If you’re considering investing in tax lien properties, it’s crucial to understand the local tax lien laws and regulations that govern this process. Tax lien investments can offer unique opportunities to earn substantial returns on your investment, but they also come with certain risks and legal complexities. By familiarizing yourself with the laws and regulations in your local area, you can ensure that you’re making informed decisions and avoid potential legal pitfalls.
This blog post from LewisMcDaniels will focus on tax lien investments and explore the specific laws and regulations in Maryland.
Understanding Maryland Tax Lien Laws
Local tax lien laws and regulations vary from one state or county to another. In Maryland, for example, there’s a specific timeline and process governing tax lien sales. Understanding these laws is essential for any investor seeking a profitable tax lien investment.
The Tax Lien Sale Process
Any unpaid property taxes create a lien on the property from the due date until its full payment. The lien, like a mortgage, represents a debt tied to the property, including county-specific charges. State law obligates the county’s tax collector to sell these tax liens. The tax liens come as tax lien certificates and are available through a tax sale.
Tax sales are public auctions where tax lien certificates go to the highest bidder, guided by each county’s bidding rules. The sale transfers the county’s lien on the property to the purchaser. However, it’s important to note that the auction sells the unpaid debt and fees, not the actual property. The homeowner retains ownership of the property post-sale.
The purchaser effectively buys the debt owed and acquires a right to foreclose on the property if the owner fails to clear the debt within a specific timeframe. After the tax auction, homeowners can still “redeem” their property by settling the debt listed in the lien certificate.
Maryland Tax Lien Timeline
To provide a clear understanding of the process, let’s go through a typical tax lien timeline in Maryland:
- April 1: First list of tax sale properties
- June 4: Online tax lien auction and procedures
- July 1: Tax certificates from the tax office
- September 5: Title work for each property and the first round of notices
- September 29: Second round of notices
- November 5: Complaint eligible for filing
- January 20: Complaint filed to seek foreclosure of the right of redemption
- February 1: The court sends the Order of Publication, a Notice to Interested Parties, and a summons for each defendant.
- June 1: The certificate holder files a Motion for Judgment and Affidavit of Compliance.
- July 1: The court issues a judgment, foreclosing the right of redemption and giving the property’s title to the certificate holder.
- August 1: The tax office sends notice when the deed is ready.
Tax Lien Laws and Regulations in Maryland
Investing in tax lien properties can be a lucrative venture if done with care and following the local tax lien laws. For expert guidance, consult a Maryland tax lien attorney to ensure you navigate this intricate process successfully.
LewisMcDaniels can provide you with tax lien information to protect your investment. Contact us today for legal advice and assistance.
