Weld County Tax Lien Sale
March 18, 2009
Colorado Tax Lien Interest Rate
March 18, 2009
Rates Set by Commissioner
Pursuant to Sections 39-12-103, 39-12-111, and 39-21-110.5, Colorado Revised Statutes, the Colorado State Bank Commissioner is responsible for setting certain interest rates.
In order to access the following Memorandums, it will be necessary to download Acrobat Reader. Acrobat Reader is available free from Adobe in versions campatible to different platforms. Download Acrobat Reader using the active link below. The user also has the option of converting a PDF document that has been created in Adobe Acrobat to Text or HTML using the appropriate link below. To access the desired information, select the desired Memorandum year.
Tax Delinquencies
2004 Memorandum
2005 Memorandum
2006 Memorandum
2007 Memorandum
2008 Memorandum
39-12-103. Redemption made – interest. (1) Real property for which a tax lien was sold under the provisions of article 11 of this title as a result of delinquent taxes may be redeemed by the owner thereof or his agent, assignee, or attorney, or by any person having a legal or equitable claim therein, or by a holder of a tax sale certificate; except that such holder may redeem such real property from any sale of a tax lien thereof made subsequent to the time of the issuance of the tax sale certificate upon which he is relying, and the amount paid for the redemption of the subsequent certificate of purchase shall be endorsed as subsequent taxes paid on the certificate upon which he is relying.
(2) An undivided interest may be redeemed upon payment of a ratable share of the sum required to redeem the whole even though a tax lien for the whole has been sold. In case a tax lien on any tract of land sold for delinquent taxes under the provisions of article 11 of this title belongs to two or more separate and distinct parties in severalty, the treasurer, when satisfied of the fact and upon application of any one of the parties or his agent, assignee, or attorney and upon payment of the proper proportional amount, shall issue a certificate of redemption for such party’s interest in said land.
(3) The redemption may be made at any time before the execution of a treasurer’s deed to the purchaser or his heirs or assigns upon payment to the treasurer, to be held by him subject to the order of the purchaser, of the amount of taxes, delinquent interest, and costs for which the tax lien on the property was sold, with redemption interest thereon from the date of sale at the rate which is determined as provided in this subsection (3), together with the amount of all taxes accruing on such real property after the sale, paid by the purchaser and endorsed on his certificate of purchase, with redemption interest at the rate which is determined as provided in this subsection (3) on such taxes so endorsed on the certificate of purchase. Any payment under this section shall be deemed received by the treasurer on the date that it is actually received in the treasurer’s office. The annual rate of redemption interest shall be nine percentage points above the discount rate, which discount rate shall be the rate of interest a commercial bank pays to the federal reserve bank of Kansas City using a government bond or other eligible paper as security, and shall be rounded to the nearest full percent. The commissioner of banking shall establish the annual rate of redemption interest based upon the computation specified immediately above. Such annual rate of redemption interest shall be so established as of September 1, 1981, to become effective October 1, 1981. Thereafter, on September 1 of each year, the annual rate of redemption interest shall be established in the same manner, to become effective on October 1 of the same year.
(4) If subsequent taxes are paid before the time when they would become delinquent, interest shall be computed only from the time of their delinquency. Such taxes shall bear interest at the annual rate set forth in subsection (3) of this section, and no more, from the time when the purchaser becomes entitled to a deed up to the time of issuance of such deed.
(5) All statutory fees paid by the purchaser in connection with such certificate shall bear the same rate of interest as the original amount for which the tax lien on the property was sold, the same to be prorated among the several tracts described in said certificates.
(6) In computing the amount of interest due, portions of months shall be counted as whole months.
Wrongfully Sold Tax Liens
2004 Memorandum
2005 Memorandum
2006 Memorandum
2007 Memorandum
2008 Memorandum
39-12-111. Land wrongfully sold – repayment. (1) When, by mistake or error of the treasurer, county clerk and recorder, or assessor or from double assessment, a tax lien has been sold on land upon which no tax was due at the time, the county shall reimburse the purchaser in the amount paid by him in connection with the purchase of the tax lien on such land, together with interest from the date of purchase at the rate which is determined as provided in this section. Reimbursement shall be made from the various funds to which the tax was originally distributed; except that interest shall be paid from the county general fund. The treasurer, county clerk and recorder, or assessor, as the case may be, and his sureties on his official bond shall be liable to the county for such amounts reimbursed as a result of sales made only through willful misconduct.
(2)(a) The annual rate of interest shall be two percentage points above the discount rate, which discount rate shall be the rate of interest a commercial bank pays to the federal reserve bank of Kansas City using a government bond or other eligible paper as security, and shall be rounded to the nearest full percent.
(b) Notwithstanding any other provision of this subsection (2), the rate of interest shall be no lower than eight percent per annum compounded annually.
(3) The commissioner of banking shall establish the annual rate of interest based upon the computation specified in subsection (2) of this section. Such annual rate of interest shall be so established as of September 1, 1981, to become effective October 1, 1981. Thereafter on September 1 of each year, the annual rate of interest shall be established in the same manner, to become effective on October 1 of the same year.
Overpayment of Certain Taxes
2004 Memorandum
2005 Memorandum
2006 Memorandum
2007 Memorandum
2008 Memorandum
39-21-110.5. Rate of interest to be fixed. (1) When interest is required or permitted to be charted under any provision of articles 20 to 29 of this title in connection with interest on underpayment, nonpayment, extension of time for payment, or overpayment, or when interest is required to be paid pursuant to section 8-20.5-104, C.R.S., in connection with an application for reimbursement from the petroleum storage tank fund, such interest shall be computed at the annual rate which has been established pursuant to this section.
(2) The annual rate of interest shall be the prime rate, as reported by the “Wall Street Journal”, plus three points, rounded to the nearest full percent. In the event that more than one rate is so reported, the highest rate shall be utilized.
(3) The commissioner of banking shall establish an adjusted annual rate of interest based upon the computation specified in subsection (2) of this section and rounded to the nearest full percent. The adjusted annual rate of interest shall be so established by the commissioner of banking as of July 2, 1990, to become effective January 1, 1991. Thereafter, on July 1, or the next succeeding business day, of each year, the adjusted annual rate of interest shall be established in the same manner, to become effective on January 1 of the next succeeding year.
Larimer County Tax Lien Sale
March 18, 2009
Tax Lien Sale
November 18, 2009
Doors will open at 7:30 a.m.
Tax Lien Sale will begin as soon as everyone has registered. (NO LIMITS ON CAPACITY).
McKee Community Building at the Larimer County Fairgrounds and Event Center
(Location and times are subject to change.)
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Location
The 2009 Larimer County Tax Lien Sale will be held in the McKee Community Building at the Larimer County Fairgrounds and Event Center. (The Ranch) The Ranch is located directly adjacent to I-25, just North of Highway 34, in Loveland, Colorado. To reach the Ranch, exit I-25 at Crossroads Boulevard, Exit 259. Travel East 1 mile to Fairgrounds Avenue (County Road 5) and go North to the entrance. The McKee Building is the first building on the right.
Parking
Parking is in the gravel lot south east of the McKee building. Marked handicapped parking spaces are located directly in front of the building.
Mailing List
If you would like to receive a packet for the Tax Lien Sale, please send $5.00 (credit cards are not acceptable), to the Larimer County Treasurer’s Office, ATTN: Tax Sale Civil Deputy, P.O. Box 1250, Fort Collins, CO 80522. This packet includes our Tax Lien Sale brochure and an advertising tabloid of the delinquent property taxes as of Oct. 1, 2009. The packets will be mailed mid-October. Our Tax Lien Sale is conducted with the goal of fairness in mind. Comments and suggestions are given serious consideration, and have been implemented where functional. Please feel free to contact us at 
(970) 498-7032
or via e-mail.
For further information select:
- Redemption of Tax Liens
- Endorsement of Subsequent Tax Years
- Treasurer’s Deed Information
All property (real) taxes must be collected in order to meet the budget of all certified taxing authorities. Therefore, an annual Tax Lien Sale is held to collect the unpaid taxes. These taxes are purchased by investors who, in turn, earn interest on the tax liens against these properties. The amount of the individual tax lien(s) purchased includes the amount of tax, delinquent interest (through November), and advertising / certificate fees.
Three years following the date of Tax Lien Sale, an application for a Treasurer’s Deed may be accepted from the tax lien holder if redemption of the lien is not received. The application process ranges from five-to-six months. All legally interested parties are given a 120-day redemption period to keep their interest in the property. A Treasurer’s Deed is issued if redemption, (plus the $350.00 application fee), is not received by a legally interested party before the issuance date of the Deed.
Tax Lien Sale Procedures
Who Can Participate?
C.R.S. 39-11-151(1)(b); No tax lien shall be sold to an elected or appointed county official, to a county employee, or to a member of the immediate family of such person or to the agent of any such county official or employee during the time the official or employee holds office or is employed. You must be of legal age (18) to participate in our tax lien sale.
Agents
Agents for individual investors are not allowed. See section on Assignment of Tax Liens.
Registration
Registration will begin at 7:30 a.m. the day of the sale. Tables will not be available so please plan accordingly.
FOOD AND DRINK
Consessions will be provided. Drinks, breakfast foods and lunch items will be available for sale. Tables and chairs will be available for eating purposes only.
IRS Requirements
We are required by the Internal Revenue Service to issue 1099-INT Forms to tax buyers. You must complete a W-9 at the time of registration or already have one on file with the Larimer County Treasurer’s Office to participate in our Tax Lien Sale. The W-9 forms will be available at the Tax Lien Sale.
New investors or previous investors with changes to their W-9 can mail their completed W-9 to our office. If your W-9 is received in our office by November 17, 2009 you will only have to check in to get a bidder card the day of the sale.
Deposits
We no longer require deposits to purchase liens at our Tax Lien Sale. Deposits are required for liens purchased by parties with legal vested interest.
Interest Rate
The interest rate (established pursuant to C. R. S. 39-12-103) for the 2008 tax year will be available by the first of September. This rate is established by adding nine percentage points to the federal discount rate as of September 1, 2009, and rounding to the nearest full percent.
Buyer’s Lists
The current buyer’s lists can be picked up at the registration table on Tax Lien Sale day.
Order Of Sale
1. Strike-offs, 2. Real Estate, including premium bids, and 3. Mobile Homes. Properties will be sold in alphabetical order, by owners’ name. ALL TAX LIENS ARE SOLD AND ISSUED ON THE DAY OF THE SALE.
Strike – Offs
Anyone with a legal interest in a particular parcel(s) and desiring a lien stricken off to them, must sign a declaration of legal vested interest and deposit the dollar amount to cover these liens between November 2 and November 17, 2009. We will announce these strike-offs at the beginning of the Tax Lien Sale. If other buyers do not object to the strike-off requests, the sale of these liens will be considered final.
Rotation Bidding
The first bidder will be chosen using a randomly selected bidding number. It doesn’t matter where you sit in the room, everyone is going to have the same chance at the property taxes being offered for sale. Rotation bidding will be done in seating order to allow participants equal bidding opportunities. Since the sale will proceed in seat order, it is very important that you maintain your original seat. ONLY ONE CARD WILL BE ISSUED PER PERSON.
If an item is less than $200, the bidder may pass without losing a turn. The less-than $200 item is then opened to the floor. For items over $200, the bidder must accept or lose the turn. If the bidder declines, the item is then offered to the next person in rotation.
Premium Bids
Premium bids are bids placed in excess of a property’s taxes face value. On parcels listed at $3,000 or more, the minimum premium bid is $50 with minimum raises of $25.
**PREMIUM BIDS WILL ONLY BE ACCEPTED
ON THOSE PROPERTIES WITH AN AMOUNT
DUE OF $3,000 OR MORE.**
(This amount is subject to change)
Investors must stand to be recognized during the premium bidding process. ALL premium bids are made at INVESTOR’S EXPENSE and ABSOLUTELY NO INTEREST IS EARNED on them, nor is this amount refunded when the property is redeemed.
End Of Sale
Purchases MUST be paid BEFORE leaving the premises.
FAILURE TO DO SO WILL RESULT IN LOSS OF LIENS PURCHASED!
ONLY PERSONAL CHECKS FOR THE PURCHASE AMOUNT WILL BE ACCEPTED
WE ARE NOT ACCEPTING CASH OR CERTIFIED FUNDS AT TAX LIEN SALE
Verify account expenditure with the Treasurer’s staff located at the Tax Lien Sale registration table. Your bidder card MUST be dropped off at check-out. Make checks payable to: Larimer County Treasurer. Checks must be made for the exact amount of purchases. If your check is returned for NSF, it will result in the loss of liens purchased and you will be banned from future tax lien sales.
Account Balances
Anyone requesting account balance information during the sale can receive an update from the Treasurer’s staff located at the registration table.
Tax Lien Certificates Of Sale
All certificates of sale will be held in safekeeping in the Larimer County Treasurer’s vault unless otherwise instructed by a formal written request. A safekeeping receipt and complete computer report of all Tax Lien Sale purchases will be forwarded to you. This usually takes about 7-10 working days.
Assignment of Tax Liens
We will start processing of assignment of liens in January 2010. This will allow our office enough time to complete all of the necessary paperwork before making any assignments. Please contact Michele at (970) 498-7032, after January 4, 2010, to setup an appointment to request an assignment. There is a $10.00 fee to process each assignment.
Element Of Risk
It is important to remember the element of risk involved in the purchase of tax liens. The purchase of tax sale liens of properties under the control of the Federal Deposit Insurance Corporation (FDIC) and those affected by the Drug Enforcement Administration (DEA) could possibly result in the loss of your investment. Additionally, it is impossible for this office to identify all of the potential problems in this area. Please conduct your own investigation to reduce the possibility of loss.
Our Tax Lien Sale is conducted with the goal of fairness in mind. Comments and suggestions are given serious consideration, and have been implemented where appropriate. Thank you for interest in this year’s sale!
Tax Sales State Wide
Click below for the dates and times of Tax Sales in the other counties in Colorado.
For Further Information On Tax Lien Sale,
Contact The Treasurer’s Office at
(970) 498-7032, or via e-mail
Larimer County Tax Sale Redemption Process
March 18, 2009
“Redemption” Information
THE FOLLOWING INFORMATION IS FOR REAL PROPERTY ONLY! Please see Mobile Home Information for appropriate information.
A redemption payment is made to the Treasurer for the amount of delinquent taxes, delinquent interest, advertising fees, and any other additional costs incurred during the tax lien process. Payments will only be accepted from the owner, his agent, or any other person having a legal or equitable claim against the property at any time before the execution of a Treasurer’s Deed. If an application for a Treasurer’s Deed has been accepted, an additional $350.00 is due upon redemption. (Please see Treasurer’s Deed for additional information regarding the deed process)
ALL REDEMPTION PAYMENTS MUST BE
MADE BY CASH OR CERTIFIED FUNDS
Interest is calculated on a monthly basis. Therefore, the amount due changes monthly. Postmarks are NOT acceptable for delinquent property payments that have a tax lien.
Upon payment, the Treasurer shall issue a Certificate of Redemption. The Certificate includes the legal description of the tract of land redeemed, the date of redemption, the amount paid, and by whom the redemption payment was received. The Certificate will be mailed to the party making payment after it has been recorded with the Clerk and Recorder’s Office, generally about a month.
What is a Tax Lien
March 17, 2009
A tax lien is a lien imposed on property by law to secure payment of taxes. Tax liens may be imposed for delinquent taxes owed on real property or personal property, or as a result of failure to pay income taxes or other taxes.
Tax liens in connection with property taxes
Unlike personal debts, tax liens on real estate “run with the land”; that is, a property owner becomes responsible for payment even if the tax obligation was incurred by a prior owner. Depending on the law of the state or jurisdiction, the owner of the property may also be personally liable for payment of the taxes.
Payment of a tax lien may occur through various methods:
- Payment may be made directly by the property owner or, in many cases, indirectly by the mortgage holder using an escrow account. Notice is given both to the property owner and mortgage holder when a property tax is delinquent; thus, even if the property owner does not have an escrow account on the mortgage, the mortgage company will receive notice of the delinquency and may pay the tax. The mortgage company will then demand repayment from the owner/borrower and/or create an escrow account to recoup the proceeds, since the mortgage company might lose some of the value of its mortgage lien if the property were sold by the taxing agency to satisfy unpaid taxes foreclosure.
- If a property is sold by the owner prior to tax foreclosure by the government body, the tax lien (which is generally discovered as part of a title search) is usually paid as part of closing costs from the sale proceeds.
- Procedures vary from state to state. Generally, in the event a tax lien on personal property is not paid within a specified time (and after several notices are generally given), the property may be seized and sold at foreclosure sale. On real property, one of two methods may be used: either the property may be seized and sold (a tax deed sale), or in some States the tax lien may be offered to investors (in the form of a tax lien certificate) with an accompanying right for the investor, after a specified period of time, to institute foreclosure proceedings (a tax lien sale).
Tax Deed Sale Investing
March 17, 2009
A tax deed sale is the forced sale, conducted by a governmental agency, of real estate for nonpayment of taxes. It is one of two methodologies used by governmental agencies to collect delinquent taxes owed on real estate, the other being the tax lien sale.
Tax Deed Sale Process
Real estate taxes are considered delinquent if not paid within a specified period of time. If the taxes are not paid, after legal requirements are met (such as giving proper notice to the property owner as well as others holding an interest in the property, or by filing required action in the courts), the property is offered for sale at a public auction. Before the property is offered for sale at auction, Jurisdictions such as Florida sell a Tax Lien Certificate on the property. A Tax Lien represents a lien of unpaid real estate taxes, assessments, including penalties, advertising costs and fees. If the property owner fails to pay the delinquent taxes during a specified period of time, the county government can sell what is called a Tax Lien Certificate on the property. The Tax Lien Certificate represents the outstanding taxes on the property. Many county governments sell the Tax Lien Certificates to investors so that the county may recoup the delinquent taxes. In exchange for the purchase, county governments offer the investors interest on those Tax Lien Certificates and the guarantee that those Tax Lien Certificates will be paid off within a predetermined period of time. Interest accrues on the Tax Lien Certificate over a specified course of time until the taxes are paid. A Tax Lien Certificate is a first position lien (Senior Lien) on the property. In most states, if the property owner does not redeem the Tax Lien Certificate within a specified time period the holder of the certificate can ask the county government to begin procedures to auction the property to the public. Proceeds from the auction will pay off the Tax Lien Certificate Holder.
The minimum bid is generally the amount of back taxes owed plus interest, as well as costs associated with selling the property. Bidding is done in increments from $10-$100 in most states. In the event the property is not purchased, title may revert to the government if a Tax Lien Certificate was not sold on the property. The government may then attempt to sell the property at a public auction and/or offer it for sale in a private transaction. If a Tax Lien Certificate was sold on the property, states like Florida will offer the property to the Tax Lien Certificate Holder. In that case the Tax Lien Certificate Holder will receive title to the property.
In most cases, the jurisdiction will only provide a quitclaim deed at the sale, which is usually insufficient for title insurance. Therefore, a “quiet title” action must be filed in court to obtain an insurable title.
Some jurisdictions allow a “redemption period”, whereby the former owner has a specified amount of time to reclaim the property by repaying the amount bid at auction plus a penalty. For example, Texas allows a 6-month period in most cases, with a flat 25% penalty to be added to the amount paid at sale (for agricultural and homestead property the period is 2 years and if redeemed in the second year the penalty is 50%), while Tennessee allows a full year, with a 10% penalty. As such, purchasers of properties at tax deed sales are cautioned not to make major improvements on the property until after the redemption period has expired.
Other jurisdictions do not allow a redemption period after sale (for example, Florida). However in Florida, the prior owner can still redeem the property by paying the delinquent taxes after the Tax Deed sale. In Florida this must be done before the Clerk of the Court signs the Tax Deed over to the new owner. The Clerk of Court signs the Tax Deed and records it in the public records under the name of the highest bidder once that bidder makes their final payment. The prior owner can still attempt to challenge the validity of the tax sale, for example by claiming that proper notice was not given.
Tax Lien Investing at Tax Sales
March 17, 2009
A tax lien sale is the sale, conducted by a governmental agency, of tax liens for delinquent taxes on real estate. It is one of two methodologies used by governmental agencies to collect delinquent taxes owed on real estate, the other being the tax deed sale.
In a tax lien state, the lien (consisting of delinquent taxes, accrued interest, and costs associated with the sale) is offered to prospective investors at public auction. Traditionally, auctions were held in person; however, Internet-based auctions (especially within large counties having numerous liens) have grown in popularity as this method allows for bidders from outside the area to participate.
In the event that more than one investor seeks the same lien, depending on state law the winner will be determined by one of five methods:
- Bid Down the Interest. Under this method, the stated rate of return offered by the government is the maximum rate of return allowed. However, investors can accept lower rates of return, including zero percent in some cases (though this is rare in practice). The investor accepting the lowest rate of return is the winner. In the event more than one investor will accept the same lower rate, a random or rotational method (see below) will be used to break ties. (Florida and Arizona use this method)
- Premium. Under this method, the investor willing to pay the highest “premium” (or excess above the lien amount) will be the winner. The premium may or may not earn interest, and may or may not be paid back to the investor upon redemption of the lien. (Colorado uses this method)
- Random Selection. Under this method, a bidder will be randomly selected from those offering a bid. Usually a computer is used to make the selection, but in smaller jurisdictions more rudimentary methods may be used (Larry Loftis, a professional tax lien investor from Orlando, Florida and an author on the subject, mentions in his book of an Iowa county whose random selection method consisted of drawing numbered ping-pong balls from a fried chicken bucket).
- Rotational Selection. Under this method, the first lien offered for sale will be offered to the investor holding bidder number one, who has the right of first refusal. If bidder number one refuses the lien, bidder number two may then bid. However, bidder number one will not be offered another lien until his number comes up again in the rotation. The next lien will go to the next number in line. Under this method, the investor has virtually no control over which liens s/he will obtain in the bidding, except to take or refuse what is offered.
- Bid Down the Ownership. Used in Iowa and few other states, the investor willing to purchase the lien for the lowest percent of encumbrance on the property will be awarded the lien. For example, a bidder may agree to take a lien on only 95% of the property. If the lien is not redeemed, the investor would only receive 95% ownership of the property with the remaining 5% owned by the original owner. In practice, few investors will bid on liens for less than full right to the property or sale proceeds. Therefore, with multiple owners bidding on 100% encumbrance, the process then generally reverts to the random selection.
Liens not sold at auction are considered “struck” (or sold) to the entity (usually the county) conducting the auction. Some states allow “over the counter” purchases of liens not sold at auction. However, in most instances the unsold liens are on marginal or worthless properties, the liens on better properties having been purchased at auction.
Redemption process
The investor must wait a specified period of time (referred to as the “redemption period”), during which time the lien (plus interest and any other fees) may be repaid. Usually the lien holder is not permitted during this period to contact the property owner (or anyone else having an interest in the property, such as the mortgage holder) to demand payment or threaten foreclosure, or else the certificate can be forfeit.
In some jurisdictions, the lienholder must agree to pay subsequent unpaid property taxes during the redemption period in order to protect his/her interest. If the lienholder does not pay such taxes, a subsequent lienholder would “buy out” the prior lienholder’s interest.
Once the redemption period is over, the lien holder may initiate foreclosure proceedings. The proceedings (the costs of which must be paid by the lien holder, though a redeeming property owner may be required to pay them as part of redemption) may result in either acquiring title to the property (normally this will be a quitclaim deed and not insurable title), or a tax deed sale of the property where the lien holder has the right of first bid (and may participate by making additional bids if s/he so chooses). During the period between the initiation of proceedings and actual foreclosure, the property owner still has the opportunity to repay the lien with interest plus the costs incurred to foreclose.
If the lien holder does not act within a specified period of time as defined by state law, the lien is forfeit and the holder loses his investment. Also, a lien issued in error of state law is repaid, but usually at a far lower interest rate than had the lien been valid.
Benefits of tax lien investing
- The maximum rate of return on a tax lien can be far higher than other investments. For example, Florida offers a maximum rate of 18% (1.5% per month), while Arizona offers a maximum rate of 16%. Iowa offers a guaranteed 2% per month (or 24% annual return).
- However, as an incentive to encourage bidding, Florida law guarantees a 5% minimum return regardless of the rate bid (except if the bid is zero percent) or when the lien is redeemed. Thus, if a Florida certificate is purchased at auction on one day and redeemed on the next, the investor will earn 5% over the certificate price for one day’s holding, or a mind-boggling 1,825% return! [Loftis, the author mentioned above, in his book tells another story where he went to pay for a lien, only to find a redemption check waiting for him on the lien he bought; thus, he states that he obtained a return rate of infinity (to be mathematically correct, since it involved division by zero, the rate of return is actually not calculable).]
- In practice, the majority of tax liens are redeemed before the property is foreclosed; thus, the risk of loss is minimal.
Pitfalls of tax lien investing
- Payment is usually required at purchase or within a very short time afterward (often no more than 24-72 hours). Failure to pay the full amount results in all lien certificates purchased by the investor being cancelled, and may result in the investor losing his/her deposit and/or being barred from future sales.
- In many states further actions must be taken to protect the lien holder’s rights after purchase of a lien. Failure to comply exactly with these requirements may make the lien worthless.
- Tax liens on “choice” properties are quickly purchased by major institutional investors having sufficient time and resources to research valuable properties vs. worthless ones and who can afford the occasional poor choice; smaller liens usually involve properties that are generally worthless (such as odd strips of land). (In addition, Florida does not allow auctions or sales of tax liens of less than $100 on homesteads.) In “random” and “rotational” jurisdictions, investors have even less control over which liens they purchase.
- In “bid down the interest” jurisdictions, valuable properties are usually bid to the lowest rate possible greater than zero percent. (For example, Florida permits the interest rate to be bid down to a minuscule 0.25% – though it guarantees a minimum 5% return – while Arizona allows the bid to be as low as 1%.) Similarly, in “premium” states, valuable properties are bid up above the means of an average investor.
- Unlike a certificate of deposit, tax liens are illiquid. They cannot be “cashed in” (resold to the taxing authority), but must be held until either they are repaid or the holder takes action to foreclose. (It is possible, however, to assign one’s interest in a tax lien to another party.)
- Some experts tout tax lien sales as a means of acquiring property at highly discounted prices. In practice, except for very rare instances all of liens of any value are redeemed well before the property can be foreclosed (especially where a mortgage is involved, as the mortgage holder is secondary in line to a tax lien), and where tax deed sales are used to foreclose, numerous bidders participate, thus making the chances of actual acquisition remote. For example, in one Illinois county with a population of over 500,000 the County Clerk’s office said only 3 residential properties were not redeemed in 35 years.
- If someone is successful in attaining the deed to the property, the property might have environmental problems for which the new owner will be responsible. Depending upon the state, this could be very disadvantageous and the investor might have to pay a large amount of money to have the problem taken care of, or be fined daily until the problems are fixed.
- Deeds obtained are usually quitclaim deeds, which do not provide insurable title. The owner would then have to file a quiet title action to obtain marketable title to the property, which involves additional cost.
- There may also be other governmental liens (such as weed liens or demolition liens) that the investor must pay off when attaining title to the property. These are not part of the lien sale and remain even if the lien holder acquires the property.
- If the owner of the property declares bankruptcy, the bankruptcy court may lower the interest rate to be paid, or may discharge part or all of the lien, leaving the lien holder with nothing.
Thousands try to avoid the inevitable
March 16, 2009
More than 5,000 Onslow County residents owe the county tax office money.
A list of those residents with 2008 property tax liens is featured in today’s issue of The Daily News.
The 5,148 outstanding tax property tax liens add up to about $3.8 million.
The 2008 list has about 1,100 more names than the previous year, something Tax Administrator Harry Smith said could be attributed to the current state of the economy.
“It’s probably a jump from what we normally see, looking down the list some of it seems to be even like new developments, obviously the real estate market … has impacted the developer’s ability to sell lots,” Smith said. “It all kind of triggers from that same thing, when the real estate market and economy has slowed down it impacts the developer’s ability to be able to sell their property.”
Smith said along with the increased number of liens, the tax office has also been slower in collecting money owed. Usually the office has collected about 96 percent of the money owed by the end of the fiscal year in June, and so far this year the office has collected only 92 percent.
“So that indicates it’s been a little slower coming in this year,” Smith said.
Delinquent taxes can also affect the upcoming budget year, Smith said.
“It basically affects our upcoming budget because basically, I believe, you generally budget for what your proper collections percentage was,” he said.
Among those listed is Buffalo Soldier LLC, whose chief executive officer was Jacksonville City Council member Jerome Willingham, according to the North Carolina Department of the secretary of the State.
Willingham declined to comment on the lien.
Those with their name on the tax lien list are encouraged to contact the tax office and arrange for payment, Smith said.
Pay Property Taxes, Avoid Legal Troubles
March 16, 2009
Pay Property Taxes, Avoid Legal Troubles
By Richard Gentilviso
If you are behind in your property taxes and/or water and sewer bills, now is the time to clear them up.
The city’s annual lien sale for 2009 is underway and if you have received a lien sale notice by mail or if your property has been listed on a published lien sale list, it means that city records show that you owe property taxes, water, sewer, or other property-related charges and accrued interest, according to the Department of Finance.
You must arrange for payment, or, if you think that you do not owe money, you must dispute the charges to correct the city’s records before May 1, 2009.
The Department of Finance and the Department of Environmental Protection (DEP) will hold an outreach session on March 19 from 5 p.m. to 7 p.m. in Queens at the Finance Business Center at 144-06 94th Ave. on the first floor. Owners will be given one-on-one customer assistance. Call the DOF Tax Lien Ombudsperson at 212-504-4039 if you plan to attend or for more information.
“There are 24,000 properties [citywide] in arrears,” said Lee Fiorino, director of outreach at the March meeting of the Queens Borough Cabinet. Queens has 6,100 properties on the list, said Fiorino. Brooklyn has the most, at 10,000.
Fiorino said the 90-day list, published on February 3, has $592 million worth of debt on it. “In a lien sale, New York City sells the debt, not the property, to a private collector,” she said. The city takes about an 80 percent cut up front on the sale.
A lien is a legal claim against real property for unpaid taxes, water, sewer or other property charges, as well as the interest due on the taxes and charges. The city is allowed to sell liens to an authorized third party, a “lienholder,” who then has the authority to collect the money that was owed to the city, plus fees and interest, and ultimately, to begin foreclosure if an agreement with the lienholder is not reached.
Brevard County Florida Tax Sale
March 13, 2009
Brevard County real estate taxes are due each year November 1, payable through March 31 of the following year, with discounts allowed for early payments and a 3% penalty imposed beginning April 1. Items remaining unpaid by Mid-April are advertised in the local newspaper for three consecutive weeks in May in an effort to notify the property owners of outstanding tax liability.
According to Florida Statutes, on or before June 1 a tax certificate sale must be held. This is a public auction where a tax certificate is sold to the party who will pay the property owners tax and accept the lowest interest rate when redemption is made. A certificate is an interest bearing lien and the interest rate varies from 0% to 18%. Certificates are sold on any items remaining unpaid at the time of the sale. Once a certificate is sold the property owners may redeem the certificate by payment of taxes plus penalty, advertising, fees and interest. If the certificate is not redeemed within a two year time period the certificate holder may begin proceedings for a tax deed sale.
Legal Descriptions
Subdivision plat maps are available in Clerk’s office, Official Records Department. These descriptions are identified by a Subdivision name, Block number and Lot number. Metes & Bounds legal descriptions (section, township, range) maps are available in the Property Appraiser’s office.
Liens
Governmental liens & judgments survive the issuance of the tax deed and are satisfied to the fullest extent possible with any overbid monies from the sale. Liens of governmental units not satisfied in full survive the issuance of the tax deed. Should you have any questions concerning what liens & judgments survive the tax deed sale, consult an attorney, as we can not advise you.