Another fact, Property tax bills comes due by March 31st in Florida and if they are not paid by then they are considered delinquent and could be sold at a public auction after 2 years. So what happens if a homeowner or lender doesn’t know their property taxes are due?
The tax assessors send tax bills to homeowners annually. If you haven’t received your property tax bill, or if your address differs from the one shown on your tax bill and you have a permanent change of address, you need to contact the county to update your mailing address. As investors we sometimes want to maintain our privacy but the tax bill is one area you want to make sure ‘the man’ knows exactly how to find you to deliver the bill and any other notices.
When a property has become so far delinquent that it is headed to the tax deed sale, the county sends out warning letters containing the notice of the auction. The letters go the property’s owners’ last known mailing address as well as other interested parties (lien holders). Although some counties will go the extra mile to research further if a property owners’ correct address, they are not required to bend over backwards to do this additional research.
Homeowners who fail to update their address will not get the tax bill nor the all important Notice of the Auction. This can pose an interesting problem for bidders at the auction. Bidders have to ascertain whether or not the county properly notified the owner in order to prevent the homeowner’s from challenging the sale later. Most counties have been conducting these sales for 100 years or more and are pretty good at notifying the owners and interested parties.
Part of the process involves: Advertising in the local public notice newspaper for several weeks prior to the public auction; It also involves sending regular mail and/or certified mail notices of the sale; There are times when a sheriff’s deputy is sent to serve the ‘interested parties’ with the official warning letter.
The warning letter contains the location of auction, amount of taxes owed, how to payoff the taxes (redeem) as well as how to make the payment to prevent the sale. Buying at the tax deed auction requires that bidders understand the Notification process in order to get marketable title later.
Tax collectors in Florida send out tax bills in October and offers discounts if the taxes are paid early:
4% discount if paid in November
3% discount if paid in December
2% discount if paid in January
1% discount if paid in February
The gross amount is due in March
*Answers: 1)Warren Buffett 2) The Spring
This is an en example of what some of the clerk’s offices are using as an Ownership and Encumbrance Report. If you don’t know what the Ownership and Encumbrance report is (aka O&E Report), it is on e of the most important documents in any tax deed file.
On our last tax deed field trip one of my students was a real self-starter and looked at the file a few days earlier on her own. Only problem she could find was the she couldn’t not find the title search submitted from the title company. That is because many of the counties are changing the format they use for the O&E report.
**********Click here for the new format. At the very bottom on the right is what tells you it is really from a title company. Can you see what that is?
Originally posted to Blog on 8/28/2009
Originally posted to Blog on 8/25/2009
This is the other side of that ugly coin that has ‘Paralyses of Analysis’ on the opposite end. I don’t know which is worse; In the long run you loose money with both. As much as I ‘preach’ to investors to make sure you know what you are bidding on, I still come across people who jump in head first and bid on a piece of property without doing their homework. One of them attended my class and this person was so excited about doing a deal that this investor neglected to do the proper tax deed due diligence and is now banned from bidding in 2 counties for not paying for the properties won at the auction. When you don’t pay for your property after winning the bid most counties will bad you from bidding on future sales. This investor was lucky and was only temporarily banned but this resulted in forfeiting $400 worth of auction deposits. This is the same person who tried to buy tax deeds without the home study course. I just haven’t had the heart to tell this investor, the home study course would have cost less than the $400 lost in auction deposits not to mention saved the investor the humiliation and anxiety those deals caused.
Originally published in Blog on 6/26/2009