By Logan C. Stone
After leaving a non-judicial tax sale with a tax sale deed in hand, you might think you own the recently-purchased property outright. However, the law regarding tax sales is not that simple. Even after a tax sale, the defaulting owner still has the right to redeem the property from you. This article explains the necessary steps you need to take to protect your interest and ultimately bar the right of redemption.
Local governments are funded by property taxes, thus when residents or property owners fail or otherwise refuse to pay state, county, or municipal taxes, county tax commissioners are tasked with collecting the unpaid taxes owed from individuals and businesses.
Occasionally, collection of delinquent taxes is accomplished through a process called a tax sale.
A tax sale can be either "judicial," meaning the sale process involves the court system, or "non-judicial," meaning the process operates outside of the court system. This article discusses the dynamics of a non-judicial tax sale.
Unlike other similar auction processes, the highest bidder at a tax sale must undertake a process to protect its interest in the property, and this process is called "foreclosing" or "barring" the right of redemption.
After real property is sold at a tax sale, the owner or any party having an interest in the property may "redeem" the property from the holder of the tax sale deed.In order to exercise this "right of redemption", a party must pay the amount provided in O.C.G.A. § 48-4-42 at any time within 12 months from the date of sale or at any time after the sale until the right to redeem is foreclosed by the giving of the notice provided for in O.C.G.A. § 48-4-45.
Pursuant to O.C.G.A. § 48-4-45, after 12 months from the tax sale, the purchaser (or the purchaser's heirs, successors, or assigns) may terminate, foreclose, or forever bar the right to redeem the property subject to the tax sale by causing notice of such intent to be served upon (1) the defendant in the tax sale; (2) the occupant, if any, of the property; and (3) all persons who have any right, title, interest, or lien of record upon the property in the county in which the land is located.If any of the people enumerated in (1)-(3) reside outside the county in which the property is located and the address of such person is reasonably ascertainable, notice must be sent to them by registered or certified mail, or statutory overnight delivery.
Generally, title to property bought at a tax sale is considered clouded. A clouded title can cause complications when a new owner attempts to sell or finance the property. Accordingly, undertaking a quiet title action (QTA) is advisable. A QTA simply seeks a court's declaration that the new owner owns the real property free and clear.Logan C. Stone is an associate attorney with Flint, Connolly & Walker, LLP currently representing clients on various civil matters, property-related disputes, and associated litigation. The attorneys at Flint, Connolly & Walker, LLP have the experience and knowledge to protect your interests whether in an adverse or transactional setting.