If you are looking for an investment opportunity or a different home at a deeply discounted price then the county tax sale might be the right place for you. Many people are aware that county tax sales are a great opportunity to purchase investment properties at discounted prices, but most do not realize the steps involved between bid and ultimate ownership.
Be aware that even though a tax sale certificate is obtained at the Tax Sale, that certificate does not convey ownership of the property. Until a tax deed for the property is issued by court order, the purchaser does not have any right to take possession of the property.
In the first 30 days after the Tax Sale, the owner of the property may redeem the property and the purchaser is not entitled to reimbursement for attorney fees and title search costs.
After the 30 days, the owner may redeem the property during the redemption period (within one year of the Tax Sale), but they must pay additional funds which are to help supplement attorney fees or title search costs incurred by the purchaser.
Thirty days after the tax sale, a title search must be ordered. A title search is necessary because all parties having an interest in the property must be notified of the sale within 90 days of purchase in accordance with Indiana Code §6-1.1-25. Around the same time, form 137B (Statement of Cost Paid on Tax Sale Property) must be filed with the County Auditor. This form will need to be filed again anytime subsequent taxes are paid on the property, which is required in order to eventually obtain title to the real estate.
What if the previous property owner redeems the property?
The original Tax Sale Certificate must be taken to the County Auditor. The Auditor will handle refunding the money paid by the purchaser plus payment of penalties owed to them. In this case, the purchaser doesn’t get the property, but they do get some extra cash.
What if the previous property owner does not redeem the property?
If the property is not redeemed, notice must be sent to all interested parties, as listed on the title report, informing them that a Verified Petition for Issuance of Tax Deed will be filed with the appropriate Court. The notices must be sent before the Petition is filed with the Court; both of these actions must take place within 6 months after the expiration of the redemption period.
Once the Verified Petition for Issuance of Tax Deed is filed, any person owning or having an interest in the tract or real property may file a written objection to the Petition with the Court no later than 30 days after the Petition is filed. If an objection is filed, the Court will set a hearing. If no objection is filed, the Court may or may not set a hearing. The Court must rule upon the Petition within 61 days of filing.
If there are no objections or the Court overrules the objection(s), the Court will issue an Order instructing the County Auditor to prepare the Tax Deed. The Tax Deed, a sales disclosure form, and the original Tax Sale Certificate must be taken to the County Auditor for approval and signing. Then the deed must be recorded with the County Recorder. Once recorded, the property belongs to the purchaser, subject to all liens.
What happens to those properties not purchased at the County Tax Sale?
In Indiana, the County Board of Commissioners is issued tax certificates for all properties that were not sold at the County Tax Sale.
IC 6-1.1-24-6.1 allows the commissioners to establish an even further discounted price in an attempt to sell the certificates of the unsold parcels for less than the amount required at the Tax Sale. The list of parcels and reduced minimum bids are published in the local paper for three (3) consecutive weeks at least thirty (30) days prior to the Commissioners’ Certificate Sale.
The purchaser of the certificate must complete the same requirements as a purchaser of a tax sale certificate, however, the redemption period for the owner is 120 days as opposed to the one year redemption period used in the case of the County Tax Sale.
As you can see, what seems like a simple process is actually quite complicated. If you are interested in purchasing properties at a county tax sale or if you already have, we highly encourage you to contact us so we can handle the legal notice requirements and follow up for you. We at Gutwein Law welcome the opportunity to work with you on your next property buying adventure.
ABOUT THE AUTHOR – BROOKE PEREZ
Brooke Perez is a litigation paralegal at Gutwein Law. She has her BA from Purdue University and her AAS in Paralegal Studies from Ivy Tech.
