Category: Tax Deed

How To Successfully Foreclose the Right to Redeem Following a Tax Sale

Posted by Jeff on

Tyner v. Edge, which was decided by the Georgia Court of Appeals on May 22, 2020 (A20A0265), provides guidance on the process of foreclosing the right of redeem following a tax sale.

The court clarifies several aspects relating to properly barring the right to redeem:

(1) With regard to foreclosure of the right to redeem, Georgia law holds that a party who owns “any right, title, or interest in or lien” on the subject property is entitled to redeem (see O.C.G.A. § 48-4-40). Therefore, because of the word “any,” even a party with an unrecorded interest is entitled to redeem a property lost at a tax sale.

(2)  A party’s failure to record its interest does, however, have consequences because the holder of an unrecorded interest is not entitled to get a notice of foreclosure of the right to redeem. See OCGA § 48-4-45(a)(1)(c) and Freeman v. Eastern Sav. Bank, 271 Ga. 439, 440 (1) (520 SE2d 902) (1999). This means a tax deed holder can successfully bar the right to redeem without notifying persons or entities not in the chain of title. For this reason, a title search and careful examination of the title search is necessary in all cases.

(3) Regarding service by publication, the court confirmed that if the name and address of an interested party can be reasonably ascertained, notice of a tax sale by publication does not meet the requirements of due process. Hamilton v. Renewed Hope, Inc., 277 Ga. 465, 466 (589 SE2d 81) (2003). Consequently, tax deed holders must make a reasonable effort to locate all interested parties to successfully complete a barment, and cannot simply rely on publication.

(4) Payment of taxes, in and of itself, does not create an interest in property sufficient to trigger the notice requirements mentioned above. Thus, in this case, the party trying to redeem, who was not in the chain of title but had paid taxes, was not entitled to receive a barment notice.

Here, the tax deed owner won and the party trying to redeem lost. However, all parties who deal with tax deeds in Georgia can learn from this case. If you own a tax deed and need a lawyer, please call us at (404) 382-9994 to discuss barring the right to redeem for your tax deed.

Investa Services of GA, LLC: Tax Sale Case

Posted by Jeff on

Anyone who deals with excess tax sale funds or tax deeds in Georgia knows that Investa and/or affiliated entities play a significant role with regard to tax sales. Plaintiffs filed a class action against, among others, Investa. In this lawsuit, Investa was accused of improperly levying on tax executions for delinquent property taxes. The initial tax assessments were later reduced via a property tax appeal.

The trial court dismissed the lawsuit and Investa appealed. See B.C. Grand, LLC v. Investa Services of GA, LLC, A19A1297 (GA Ct of App, October 29, 2019). On appeal, the court ruled in favor of Investa et al., finding that B.C. Grand “failed to allege that the [Tax] Commissioner cancelled the tax executions or that they are void as a matter of law based on the post-issuance reduction in the tax assessment.” Because B.C. Grand failed to pay the taxes at issue while pursuing its appeal of the assessment. Instead, it waited to receive a refund (which it did receive), the full amounts owed remained valid. B.C. Grand also failed to plead the executions were void as a matter of law. So Investa was authorized to levy the executions at the full purchase price amount. Chalk one up for Investa.

Tax Deed Services For Owners of Tax Deeds

Posted by Jeff on

If you own a tax deed, we offer two services related to tax deeds: (1) barring the right of redemption and (2) quiet title.

(1) Barring right to redeem/Notice of Foreclosure of Right to Redeem. In Georgia, you are entitled to bar/foreclose the right to redeem any time after one year has passed from the tax sale. Barment notices need to be sent to the owner of the property at the time of the tax sale and to any other party that holds an interest in the property.  

We are normally willing to charge a fixed fee (depending on the circumstances of the tax deed) plus expenses. Expenses include title search (about $300), publication (about $150), sheriff’s service ($50/service), and certified mail ($6.80/envelope).

The average cost to foreclose/bar the right to redeem, including expenses, is approximately $1,500.

(2) Quiet Title Against All the World. This is done after the barment is complete in order to obtain marketable title. A quiet title involves filing a lawsuit in the Superior Court of the county where the property is located. On these, we charge attorney’s fees on an hourly basis. Normally, the attorney’s fees are about $2,500, but like any lawsuit, we can’t quote an exact amount because the time required varies from case to case. In a quiet title, the court will appoint a special master: a special master is a local attorney who reviews the case and gives a recommendation to the court regarding title. The special master will cost an additional 2,500 (this amount is approximate). Court costs are an additional $500 (filing fee is approximately $250 and service on each defendant is $50).

The total cost of a quiet title is about $5,000.

Who Gets Excess Tax Sale Funds in Georgia?

Posted by Jeff on

Revisiting a previous post, under Georgia law, a tax commissioner holds excess funds generated by a tax sale in a fiduciary capacity, and the disbursement of those funds is governed by OCGA § 48-4-5. But, after a tax sale, if there are excess funds after paying taxes, costs, and all expenses of a sale, who gets these funds? The answer, generally, is distribution of excess tax funds is based on the right to the funds at the time of the tax sale.

When there are excess tax funds, the officer selling the property shall give written notice of the excess funds to the record owner of the property at the time of the tax sale and to the record owner of each security deed affecting the property and to all other parties having any recorded equity interest or claim in such property at the time of the tax sale. Such notice shall be sent by first-class mail within 30 days after the tax sale, and shall contain a description of the land sold, the date sold, the name and address of the tax sale purchaser, the total sale price, and the amount of excess funds collected and held by the tax commissioner, tax collector, sheriff, or other officer. The notice shall state that the excess funds are available for distribution to the owner or owners as their interests appear in the order of priority in which their interests exist.

If there is a dispute regarding who is entitled to the excess tax funds, an interpleader is filed and the excess funds are distributed by the superior court to the intended parties, including the owner, as their interests appear and in the order of priority in which their interests exist.

Some issues that come up in regard to distribution of excess tax funds is whether a “super-lien” obtained via a redemption gives the redeeming party a right to claim the excess funds. The answer is no because a super-lien places a lien on the real property but not on the excess tax sale funds.

Another issue is when additional taxes come due after the tax sale—is the tax commissioner allowed to use the excess funds for taxes due after the tax sale? The answer is no because the tax deed purchaser is the party responsible for paying property taxes after the tax sale. The remedy for the tax purchaser is to add taxes paid to the redemption price.

And, finally, what happens if the owner of the property sells the property after the tax sale? Is the new owner entitled to the excess tax sale funds? The answer is no. Georgia law considers excess tax sale funds to be personal property; thus, these funds do not attach to the real estate. One exception is if the sales agreement contains language assigning the excess tax sale funds, then the person who sold the property loses their right to the excess funds.  Georgia Lien Services, Inc. v. Barrett, 272 Ga. App. 656 (2005).

Redeem a (Non-Judicial) Tax Deed

Posted by Jeff on

In Georgia, when property taxes are unpaid, a county is entitled to auction the property to the highest bidder to recover the unpaid property taxes. There are two types of auctions: non-judicial and judicial. This post only covers redeeming a property following a non-judicial tax sale, which includes most tax sales in Georgia.

Following a non-judicial tax sale, the taxpayer or any person who holds right, title, interest in, or a lien on the property may redeem the property within 12 months from the date of sale by paying the redemption amount. OCGA § 48-4-40. Redeeming means paying the tax deed purchaser to get the property back. The property may be redeemed at any time after the initial 12 months until the tax sale buyer forecloses (or terminates) the right to do so by giving proper notice.

To redeem a property following a tax sale, the redeeming party must pay the amount paid for the property at the tax sale, plus any taxes paid on the property by the purchaser after the sale for taxes, plus any special assessments on the property, plus a premium of 20 percent of the amount for the first year, plus 10 percent for each year after that. OCGA § 48-4-2.

After 12 months from the date of the tax sale, the purchaser can forever bar redemption of the property by giving notice to the delinquent taxpayer, the occupant, if any, and upon all persons having recorded any right, title, interest in, or lien on the property. OCGA § 48-4-5.

Suppose the property is not redeemed within the initial 12 month period or within the time allowed under the notice of the right of foreclosure. In that case, redemption is no longer allowed. OCGA § 48-4-47.

Whether you’re buying a tax deed or seeking to redeem a tax deed, please call us at 404-382-9994 to discuss your options.