL PROPERTY
County Treasurer 12. Forwards copy of Proof of Service of Notice to County Department of Social Services for investigation.
SERVICE OF NOTICE ON CORPORATIONS (STEP #13)
Sheriff or Deputy Sheriff 13. Serves notice on one of the following where the corporation maintains its principal or registered office for the transaction of business in this State as indicated by the articles of incorporation:
A. President
B. Secretary
C. Treasurer
D. Resident agent of corporation,
E. or, person in charge of office.
NOTE 16: If the president's, secretary's, treasurer's, or general agent's office cannot be located, follow Steps 9 and 10.
Sheriff or Deputy Sheriff NOTE 17: This section's provision applies to corporations to whose term of existence has expired as well as to those that the term of existence has not expired.
NOTE 18: Notice on foreign corporations may be served on registered agent in the county in which its registered office is located, or by certified mail addressed to the corporation at its home office.
Persons with a Redeemable Interest 14. Deposits amount necessary to redeem taxes interest with the County Treasurer.
NOTE 19: Tax lien buyer is required to notify the treasurer of the personal or substituted service fees.
NOTE 20: Personal or substituted service fees shall be the same as provided for service of subpoenas, for orders of publication, or for the cost of service by certified mail.
Persons with a Redeemable Interest NOTE 21: The amount necessary to redeem at this point includes:
A. The amount paid to purchase the lien plus 50%.
B. Personal or substituted service fees.
NOTE 22: The amount necessary to redeem prior to service of notice includes:
A. The amount paid to purchase the lien plus 50%.
NOTE 23: The person(s) redeeming the taxes does not acquire any greater interest in the property beyond that which he/she already had.
County Treasurer 15. Notifies tax lien buyer that the amount necessary to redeem the taxes has been deposited.
Tax Lien Buyer 16. Executes a release and quit-claim and gives to County Treasurer along with any other papers that pertain to the tax lien involved.
NOTE 24: Other papers shall include any or all of the following if appropriate:
A. The tax deed.
B. The purchase certificate.
C. The tax receipts.
D. Any other conveyance relating to tax lien or tax interest.
Tax Lien Buyer NOTE 25: The above papers must be surrendered by the tax lien buyer before he/she is entitled to receive the redemption money.
County Treasurer 17. Pays the tax lien buyer the redemption money.
18. Forwards items received in Step 16 to the person(s) that redeemed the taxes.
Person(s) Redeeming Taxes
19. Records release and quit-claim at Register of Deeds Office.
NOTE 26: The Register of Deeds is entitled to the same fees as provided by law for recording deeds of conveyance and other instruments.
PROCEDURE FOR CONVEYANCE TO TAX LIEN BUYER (SEE STEPS 1 - 13)
County Treasurer 20. After six months redemption expires and at request of tax lien buyer, prepares certified copy of Service of Notice.
NOTE 27: The County Treasurer is entitled to the fees as provided by law for preparing the certified copy.
21. Collects recording fee and transmits Service of Notice and Proof of Service of Notice and/or "substituted service" to Register of Deeds Office.
NOTE 28: A 50 cent fee is provided for transmitting the Service of Notice and Proof of Service of Notice, or "substituted service" to the Register of Deeds Office.
22. Records Service of Notice and Proof of Service of Notice, or "substituted service.
NOTE 29: The Register of Deeds is entitled to the same fees as provided by law for recording deeds of conveyance and other instruments.
NOTE 30: The recording of the Service of Notice, Proof of Service of Notice, or if substituted service", and tax deed, is prima facie evidence of the purchaser's title enabling him to seek a writ of assistance from the Circuit Court.
Tax Lien Buyer 23. Records tax deed when originally received, or when the Service of Notice and Proof of Service of Notice, or "substituted service" are recorded.
Tax Lien Buyer NOTE 31: If is recommended that all remaining taxes be paid. Failure of the person(s) with a redeemable interest (Step 3) to redeem the taxes within the six months redemption period, bars them from questioning the validity of the tax title or tax deed.
The Local Property Services Division, Michigan Department of Treasury, recommends that the preceding procedure be followed.
Heather0707--(MI)------------------
You have asked a very significant question. I have not studied the statutes of Michigan related to collection of delinquent property taxes, so I cannot answer your question.
From the processes in CA,OR, WA, and other states, for which I do know the way things are done, I would say probably so. The government people do not like to cause people to lose their properties. They foreclose only as the ultimate weapon to force payment of taxes.
You need to study the law to see. If the owner can still pay the taxes and prevent the tax sale, then you could do as I suggest: approach the person who is currently on title. Be sure that you check the title before you buy, so that you don't end up owing on some huge mortgage once you are the owner.
Good Investing and Good Investigating****************Ron Starr*************