A Case Study: Florida Tax Liens Part II
-Turning the lien into a deed
Continuing from last week's article, Florida Tax Liens Part I, the following steps take place once the investor has obtained a tax lien certificate. These steps explain how an investor can collect their funds or obtain ownership to a property.
Step1: Time Frame
In Florida, from the date of the tax lien auction an investor must wait
at least 22 months before they can take any action against the
property. If the property owner has not repaid the funds within this
time period the certificate holder can initiate a tax deed auction or a
tax foreclosure sale.
Step 2: Tax Deed Application
After the allotted time, the investor then submits what is called a tax
deed application to the county tax collector's department. The tax lien
holder must pay any other outstanding liens on the property and any
given auction fees. The full investment, plus fees will be reimbursed with interest after the tax sale.
Step 3: The Tax Deed Auction
Tax deed auctions are held on a monthly basis and are usually conducted
at the county court's office or the local government center. The
opening bid is normally the amount of the unpaid taxes. This however,
may not include all liens (such as IRS or mechanic's liens) but only the amount of the
certificate holder's investment. All liens against the property are the
responsibility of the highest bidder at the auction.
If the lien certificate holder would like to bid on the property they
must be present at the auction and bid amongst the other investors.
Unlike the tax lien sale, the tax deed sale is won by the highest
bidder. If an investor is the highest bidder, they must pay the bid in
full by the following morning. A deposit would be due at the time of
auction.
Step 4: Redemption Period
The property owner will only have about 24 hours to pay the delinquent
taxes after the sale has been conducted. After the redemption period
the winning bidder will be issued a tax deed.
Important Note: A title search is always recommended when bidding on a tax deed property as the tax deed does not guarantee a clear title.
Step 5: Ownership
Once the investor has been issued the tax deed, they legally own the
property and are free to either move-in or start repairs. If there are
residents inhabiting the property, the deed holder should contact the
Sheriff's Office.
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