TAX LIEN INFORMATION
1. WHAT ARE TAX CERTIFICATES?
A tax certificate transfers the state’s first and superior lien on a delinquent parcel to the purchaser of the certificate. The purchaser of a tax certificate holds only the lien against the property, has no legal right of ownership and has no contact with the property owner. The delinquent property taxes are offered by sale by selling tax certificates at a public auction. The person bidding the lowest rate of interest is the successful bidder. The tax certificate is valid for six years from the purchase date.
If it has not been redeemed or no action has been taken within the the six years, the certificate expires and the holder loses all rights associated with the tax certificate.
2. WHAT PROPERTIES ARE SOLD AT A TAX CERTIFICATE SALE
Any property the county treasurer offers for a tax certificate sale must be certified delinquent for at least one year under current law. Properties that are in bankruptcy or foreclosure will not be offered at the tax certificate sale. Property owners who participate in a Delinquent Tax Payment Plan and have paid their current taxes will not be a part of the tax certificate sale. A county treasurer has full discretion to select and remove a parcel or parcels set for sale. Parcels left off the Lien list are still vulnerable to normal foreclosure proceedings.
3. WHICH OHIO COUNTIES CAN OFFER TAX CERTIFICATE SALES?
All Ohio counties may offer tax certificate sales.
4. WHEN ARE TAX CERTIFICATE SALES HELD?
It is up to the county treasurer to determine when to hold a sale. At this time Hamilton County intends to have one sale a year, usually in October. The county treasurer is required to send written notice by certified or registered mail either to the owner or to all interested parties of each parcel selected for a tax certificate sale, and must advertise in a newspaper of general circulation in the county, once a week for two consecutive weeks. The advertisement must include the date, time, and place of the public auction, descriptions of the parcels and the names of the owners of record of the parcels.
5. WHY IS HAMILTON COUNTY SELLING TAX LIENS?
Hamilton County property owners have a duty and obligation to pay Real Estate Taxes. Real Estate Taxes are an important funding source for local schools and services provided by local governments. Property owners who do not pay their taxes pass this responsibility to those who do pay their taxes. The Tax Lien Sale provides immediate funding of past due tax dollars to the schools and local governments.
6. IF A TAX LIEN IS SOLD, WILL I LOSE MY PROPERTY?
No. The Treasurer’s office is not selling your home. It transfers the State’s lien on your property to a certificate holder. However, if the Lien, additional fees, and interest are not repaid within one year from the date of the sale, the Lien holder may start foreclosure proceedings. Repayment plans, if eligible, can be set up with Hamilton County. Lien repayment plans will be based on the number of months left in the 12 month period. The Lien repayment plan should be set up soon after the sale in order to keep payments at their minimum.
7. WHY ARE THERE ADDITIONAL FEES AND INTEREST ASSOCIATED WITH THE LIEN SALE?
Fees are charged to cover administrative costs the Hamilton County Treasurer incurs in having a Lien sale (mailings, advertising, tracking, etc.). Interest is paid directly to the Lien holder for their part in paying the delinquent tax.
8. HOW MUCH DO I OWE?
Contact the Hamilton County Treasurer’s office between 8:00 a.m. – 4:00 p.m. Monday through Friday by calling 946-4800. Include all priors and June in payoff amount.
9. WHAT CAN I DO TO GET MY PROPERTY OFF OF THE TAX LIEN SALE LIST?
To insure that your property will be removed from the Tax Lien Sale list, all taxes must be paid in full or if eligible, enter into a delinquent payment plan before the sale.
10. DOES HAMILTON COUNTY OFFER PAYMENT PLANS?
Yes. If eligible; before the Lien sale occurs the taxpayer may enter into a delinquent payment plan. To determine your eligibility contact the Hamilton County Treasurer’s office between 8:00 a.m. – 4:00 p.m. Monday through Friday by calling 946-4799. The payment plan, if eligible, would be made in person at the Hamilton County Treasurer’s office 138 E Court St Room 402.
11. WHO CONDUCTS THE SALES?
The county treasurer or a designee of the county treasurer must conduct the sale of tax certificates at a public auction.
12. WHAT IS THE PROCEDURE FOR SALE BY PUBLIC AUCTION?
A tax certificate sale by public auction may be conducted any time after completion of the county treasurer’s advertising of the sale.
Bidders at the auction are required to file a completed bidder registration form with the county treasurer prior to the start of the auction, along with
a $500 registration fee and a tax identification number (or social security number) of the registrant. All bidders must have 10% of the purchase price and a letter of financial standing. The registration fee has to be paid in cash, a certified check, a money order, a bank draft or an electronic transfer of funds. The registration fee is refundable at the end of the bidding on the day of the auction, unless the registrant is a winning bidder. Next, the sale would begin. A certificate purchase price means the amount equal to delinquent real estate taxes, assessments, penalties and interest and any other charges/fees charged against the parcel or parcels.
At the auction, the county treasurer or the treasurer’s designee is to begin the bidding at 18% per year simple interest and can accept lower bids in increments of 0.25% until a bid is accepted. The certificate is awarded to the person bidding the lowest certificate rate of interest. The successful bidder is required to pay the county treasurer a cash deposit (or certified check, money order, bank draft or electronic transfer of funds) of at least 10% of the certificate purchase price on the day of the sale. The bidder’s registration fee is applied toward the deposit. The balance and fiscal officer’s administrative fee must be paid within five business days after the day on which the certificate is sold. If the bidder fails to pay the balance and fee within five days, the deposit is forfeited and the treasurer retains the certificate. If a bidder doesn’t purchase a tax certificate, their deposit will be refunded.
13. IF A PURCHASER OF A TAX CERTIFICATE IS SUCCESSFUL WITH A BID OF 7.5%, HOW IS THE INTEREST APPLIED TO THE TAX CERTIFICATE?
The purchaser pays the county treasurer the tax certificate purchase price. Annual simple interest is applied the first day of each month from the purchase date.
Example: Tax Certificate Purchase Price: $3200.00 which includes Treasurer’s administrative fee and advertising cost. Bid interest rate of 7.5% = $240.00 yearly interest. Interest applied the first of each month $20.00. $20.00 would be added to the certificate purchase price on a monthly basis until the property owner redeems the tax certificate or until foreclosure action is initiated. If the tax certificate is not redeemed within the first year, simple interest will continue to be applied the first of each month for the life of the certificate, which is three years.
14. HOW LONG WILL INTEREST BE EARNED ON A CERTIFICATE PURCHASE?
The certificate holder is entitled to 7.5% interest earnings for the life of the certificate, which is three years. When the property owner redeems the certificate, the certificate holder is only entitled to the interest from the purchase date to the redemption date, or 6% of the certificate purchase price, whichever is greater.
The property owner has the right to enter into a Redemption Payment Plan within the first year. After a tax certificate is sold, the county treasurer is required to send a written notice by certified mail to the owner of the certificate parcel. The notice must inform the owner that the tax certificate was sold, the name of the Lien Purchaser and describe the owner’s options to redeem the parcel, including entering into a redemption payment plan. If a property owner wants to redeem the parcel, the following would occur:
a. Appear in person at the treasurer’s office to sign the Redemption contract. Only the owner of record may enter into the payment plan.
b. Owner of property has an opportunity for a Redemption Payment Plan
c. Payments are based on total purchase price divided by the eligible remaining months.
d. Redemption plans are generally made within one year from the certificate purchase date.
15. WHAT GETS PAID FIRST, THE LIEN OR THE NEXT TAX DUE?
They should both be paid. By paying the current tax the taxpayer will avoid getting additional penalty on the current tax and having a subsequent tax lien sold on their property. By paying the Lien the taxpayer will avoid foreclosure.
16. WHAT HAPPENS IF I DO NOT PAY BACK THE LIEN?
The Tax Lien will be active for six years from the date of sale.The purchaser has the right to file foreclosure after the first year. If current taxes are not paid, the purchaser may buy a Subsequent Lien against the property.
17. WHAT IS A SUBSEQUENT TAX LIEN SALE ?
A Subsequent Tax Lien can be sold to the current Lien holder when the taxpayer has delinquent taxes and an existing First Tax Lien. The Subsequent Tax Lien automatically earns the Lien holder 18% interest. Subsequent Tax Liens can be avoided by keeping current taxes paid in full.
18. WILL THE LIEN HOLDER CONTACT ME?
The Lien holder is prohibited from contacting the taxpayer by the Hamilton County Treasurer for a period of one year. After one year, the Lien holder is allowed to contact the taxpayer to discuss the Lien on your property.