Q: From time to time, I see advertisements in the paper for property being sold due to unpaid property taxes. I want to bid on a property and I am wondering if there is any risk?
A: There is substantial risk in purchasing at a tax deed sale without a thorough investigation. Under Florida Statutes, property can be sold by the Clerk of Courts when ad valorem property taxes are more than two years past due.
For unpaid property taxes, the Tax Collector auctions tax certificates shortly after the taxes become delinquent. Bidding on the tax certificate includes the unpaid taxes, cost of sale and is a process by which bidders start bidding based upon an interest rate, with the low bidder winning.
The certificate is like a certificate of deposit. If it is not redeemed within two years, the holder may file the certificate along with an application for a tax deed with the Tax Collector. After that time, the Tax Collector and the Clerk of Courts conduct a sale unless the certificate is redeemed by paying the unpaid taxes, interest and costs.
The Tax Collector is required to search the county’s real estate record and provide the Clerk with name and address of any owner appearing in the conveyancing records along with the name and address of the owner as it appears on the most recent tax roll.
The Tax Collector is also to provide the Clerk with name and address of any other lien holders, purchasers under recorded contract and others specified by statute who may have an interest in the property.
The Clerk is required to send notice of the tax deed sale by certified mail to each person listed on the statement from the Tax Collector.
Over the years, Florida courts have upheld tax deed sales where notice was never received, including where the name of the tax payer was incorrectly spelled and notice was sent to an old address and even where the Tax Collector and Clerk failed to update the property owner’s address.
Florida tax deed sales have even been approved by the courts where notice was returned stamped “Return to sender — attempted not known”, “undeliverable” and “undeliverable as addressed.”
In 2006, the United States Supreme Court decided that due process requires more than merely sending notice in accordance with the statute. In the case of Jones v. Flowers, the court held that, where return receipts are used for providing notice and the notice is returned unclaimed, the Government must take additional reasonable steps to attempt notice to the property owner.
In reaching that conclusion, the court refused to make the taxpayer responsible for updating his or her address or charging the taxpayer with notice that the property was subject to sale because the tax payer did not pay property taxes.
After the Jones decision, Florida’s Supreme Court had opportunity to revisit this area in the case of Vosilla v. Rosado. In that case, the Rosados twice advised the taxing authority of their change of address — once in 1998 and once in 2000. Approximately four months after the second notice of address change, notice of tax deed sale was sent to the old address.
Notice to the old address was sent by certified mail and signed for by someone other than the Rosados. In addition, the Sheriff gave written notice to the Clerk prior to the date of the tax deed sale that the Rosados no longer resided at the old address.
The court held that the notice sent to the Rosados was not reasonably calculated to apprise them of the tax deed sale. Under the facts of that case, due process required the Clerk to take additional steps to notify the Rosados, such as checking to determine whether a change of address had been submitted.
Since notice was Constitutionally invalid, the sale was reversed, leaving the buyer with a problem.
If you intend to proceed with purchase at a tax deed sale, it would be prudent to retain an experienced attorney to review the court records and files. Even with a thorough review, the attorney may not uncover notice documents like those in Rosados’ case.
William G. Morris is a lawyer with offices at 247 N. Collier Blvd., Marco Island. The column is not intended to be legal advice for specific circumstances. General questions can be sent by e-mail to firstname.lastname@example.org or by fax to (239) 642-0722. Read other columns at http://www.wgmorris.com.