The Last Time My Home Was Sold For Back Taxes It Took 9 Months To Get It Back

[ThomWV]

I write this to inform anyone who finds their home being sold for back taxes what they might expect. I hope it eases some of the anxiety that anyone would feel if they were facing this for the first time My home and other properties my wife and I own have been sold for back taxes more than once and may be again some day. I am not a lawyer, I'm simply going to explain how it works in West Virginia and to the best of my knowledge its very similar in other states. If you know your state to handel this differently please respond and explain.

First off this is just about real estate sold for delinquent property taxes. In this state tax bills are issued in July for the preceding fiscal year and payment, which is made to the individual counties, may be made with no penalty within a several month period and with a small interest charge after some date. However all are due before the next tax year. Of course the owner can go to the Courthouse and pay the taxes plus any interest due during this period.

After a tax year has passed the owner of the property is notified by registered letter that their property will be offered up for sale 'on the Courthouse steps' on some date, generally in November. A service fee in addition to the taxes due is charged with the letter is sent and at the same time the property and taxes due will be included in a newspaper advertisement for the upcoming sale. The owner still can go to the Courthouse and pay the bill right up to the day of the sale.

Then comes the sale. I have been to several, they don't actually take place on the steps - though they could. Every one I have been to has been moved indoors, generally in an unused courtroom or in the hallway. Its just like any auction other than that the opening bid will be the amount of the taxes due and if no bids are received the state will be the default bidder at that price. If you go to the sale and your property comes up - and I have seen this happen more than once - and the moment the bidding opens you yell out "that's my property and I want to bid the opening price to get my house back" you will probably notice that nobody will bid against you and the Auctioneer will bang the gavel down real fast. Nobody is going to try to steal your house away right from under you. However you'll have to pay up with cash or certified check within hours.

So, let us say someone has bought your home at the auction. Now what? Well, first off you do not get tossed out into the street.

What the person who bid the highest got at the auction was not your property, what they got was a lien on your property. At the end of the auction the high bidder will get a lien that entitles them to come back to the court one year later and petition for a clean deed. However during that 1 year the bidder must relinquish the lien to you - the property owner - if you pay the amount of the lien (the high bid amount) plus 1% interest per month for the duration of the lien. That eliminates the lien but there is more.

Let me back up and tell you how it works if you are trying to buy your property back. After the sale you go to the Courthouse and tell them you want to buy your property back. They tell you who bought it and give you a release you have to get the buyer to sign. You then have to find the buyer, pay them the amount of the lien plus interest (1% per month on the bid amount in this state) and they sign the release. You then take the signed release back to the Courthouse where something every interesting happens. First off your debt to the state and the tax sale gets wiped off the books (except for an historic marker) and the property returns to your ownership - which it actually never left. Then the clerk will issue you a check for the difference between whatever the actual taxes due on the date of the sale were and the amount bid. I want you to understand this, you are liable for the amount of the taxes and the interest on the high bid, but you are not responsible for paying the difference between the taxes due and the high bid; although you will be required to pay interest on that amount. That might surprise you but it shouldn't. The state will not put you in a bidding contest for your own property - you always have the right to buy it back for the taxes due plus interest, right up until the last day.

If you can not find the high bidder you can go back to the Courthouse and tell them so and make the payment to them as if they were the bidder and they, the Courthouse clerks, will complete the transaction. However if you do nothing and the year comes to an end the high bidder can have their lien converted to a free and clear deed by the state and then you're out; the day that happens is 'the last day' and you lose any right to your property. However remember it took a year's delinquency before the tax sale and another year after the sale before this step can begin - and you can redeem your property at any time during that process.

In the worst case you have to come up with the bid amount plus interest, a portion of which will be refunded to you at the Courthouse but if the bidder can not be found or will not sign off you can simply go to the Courthouse and pay the lessor amount of the original taxes due plus any interest and penalties due the state prior to the tax sale plus interest due on the bid amount from the tax sale. All payments will have to be in cash or certified funds.

And so that is it. When it happens to you its a pain in the ass but you do not get tossed out onto the street and you have quite a bit of time (2 years here) in which to set things right. It is costly, but not insanely so. Here you will be on the hook for your taxes plus simple interest at a rate of 12% per year.