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 Tax Sale Certificates Assignable Until Deed Issues

Many successful bidders in Maryland look forward to owning a property after a foreclosure judgment. However, there are a good number of tax sale buyers who get “cold feet” between the sale and judgment. For this group of people, the ability to pass property rights and liabilities to an assignee is perfect.

On May 3, 2022, the Maryland Court of Appeals (now the Supreme Court of Maryland) ruled in favor of tax sale certificate assignments. According to their decision, tax sale certificates are assignable until the courts issue the deed for the purchased property.

Learn more about the court decision and what it means for you as a tax lien investor in Maryland.

More on The Supreme Court of Maryland’s Decision

Maryland’s Supreme Court ruled that tax sale certificate owners have a chance to assign their certificates to willing parties. According to the decision, the act of assignment is a right, as stipulated in TP § 14-821(a). TP § 14-821(a) has explicit provisions for the free assignment of tax lien certificates.

The “silence” of TP § 14-821(a) in regards to the assignment’s time frame seems to have created pushback from the High Courts and many bidders. The bill makes little to no mention of post-judgment assignment, which is a course of action several bidders wish to take for a variety of reasons.

As a staunch detractor of the decision, Judge Shirley M. Watts recognized that any imposed timeline may open the floodgates for “tax-avoiding schemes, misuse, and mischief.” Also, she and several other MD judges observed that placing a time frame on assigning tax sale certificates effectively goes against the freedom of a bidder to assign said certificates.

Nevertheless, the court has ruled that tax sale certificates may only be assignable between the time of the purchase and the foreclosure of the right to redemption.

What the Court Decision Means for You

The new court decision has implications for tax certificate holders. The most salient one is the time frame that limits when you can pass your certificates on to an assignee.

As of October 1, 2022, you can now assign your certificates after you’ve bought them. However, you can only do this until the courts issue a deed for the property. Once the court issues the deed and executes the foreclosure of the right of redemption, owners can no longer redeem the property, and you will take full ownership.

After the court makes its judgment and issues the deed, you may no longer pass your certificates to anyone.

Do You Have Questions About Tax Lien Assignments? Call a Maryland Tax Lien Attorney

The latest court decision is still in the early stages of its implementation. Time will tell what effects this will have on tax lien certificate holders and MD’s real estate industry as a whole.

If you have questions or need assistance with assigning tax lien certificates, call a Maryland tax sale attorney with a proven track record. Call us now at LewisMcDaniels.

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