A February 2009 Supreme Court ruling concerning proper notification of property owners has significantly changed the ability to enforce a tax lien buyer’s ownership of the property. The U.S. Supreme Court ruling and a subsequent State Supreme court ruling make it very difficult to properly notify the owner of the property. The existing statute in my state required a certified letter be sent to the last known address left with the county tax collector. The property owner didn’t live anywhere in the area. The certified letter was sent, with return receipt requested, was sent to the address and then returned undelivered about a week later. The documentation was presented to the tax collector at the end of the redemption period and a tax deed was issued giving title of the property to the tax lien buyer.
The subsequent suit to quiet title was initiated by the investor in order to get an insurable title to the property. The court gave title to the property back to the former owner. The tax deed was overturned by the court. The reason given was improper notice even though the investor had completed every required step in the process as determined by state law at the time.
Tax liens can be a very profitable investment so long as you know the requirements and follow all the procedures. Be sure you take the step of getting all the title issues settled before doing anything with the property.
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