Tax Deed Sale Process Q & A

tax deed process

Tax Deed Sale Process and Related Information
Common Questions and Answers- Susan P. Bakalar, Esq.

What is a Tax Deed Sale? Property owners are required to pay property taxes on an annual basis to the County Tax Collector. If the owner does not pay his/her taxes, in June of the following year a tax certificate will be sold by the Tax Collector. Generally, if the tax certificate has not been redeemed within two years, the holder of the certificate can apply to force a public auction of the property. This auction is referred to as a “Tax Deed Sale” and the monies collected from the sale are used to pay off the amount owed to the certificate holder.

What is a Tax Deed Application? Tax Deed application is the action, initiated by a tax certificate holder, which begins the process of selling a property at public auction for the delinquent taxes.

How is an online tax deed sale different from a “live” tax deed sale? Prior to online tax deed sales, auctions were conducted in the Commissioner’s Chambers of the Governmental Center where bidders called out their bids to an auctioneer. Online sales allow this process to be handled electronically. Each bidder will use a personal ID and password to log on to the website and enter bids for individual properties.

Who / When can a Tax Deed Application be submitted? Only a certificate holder who has held a tax certificate for a minimum of 24 months from the date taxes became delinquent is eligible to make a tax deed application with the Tax Collector’s Office. This action forces the owner to pay the back taxes and redeem the outstanding Tax Certificate(s), or the property will be sold at a public auction to the highest bidder.

I have held my tax certificate for 24 months. How can I go about purchasing/owning the property? A tax certificate is an investment. The investment does not convey any rights or ownership to the certificate holder. In order to own the property, you’d have to make a tax deed application, register and bid in the online tax deed auction and be the highest bidder at the sale.

How is a Tax Deed Application made? At the time of application, the certificate holder (applicant) pays any other outstanding taxes as well as a title search fee and a tax deed application fee. All of the unpaid taxes and fees are then combined with the applicant’s certificate, and interest is earned at the rate of 18 percent per annum. This interest begins accumulating at 1-1/2 percent per month, beginning the month after the application date. Tax Deed applications are filed electronically.

Are there additional costs involved? Approximately two months before the tax deed sale, the Tax Deed Applicant must pay additional funds for the cost of advertising, certified mailings and sheriff services or postings. These fees are then added to the total amount due to redeem the Tax Deed application.

After a Tax Deed Application is submitted, what happens if the owner pays the outstanding taxes? If payment is made to the County Tax Collector by the tax payer (property owner) or the mortgage company, the tax deed applicant (the tax certificate holder) is reimbursed for their total investment, the accrued interest and the Tax Deed sale process is cancelled. If the outstanding taxes are not paid, the property will be scheduled for sale at public auction.

Can anyone pay the Delinquent taxes and own the property? NO. Payment of delinquent taxes DOES NOT give the payee any rights to property. The redemption (payment) of a Tax Deed application is only accepted from someone with a legal interest in the property such as the property owner, his representative, or a mortgage company.?

Will the property owner be notified of the impending sale? Yes. An ownership and encumbrance report is obtained. Twenty days prior to auction, notification is sent by Certified mail to the property owner, lien holders, and other parties appearing in the report. Additionally, the Sheriff’s office will serve/post a notice of sale on the property.

What is the Opening Bid? The opening bid is the amount of taxes, included in the tax deed application, interest and fees (applicant’s investment). If the property has homestead exemption, the opening bid will also include one-half of the assessed value on the current tax roll.

What are the required fees? In addition to the winning bid, documentary stamp taxed ($0.70 per $100 or fraction thereof) as well as recording fees must be paid.

What form of payment is required for final payment? Final payment may be made by Cashier’s Check, Money Order, or wire transfer. Final payment must be received by 11:00 a.m. (EST) deadline the following day. If the payment is not received within the specified time, the deposit and property are forfeited along with the bidder’s/entity’s privilege to participate in any future tax deed sales (197.542(2) F.S.). In the event of forfeiture, funds from the forfeited deposit shall be applied toward the opening bid on the rescheduled sale. The following forms of final payment are generally NOT accepted: Cash, Personal check, Credit cards, Third party cashier’s checks or ACH payments.

Do I have the right to immediate possession? Yes. The recorded tax deed makes you the owner.

What type of document is issued as a result of the sale? A Tax Deed is issued. A tax deed is a form of title given in the event property is sold to satisfy taxes; A tax deed carries no warranties and does not guarantee clear title. It is to the buyer’s advantage to consult a real estate attorney in efforts to obtain clear title.

Once a property is acquired at a Tax Deed Sale, is there a redemption period for the former property owner? The former owner will be allowed to pay the delinquent taxes, and the sale made void until the bid is paid in full. The property may be redeemed by anyone with a legal interest in the property, such as the owner or mortgage company.