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 Common Legal Issues in Tax Sale Property Purchases and How To Address Them

Investing in tax sale properties can offer substantial rewards and amazing opportunities for real estate investors. However, choosing this path also brings its own set of risks, challenges, and potential legal pitfalls.

Below are some of the common legal issues we have encountered in tax sale property purchases and a few suggestions on how to handle them.

Title Issues

When buying a property at a tax sale, many buyers fail to check for issues or encumbrances on the title prior to purchase. All these need to be addressed before closing on the sale in order for the buyer to obtain a clear title.

Make sure to conduct a comprehensive title search before the purchase to identify any existing liens, encumbrances, or ownership disputes. It also helps to purchase title insurance to protect against unforeseen title defects and financial losses.

An experienced tax lien foreclosure attorney will be able to help you navigate this process with ease.

Tax Liens or Unpaid Taxes

Tax liens can also be an issue in tax sale property purchases. A tax lien is a claim made by a government agency against a piece of property if taxes have not been paid on it.

You need to be aware of any outstanding taxes and make sure they are paid prior to closing on the purchase. In-depth research is essential. If tax liens still escape your notice, the best solution is to consult a Maryland tax lien attorney for legal advice and assistance.

Zoning Restrictions

Zoning restrictions dictate how properties can be used and developed. Buyers must ensure that their intended use of the property complies with local zoning laws prior to purchase. Failure to do so could result in fines or even force you to abandon your plans altogether.

To prevent such issues, check with local planning and zoning departments to understand the property’s permitted uses and potential limitations. Consider getting a survey or talking with a land-use consultant to confirm the property’s zoning compliance.

Eviction Proceedings

Another potential legal issue with tax sale properties are eviction proceedings. Tax sale properties might be occupied by tenants or previous owners who haven’t vacated the premises.

Former owners who have not properly notified tenants of the impending sale or owners who have not vacated even after sale proceedings can both lead to large issues. Before doing anything, make sure to check local laws and regulations regarding tenant rights and eviction procedures.

The Bottom Line

If you want to legally gain possession of a property without breaking any applicable laws or regulations, doing due diligence is crucial. This includes consulting a reputable and skilled legal professional to help you identify legal issues in tax sale property purchases.

In each of these cases, seeking legal advice from an experienced Maryland tax sale attorney can help resolve complicated tax sale issues as well as prevent falling into such pitfalls in the first place. Contact us today to learn more!

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