Tag: tax deed

The Insurability of Tax Deed Titles

If you’ve purchased a tax deed in Georgia, what do you need to do to obtain ownership of the property? That’s a question we get frequently. First and foremost, following a tax sale, you need to bar the right of redemption of the owner who didn’t pay taxes and any party who holds an interest in the property. This has been covered in other blogs on this website. But what about after you’ve barred the right to redeem, are you able to put up for sale sign and sell the property?

Generally, if there’s a non-judicial tax sale on the property within the past 20 years, the answer is no. In other words, most title insurance companies won’t title insure such properties. So what to do. There are generally three ways to obtain full title or what is known as “marketable title.”

The first way is to adversely possess the property for more than four years. This means taking full possession of the property in a manner that is (i) hostile (against the right of the true owner and without permission); (ii) actual (exercising control over the property); (iii) exclusive; (iv) open and notorious (using the property as the real owner would, without hiding occupancy); and (v) continuous.

The second way is to get a quitclaim deed from the of the owner who didn’t pay taxes and any party who holds an interest in the property.

The third way is to file a quiet title action in the Superior Court in which the property is located. In such a lawsuit the owner who didn’t pay taxes and any party who holds an interest in the property are named and given an opportunity to object.

Please call with any questions regarding tax deeds or any of the above methods of obtaining marketable title once a barment notices have been completed.

Service by Publication in a Quiet Title or Tax Deed Barment

In both a tax deed barment and the subsequent quiet title, a critical part of the procedure is serving all parties with an interest in the subject property. This includes lien holders, heirs, and anyone else with a claim against the property.

Often in these situations, especially when the property is distressed or abandoned, parties connected with the property may be hard to find. The best example is the delinquent taxpayer. That party has not paid taxes for one or more years, and, many times, has abandoned possession. If the delinquent taxpayer is gone and hasn’t left a forwarding address, that party may be anywhere.

What must be done in these situations? A reasonable and diligent search must be conducted to find and serve each party that has an interest. In a barment, this requires personal service for parties residing in the county of the tax sale or certified mail for parties residing outside the county. In a quiet title, personal service is required.

What if personal service or certified mail is unsuccessful? For example, you get back the certified letter stating it is undeliverable. In those situations, you’re entitled to serve by publication. This usually means advertising notice of the barment or lawsuit in the official county newspaper for four consecutive weeks.

Sound simple . . . usually it is  straightforward, but there are times when things don’t work out as expected. In a recent case, Dukes v. Munoz et al., A18A0572 (decided June 15, 2018), a tax deed holder, unable to serve the delinquent taxpayer, hired an investigator. The investigator came back saying the delinquent taxpayer could not be found after reasonable search. Relying on the investigator’s testimony, the tax deed holder barred the taxpayer’s right of redemption and filed a successful quiet title action.

Happy tax deed holder and end of story . . . not so much. Turns out that the delinquent taxpayer was a Georgia state legislator, who found out about the barment and quiet title. The Georgia Court of Appeals ruled that because a Google search would have provided the address for the delinquent taxpayer, the tax deed holder had not exercised proper diligence in locating the delinquent taxpayer. Therefore, service by publication was improper and the barment and quiet title were voided; the tax deed holder was forced to incur the expense of the barment and quiet title.

The takeaway is that it’s not sufficient to use the last known address of party if that address appears invalid. The best approach, in our opinion, is to spend a little extra money to make sure parties with an interest are served and given a proper opportunity to object.

Redeem a (Non-Judicial) Tax Deed

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.