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Last week I talked about buying a tax certificate in Indiana at a Commissioners Certificate Sale. These are unsold properties from the annual tax lien sale that were certified to the Board of Commissioners and have only a 120-day redemption period (vs. 1 year for those sold at the annual sale). As promised, this week I’ll talk about the process for foreclosing on certificates that are not redeemed.
Not less than 30 prior to the expiration of the redemption period (which is 120 days from the date of sale), the purchaser must send a Notice of Sale to the legal owner and any persons with a substantial interest of public record in the property that a lien has been sold on their property. The buyer must initiate a title search on the property to identify the owner and other interested parties.
The Notice must include all the information required by state law (see Indiana Code 6-1.1-25-4.5). The notice must be by certified mail and other reasonable efforts to notify the owner. If the property is redeemed, the owner will be required to reimburse the buyer for his/her actual paid title search expenses, not exceeding the amount established by the county, if the buyer files a form 137B with the Auditor prior to the redemption date. If the buyer fails to provide notice or provides insufficient notice as required by IC 6-1.1-25-4.5, the Court may impose a penalty equal to 100% of the purchase price.
The buyer must present a verified petition to the court that issued the original judgment for delinquent taxes and penalties on the property asking the Court to order the County Auditor to issue a Tax Deed if the property is not redeemed from the sale by the redemption period expiration date. If the buyer fails to fulfill the requirements for issuance of a court order directing the Auditor to issue a tax deed, the Court may impose a penalty equal to 25% of the purchase price and refuse to accept the purchaser’s petition for a deed under IC 6-1.1-25-4.6.
The next steps in the foreclosure process are as follows:
- Present the court with proof that the time for redemption has expired. Also provide copies of all notices given to the owner and any person with a substantial interest in the property, including supporting documents (postal certified mail receipts, etc.).
- Present the Court with evidence of payment of all taxes, assessments, penalties and costs, both at sale and subsequent thereto, and other evidence of compliance with statutory requirements as the court may require.
- Present the Court with a copy of the Tax Sale Certificate.
- Receive a Court Order directing the County Auditor to prepare the tax deed.
- Present the Court Order and Tax Sale Certificate to the County Auditor and receive the tax deed for the property within 30 days.
You can go through the process yourself, or retain the services of an attorney familiar with the state requirements. If you are doing it yourself, be sure to check the relevant portions of the Indiana Code for specific details on this process.
Happy investing!
Michael Williams
816-673-1874
Rogue Real Estate Investor Collection
Don’t miss out on upcoming Commissioners Certificate sales in Indiana, with their shortened redemption period!
The County Board of Commissioners is issued a tax sale certificate for all properties where the lien was not sold at the annual tax sale. Indiana law allows the Commissioners to have a second sale to try and sell these parcels. Also referred to as “expedited” or “B” sales, the period of redemption on these liens is shortened to 120 days (vs. 1 year) for the property owner and the buyer can receive a tax deed more quickly.
The governing state law for tax sales is found within Title 6 of the Indiana Code (IC) – Taxation: Article 1.1 – Property Taxes, Chapter 24 – Sale of Real Property When Taxes or Special Assessments Become Delinquent; and Chapter 25 – Redemption of and Tax Deeds for Real Property Sold for Delinquent Taxes and Special Assessments
Most of these sales are public, but SRI Incorporated conducts online Commissioner’s certificate sales for several counties in Indiana. SRI can be reached at 317-842-5818 or http://www.sri-taxsale.com/Tax/Default.aspx.
The certificate list must be published once each week for three consecutive weeks, with the final advertisement being not less than 30 days before the sale date.
The Commissioners are allowed to sell a tax sale certificate for an amount that is less than the minimum sale price that was required at the previous tax sale, and which includes any costs directly attributable to the sale of the tax lien certificate. The amount is set by county resolution. In a “B” sale, the minimum bid will include an estimate of the May tax installment.
The purchaser will receive a Tax Sale Certificate signed by the County Auditor and County Treasurer. The property may be redeemed at any time within 120 days from the sale date.
During the period between the tax sale date and the expiration of the redemption period and prior to the issuance of a deed, the buyer may pay all taxes, assessments, penalties and costs due for the property. Immediately upon paying for any additional costs, etc., the buyer should report the payment to the County Auditor's office with the receipts to record them. These costs must be filed on a Form 137B. The buyer will not be reimbursed unless he/she follows this procedure. Any costs incurred for notification and title search will not be reimbursed for an amount exceeding that set forth by the county.
When a tax sale property is redeemed, the Auditor will notify the purchaser and ask that the Tax Sale Certificate be delivered to the Auditor's office.
Once the Tax Sale Certificate is received by the Auditor, the purchaser will receive a refund equal to 110% of the minimum sale price and 10% per annum of the amount by which the purchase price exceeds the minimum sale price. In addition to the amounts stated above, the buyer will receive a refund for all taxes and special assessments on the property paid by the buyer subsequent to the sale plus 10% per annum interest on those taxes and special assessments.
Here is a list of upcoming Commissioner’s certificate sales:
JUNE 2011
Vermillion County, Indiana
June 16-27, 2011
Tax liens – internet
http://www.sri-taxsale.com/County/VERMILLION
Tippecanoe County, Indiana
June 17-27, 2011
Tax liens – internet
http://www.sri-taxsale.com/Commissioner/OnlineCertificateSaleList.aspx?county=Tippecanoe&event=0000000094&starts=2011-06-17T10:00:00&ends=2011-06-27T08:00:00
Noble County, Indiana
June 30, 2011
Tax liens – public
http://www.sri-taxsale.com/Commissioner/LiveCertificateSaleList.aspx?county=Noble&location=Noble%20County%20Commissioners%20Room%20-%202nd%20Floor%20Courthouse&starts=2011-06-30T10:00:00
Shelby County, Indiana
June 30, 2011
Tax liens – public
http://www.sri-taxsale.com/County/SHELBY
AUGUST 2011
Madison County, Indiana
August 3, 2011
Tax liens – public
http://www.sri-taxsale.com/County/Madison
Jennings County, Indiana
August 22, 2011
Tax liens – public
http://www.sri-taxsale.com/County/Jennings
Next week I’ll talk about the process for foreclosing on a certificate that was not redeemed.
If you would like to learn more about tax lien certificate and tax deed investing, click here.
Happy Investing!
Michael Williams
816-673-1874
