Tax Deeds 101

Let me just take a moment to give a short “primer” on what one might do in the event they find themselves with a tax deed.  Let’s use as an example property, a tax deed property located at 6255 Crest Green Rd, Birmingham, AL 35212.

DISCLAIMER:  I am not an attorney and nothing that I say should be construed to be legal advice.

Here’s what I would do if I purchased a tax deed on the subject property (which happens to be a townhouse condominium):

1.  Record the tax deed with the Jefferson County Probate Judge.  This will probably cost less than $50.00.

2.  Take the recorded tax deed to the Jefferson County Tax Assessor’s Office and have the property assessed in my name (so I will get future tax notices).

3.  Call my insurance agent and get the property insured as a “rental” property.

4.  Order a title search, so I can find out (a) if there is a mortgage, (b) if there are other liens, such as condo association, sewer liens, etc and (c) find out what other “players” may be involved in the title history.

5.  Determine if the property is occupied by putting a letter on the front door or an obvious sign on the front making it easy for someone to call me if they have an issue.  If I don’t get any phone calls from tenants or owners, I go to #6 below.  If I do get a call from someone “claiming” to be a tenant or an owner, I engage my favorite attorney for help and do what he or she advises me to do.

6.  Contact the condo/homeowner’s association and let them know what I am doing in terms of attempting to take possession of the property and that I intend to pay up any legitimate liens.

7.  As the owner of a tax deed on this property, I have the legal right to the use and possession of the property.  I am going to take possession of the property (assuming no one is occupying the property).  I would change the door locks and secure the property, leaving my signage up the whole time.  I want to be very “public” and “visable” about what I am doing.

8.  Determine a budget to get the unit “rent-able”.

9.  Execute clean up and rehab efforts, being sure not to do anything other than what is absolutely necessary for repairs and restoration.

10.  Engage a local real estate management company to manage the rental property for me (of course I can do this myself if I want to).

11.  I am going to include in my lease agreement, a phrase that reads: “This property is a tax sale property (tax deed) and may be subject to redemption at any time.  In the event of a redemption, you may be required to move out.  You will be given as much notice as possible.”

12.  Take my rent checks to the bank!

Every situation is at least a little bit unique, but from my experience, the above scenario would not be unusual.



2 responses to “Tax Deeds 101”

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  1. Jeff says:

    Why would you not do a title search before you buy the tax deed to ensure you can afford to pay for any mortgage that is still owed?

    • Gary Boyd says:

      You can, however you only have 20 days from the date of the State’s notification to get payment back to them. Even if there is a mortgage you don’t necessarily have to pay it off. Most of the time in a case like that you can force them to pay you off if they want to “stay in the game”.