Purchasing Tax Deeds in Florida at a county tax deed auction can be an attractive way to acquire real property for significantly less than its fair market value. However, as the saying goes, “If it were easy, everyone would be doing it.” Purchasing a Tax Deed involves certain risks and ongoing obligations, making it a decision that should not be taken lightly. Prudence suggests engaging an attorney experienced in these matters to navigate the complexities.
Understanding Tax Deeds in Florida
What is a Tax Deed?
A Tax Deed is a legal document evidencing the county tax collector’s sale of a real estate parcel when a property owner fails to pay real estate taxes and associated fees. Once taxes become delinquent, the tax collector holds an auction to bring the outstanding taxes current by selling the property.
Can You Resell a Property Purchased via Tax Deed?
While reselling a property acquired through a Tax Deed auction may be tempting, it is more complex than it seems. Title acquired at a Tax Deed Sale is not immediately marketable. Claims from prior owners and potential lienholders must be extinguished before the title can be insured. Without title insurance, finding a buyer willing to purchase the property is highly unlikely.
How to Make Tax Deed Titles Marketable
Quiet Title Action vs. Waiting Four Years
The most direct method to make a Tax Deed title marketable is to file a Quiet Title Action. While a tax deed sale extinguishes most liens, some liens and claims may survive, such as when proper notice of the sale was not provided. A Quiet Title Action permanently terminates these “clouds” on the title, ensuring that prior owners and lienholders cannot assert claims against the property. This step is crucial for obtaining title insurance.
Alternatively, under Florida law, holding the property and paying taxes for at least four years may eliminate the need for a Quiet Title Action. However, this method comes with strict conditions:
- An adequately issued tax deed has been recorded for more than four years.
- The tax deed grantee has paid taxes on the property during that time.
- Proper notice of the tax deed sale was given to all required parties.
- No adverse claims or recorded actions have challenged the tax deed grantee’s ownership.
Ensuring Compliance with Tax Deed Requirements
An attorney experienced in tax deed sales can review the county tax deed file and conduct an independent title search to determine if all necessary conditions have been fulfilled. This evaluation increases the likelihood that a title insurance underwriter will insure the title, making the property marketable for resale.
Key Takeaways for Buyers Considering Tax Deeds
Purchasing a property at a tax deed sale involves significant risks and requires thorough due diligence. Understanding the process and consulting with a qualified real estate attorney can help mitigate potential pitfalls. Whether you pursue a Quiet Title Action or wait for the statutory four-year period, proper planning is essential to ensure a smooth and successful investment.
We recommend contacting a local real estate attorney for guidance on navigating tax deed purchases.
