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 What Rights Do I Have After Purchasing a Tax Sale Property?

Having concrete knowledge about your rights, the laws, rules, and mandates when it comes to a tax sale property will give you a good idea of what to do next.

Lucky for you, there’s already a system established and a set of rules for you to follow, so all you need to do is to get acquainted with it. As someone who just purchased a tax lien or a tax sale property, you need to be mindful of both your rights and the rights of the homeowner.

Seeing this from both perspectives will set your expectations, inform you of what to prepare next, and at the same time, save yourself from all the hassle and potential financial burden. Let’s discuss this further.

What Is a Tax Sale?

Just as a quick review, a tax sale is when certain properties are put on sale by the government through an auction to fulfill unpaid taxes by the owner. There are two types of tax sales: a tax deed sale and a tax lien sale.

The tax deed sale is when the property itself is sold to the winning bid. The tax lien sale is when the winning bid is granted a lien to the property thus acquiring interest. Tax liens are investment tools with proven, predictable returns on investment.

What Can the Homeowner Do?

As someone who just purchased a property from a tax sale, it’s important to know what the original homeowner can do to know what to expect in the foreseeable future.

There is what we call the redemption period. Take note that redemption periods vary from one area to another. The redemption period is essentially a chance for the homeowner to get their property back before the bidder is given the chance to block them from doing so.

The homeowner is then obliged to pay the amount paid during the tax sale, interests, penalties, and any accrued taxes.

Redemption done after four months from the sale requires the homeowner to pay the bidder with the expenses from the certificate of sale and attorney’s fees.

What You Can Do

Now you know that you need to give the original owner time to redeem their property, what’s next? You wait for the statutory redemption period and then you can file a foreclosure to the right of the owner to redeem the property.

The foreclosure cannot be filed after two years from the sale, so you also have to move fast. This is your chance to have the full title of the property. Is the owner allowed to live on the property in this whole process? Yes, if it’s still within the redemption period.

Just be sure to file the civil action case on the property before two years or the certificate of sale may be voided. As the bidder, you will lose the rights to the property or to any reimbursement. The property can then be auctioned again.

Maryland Tax Lien Attorneys

Please do take note that the county does not handle nor initiate any foreclosing procedures. You’re going to have to get your own legal counsel for this matter. Luckily, LewisMcDaniels has got the best Maryland tax sale attorneys available to help you out. We’re just one phone call away.

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