I just bought a piece of real estate at a tax sale. What am I supposed to do now?

Once you have successfully purchased a parcel of real estate at a tax sale, you still do not “own” the property. You have applied for a “sales tax certificate”, which is similar to a bond against the property. To convert that sales tax certificate into a tax deed, you will need to do the following:

First, you will need to apply for the title job from an established real estate title company. The title company will examine local records to determine who might be an interested party in the real estate. This could be a tenant, a mortgagee, a lien creditor, anyone with an “interest” in the property.

You must then notify the property owner and all other interested parties of your purchase of the property in the tax sale by certified mail.

After the notice is given, there is usually a long waiting period until you can file your verified petition for the issuance of the tax deed. This is the “redemption period”, which generally lasts one year from the date of sale. During this period, the owner (or anyone else) can redeem the property by paying unpaid taxes, penalties, and other assessments. The redeeming party must also pay an amount equal to 10% of the money paid by you. At all times during the redemption period, it will be your responsibility to ensure that all property taxes are paid.

Because the property is redeemable, you should file a cost statement with the county auditor’s office as soon as possible. This statement will include a certification of costs spent, including title and attorneys’ fees. Once those costs are certified to the auditor, any reimbursable party must make payment of those costs prior to redemption. You will then be reimbursed for those costs if the property is redeemed.

After the expiration of the redemption period, if no refund has been made, you will file your verified petition for a tax deed with the county court. You will need to name all interested parties as parties to the petition. Assuming there are no objections from the interested parties, the court will order the issuance of your tax deed.

Please note that there are strict time limitations for each of these steps throughout the process. Failure to meet a deadline can mean the loss of your right to the tax deed.

Lastly, even after the tax deed is issued, there may still be work to do if you want to sell or mortgage the property. Most title companies will not secure title to property acquired through tax sale without a “silent title” lawsuit. A silent title lawsuit is a lawsuit filed in court in which the plaintiff asks the court to enter a judgment declaring his or her title to the property. Potential stakeholders have the right to object to the silent title. If the plaintiff wins, he usually gets a judgment stating that he is the rightful owner of the property. The judgment is final (although subject to appeal) and a negotiable title to the property will generally be awarded.