Purchasing tax deed properties offers real estate investors a great way to obtain desirable properties at a price usually much lower than market value. While these properties present great investment opportunities, it’s important for investors to realize the risk associated with purchasing real estate in this manner. One common issue with tax deed purchases is a blemished or clouded title.

There are limited ways through which investors can obtain a clean title when purchasing tax deed sales. Understanding the pros and cons of each will help you make better investment decisions in the future.

Tax Deed Sales Defined

A tax deed sale happens when the owner fails to pay property taxes. Properties are offered for sale at public auctions as a way to collect the outstanding debts. In most cases, the tax lien is a higher priority than other existing liens on the property and the other liens will be extinguished at the time of purchase. For example, since mortgages are lower priority than tax liens, the mortgage will be extinguished and will not become the new owner’s responsibility.

Tax deed sales may come with other liens on the property which can be found by researching the current title history of the parcel prior to purchasing. Tax Deed sales are BUYER BEWARE sale and some liens are not extinguished from title such as municipality liens (i.e. code enforcement, special assessments, etc.). While these debts are not your own, purchasing the property and inheriting the title makes you financially liable to repay them. 

Action to Quiet Title on Tax Deed Sale

One way to ensure the title on your property is clear is by hiring an attorney and filing a quiet title action through the court system. An action to quiet title is a court case that names all parties holding an interest in the property at the time of the tax deed sale as Defendants, and they are given an opportunity to challenge the sale at the time of hearing. If there are no challenges, the court will offer a judgment in favor of the tax sale purchaser which legally extinguishes all prior parties / defendants from holding any further interest in the property.

Actions to quiet title are effective, however, they can become quite expensive. Additionally, they can take up to a year to complete as the case often becomes subject to countless attorney and court delays. 

Title Certification for Tax Deed Properties

The alternative to a quiet title suit is title certification through Tax Title Services. A tax title curative consultant will review and verify the completeness and accuracy of the tax sale foreclosure process and upon verification, the consultant will partner you with a title insurance agent who will offer you a title policy which offers you protection from unexpected financial or legal obligations and unforeseen title challenges.

This alternative is much less expensive than filing an action to quiet title, and the entire certification can be completed in as little as four weeks! Choosing this method saves you both time and money, allowing you to have a clear title faster and offering continued protection for years to come.

Getting a Clean Title for Your Tax Deed Property

Tax Title Services offers customers the benefit of our unique certification process and clearing your title in no time. Our consultants perform a thorough review of the tax sale foreclosure statutes, statutory requirements and due process accuracy for your property and we partner you with nationally recognized title insurance underwriters who will provide you with title insurance in order to protect your investment.

Don’t inherit someone else’s debt. Contact TTS to find out more about our certification process and obtaining title insurance for your tax deed property.