The REAL Truth about Buying Florida Property Tax Liens

Saturday’s News-Journal carried a syndicated article titled ‘’Know the risks when buying tax liens,’’ Its authors apparently are not from Florida. That’s why they got almost everything wrong.

Palm Coast, FL – March 11, 2013 – Saturday’s News-Journal carried a syndicated article titled ‘’Know the risks when buying tax liens.” Its authors are apparently not from Florida. That’s why they got almost everything wrong. Florida readers will be misled.  Learn more about buying Florida property tax liens
Real estate and property taxes are tricky topics for journalists. They tend to be state specific. A generalization true in one state is often false in another. Those moving to Florida from another state are almost foreign nationals when confronted with Florida’s laws. The same can be said for journalists. Leave your generalizations behind. Welcome to Florida.
So if you read the N-J article, erase it from your mind. Its writers were not talking about Florida (except for the risk part). Florida has its own way of handling delinquent taxes, tax certificates (tax liens), and tax deed sales. It’s really a pretty efficient system. Here’s a condensed version.

Delinquent taxes
2012 property taxes will become delinquent on April 1, 2013. If taxes remain unpaid by the end of April, they will be advertised three times in the newspaper during the month of May. Even if you pay the taxes on April 4th, your name and delinquent tax amount will remain on the advertised list.

Tax Certificates
Beginning on or before June 1st, the Tax Collector is required by law to hold a tax certificate sale. The certificates represent liens on all unpaid 2012 taxes on real estate properties. The sale allows citizens to buy certificates by paying off the year’s owed tax debt. The sale is conducted in reverse auction style with participants bidding downward on interest rates starting at 18%. The certificate is awarded to the lowest bidder. A tax certificate earns a minimum of 5% interest to the investor until the interest has accrued to greater than 5%, with the exception of “zero” interest bids, which always earn “zero” interest.

A tax certificate, when purchased, becomes an enforceable first lien against the real estate. The certificate holder is actually paying the taxes for a property owner in exchange for a competitive bid rate of return on his investment. In order to remove the lien, the property owner must pay the Tax Collector all delinquent taxes plus accrued interest, penalties, and advertising fees. The Tax Collector then notifies the certificate holder of any certificates redeemed and a redemption check is issued to the certificate holder.
A tax certificate is valid and transferrable for seven years from the date of issuance. The holder may apply for a tax deed sale when two or more years have elapsed since the date of delinquency. The applicant must pay (redeem) all other outstanding tax certificates related to the property plus pay a small administrative fee. Remember, a tax certificate covers only one year of delinquent taxes. A single property could amass several tax certificates; one for each year of unredeemed delinquency. If the property owner fails to pay the tax debt, the property Tax Deed is sold at an advertised public auction.

Tax Deed
As with foreclosure sales, tax deed sales are conducted at the office of the Clerk of Court. The opening bid for the non-homesteaded property is set at the total of all accrued unpaid taxes, interest, penalties, advertising costs and administrative fees to the date of sale. For homesteaded property, the opening bid is the total of accrued amounts plus one-half of the assessed value of the property.

The property owner can redeem the certificate, stopping the sale at any time up to the moment the sale begins. A Tax Deed is issued to the highest bidder. The certificate holder may be a bidder.

Do your homework. Do not buy tax certificates or participate in a tax deed sale without having consulted with an attorney. If the property turns out to be worthless, you might end up owning it. I saw one pair of “investors” buy a boat slip when they thought they were buying a marina condominium. After seven years, tax certificates expire. That means that they become useless. The following cautions can be found on the Clerk of Court website Q&A page:

Some liens are dischargeable and others are not. It is best to seek legal advice before making a bid. For further information regarding liens, see Florida Statutes, Chapter 197.
A title obtained by a tax deed is not generally acceptable and contains certain risks. It is best to consult an attorney or title insurance company regarding what steps should be taken before you build on or sell the property, even though the property is recorded in your name as the tax deed purchaser.
Buyer’s Due Diligence
It is wise to check the property thoroughly prior to the sale, to know exactly what you are getting. Tax Deeds are one of the few types of deeds that the old principle of “buyer beware” still applies to. There are no warranties or representations made by the Clerk as to the quality or character of the title you receive. Such matters as access to the property, zoning, and whether the lot is a buildable lot are outside the scope of the duties and responsibilities of the Clerk. These matters as well as many others are issues that the high bidder accepts responsibility for and the obligation to resolve and are not considered or the duty of the Clerk to resolve, investigate, or determine.
If you have any questions, contact:

Flagler County Tax Deed Department


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  1. […] Additionally, tax liens can negatively impact an individual’s credit score and make it challenging to obtain loans or credit in the future. To remove a tax lien from a property, owners must settle their outstanding tax debt with interest and penalties. [6, 7] […]

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