A tax deed sale is a public auction where the deed to a property is sold to the highest bidder in order to collect delinquent property taxes. Tax deed sales include properties located across the United States.

Are Tax Deed Sales Advertised?

Yes, tax deed sales are generally advertised in a newspaper where the property is located. The advertisement usually must be published for at least a month at weekly intervals prior to the auction. Tax deed sales information may also be available on the world wide web.

How Is the Title Obtained Through a Tax Deed Sale Recorded?

In most jurisdictions, title obtained through a tax deed sale is recorded through a “tax deed”. The tax deed provides written proof of the change of ownership when property is acquired through a tax sale. Tax deeds are a special form of quitclaim deeds, and are sometimes called “sheriff’s deeds.” If no sale was made at the auction, title will sometimes revert back to the county government. The tax deed is then recorded and maintained at the county register’s office for future title searches. 

Is the Title Obtained in a Tax Deed Sale a Marketable Title?

It is up to the purchaser to check the status of the title and to ensure that the title is a marketable. The property may have encumbrances such as liens, clouds of title, title defects, or other risks of litigation attached to it making it a non marketable title. This usually requires a thorough title search. The tax deed title contains no warranties regarding the property and the property is purchased as is.

Is There a Right to Redemption?

An owner or any other person that had a vested interest in property that was sold at a tax deed sale is entitled to the right of redemption. The right of redemption allows the owner or other person that had a vested interest to reacquire the property provided that certain regulations are followed. Right of redemption regulations vary depending on the jurisdiction where the property is located. Generally, the following requirements must be followed: 

  • Redemption must take place within a certain time after the sale, usually one year, or at any time before the right to redemption is foreclosed
  • Redemption requires repayment of:
    • The amount paid for the property at the tax sale
    • Any taxes paid on the property after the tax sale
    • A premium of all monies paid before the redemption – the premium is usually 10% to 20%

Foreclosing the Right to Redemption

A certain time after the tax deed sale, usually one year, the purchaser can prohibit the right to redemption by serving a notice of foreclosure as required by law. The requirements for terminating the right to redemption vary by jurisdiction.

Should I Contact a Real Estate Attorney?

Real estate law is very complex and varies depending on the state and locality where the property is located. A real estate attorney can help you understand the process of purchasing property through a tax deed sale, can complete a thorough title search before you bid on the property, can assist you in foreclosing the right of redemption, and can assist with any other problems or concerns that may arise during the purchase.