What do you do after purchasing real estate at a tax sale?

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Each year, almost every county in Indiana holds at least one tax sale. Some people purchase real estate at a tax sale, think they got a great deal and that there are no further steps to take.

Unfortunately, that is not the case. The county will issue a “tax sale certificate” at the tax sale. The buyer must go through some more steps before getting the deed to the real estate.

First, a buyer must figure out each person having a substantial interest in the real estate. This includes the prior owner and certain creditors such as banks holding mortgages. A buyer will want to have a title company perform a title search to make sure all proper parties are included in the list.

After completing the title search, a notice needs sent to each person with a substantial interest in the property. There are certain time limits for when this notice must be sent. There are also a number of statutory requirements for what must be included in the content of the notice.

Any person may redeem the real estate within 1 year after the tax sale. The redeemer must pay money to the county and restore the real estate ownership back to the prior owner. The redemption price includes the amount of the tax sale price, interest and you may be entitled to reimbursement of attorney fees and title search fees.

If the property is not redeemed, the buyer must petition the court for a tax deed within 6 months after the expiration of the redemption period. Again, notice must be given to all interested parties. If there are no objections within 30 days after the petition is filed, the court will direct the county auditor to issue a tax deed to the buyer.

Unfortunately, this is still not the end of the road. Most title insurance companies will require the buyer to file a quiet title lawsuit against any person who may have a substantial interest in the real estate. A quiet title action is a lawsuit against everyone who may hold a claim on the real estate and its seeks the Court’s declaration of clear title.

The Law Office of Shannon G. Starr, LLC handles tax sale and quiet title cases. To learn more, or set up a consultation, contact Shannon at shannon@sgstarrlaw.com.

Disclaimer – The content of this article is intended to be general and informational in nature. It is advertising material and is not intended to be, nor is it, legal advice to or for any particular person, case or circumstance. Every situation is different and you should consult an attorney if you have any questions about your situation.