Are County Tax Liens A Way Of Life?
Taxes have been a way of life for the American people since the United States
was first founded. Taxes give government officials a way to raise the necessary
funds to pay for services that we "all" need and enjoy. Local municipalities
and state officials have often used real estate taxes to pay for much needed community-based
services as public schools, fire, police and hospital services, as well as parks
and community health care. Without these taxes, many of the services the public
depends on wouldn't be available due to a lack of funds.
When taxes go unpaid for a certain amount of time, the owner becomes delinquent,
which allows the local governing agency to legally seize or "lien,"
the property for the amount of back taxes due. This is usually handled by the
county tax collector. Once a lien is placed on a specific property, the homeowner
no longer officially "owns" it and is left unable to sell the property
(and oftentimes mortgage it further), without first paying the lien off in full.
Laws regarding property liens vary considerably from state to state. While
one state may allow a delinquent property owner to pay off the lien anytime
prior to public sale (even moments before an auction is slated to begin), without
further penalty, others require the process to continue to fruition once it
has begun. If left unpaid, the homeowner risks losing ownership of his/her property
permanently.
Once a lien has been placed on a specific property, it is then listed at the
county's next scheduled public tax lien auction sale. In some areas it can also
be sold outright by the tax office itself. The taxing authority may recoup lost
revenue from delinquent taxes by either offering the lien for sale as a tax
lien certificate, or a tax lien deed.
Tax lien certificate sales give the current property owner more time to find
the funds necessary to keep their property, by allowing outside investors to
pay off the tax debt (helping the local taxing authority recoup their losses),
with the understanding that the property owner will repay this new debt - with
interest - within a specified amount of time. If he fails to repay the investor
on time, then ownership of the property is transferred to the real estate investor.
Tax lien deed sales work a bit differently, by offering the actual property
at auction, with no waiting periods required for the highest bidder to take
possession of the property. Often reserved for extremely high overdue tax bills,
or habitual delinquency, the tax deed sale is a permanent foreclosure of the
house or land parcel from its current owner.
Any time a tax lien is placed on a property, the current owner risks losing
possession of the property. Liens can be placed shortly after failure to pay
the annual tax bill, or after several years worth of taxes go unpaid. This too,
is at the discretion of the local taxing authorities.
County Tax Lien Sale
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