In our weekly question segment Joel wants to know if a property owner can pay the delinquent taxes and thereby cancel the tax sale after it has been purchased by an investor. Watch the video for our answer!
Transcript:
Casey Denman:
Hi there! Casey Denman here with TheTaxSaleAcademy.com, answering your weekly question. This week’s question comes to us from our friend, Joel. Joel says, “If I win a property at tax sale, can the owner come back at a later date and get the property back by paying the taxes?”
Joel, first off, thank you for submitting your question. Now, what I’m about to tell you will apply to tax deed sales. I don’t teach anything about tax liens. When it comes to tax liens; yes, of course the owner can come back and pay the taxes and basically wipe the lien out, leaving you with a nominal return on your investment.
Now when it comes to tax deeds, the answer to your question is yes, they can come back sometimes and cancel your deed. And no, in other situations they can’t. It really just depends on the specific state you’re interested in investing in. In most true tax deed states or most hybrid states, once you have that deed that is put into your name – the deed that you purchased when you bought the piece of property at tax sale auction – they will not be able to cancel that deed or remove your ownership from that piece of property.
Now, there are certain exceptions to this. And those exceptions are called redeemable deed states. In redeemable deed states, kind of as the name implies, what happens here is once you purchase that property at a tax sale auction, they will actually give you a deed to the property, but the previous owner will have a certain time period to come back and basically pay those back due taxes, thereby cancelling the deed to you.
So you could buy a piece of property at a tax sale auction and you could get a redeemable deed in a specific state, for instance, that has a six month redemption period that allows the previous owner six months to come back to pay those back due taxes, thereby cancelling your deed as if it never even existed. And of course, you would get your money back in that scenario.
So the answer to your question is for most cases, once you buy the piece of property and once the piece of property is in your name after you’ve purchased it at tax sale, they will not be able to get the property back, with the exception being those redeemable deed states.
Joel, I hope this has answered your question. If you have a follow-up question or if anybody else has any questions about tax sale investing, head on over to my website at TheTaxSaleAcademy.com, which you can do by clicking the blue link at the bottom of this video. Once you get there, go ahead and submit your question to me, and it’s very possible I’ll give you a video response just like this one.
Have a great day, folks! Take care. Bye-bye.