How to Buy Surplus County Property

how to buy tax properties

Below is a sample letter sent by Pat Monahan to those interested in purchasing surplus county properties.

Thanks for your interest in surplus county properties. Attached is a list of properties current as March 2005 but allow me to explain the list to ensure you understand what will be involved in pursuing acquisition of any of these.

Please note that these properties do not include surplus rights-of-way, because of a different procedure for their disposition. For more information on how to acquire surplus rights-of-way, please contact the County Engineer's Office at 912-652-7800.

The properties are placed into four categories, which are in bold typeface. These are:

1. Bar of redemption

2. Tax deed

3. Tax deedfor review

4. For sale/review

Category 4, "The For Sale/Review" properties (see last page) will become available in the future but remain undetermined for sale pending final resolution.

Categories 1 through 3, the bulk of the list, are held by legal interest. At the outset, let me clarify that Chatham County does not own the property. Chatham County holds an interest in it through a bar of redemption or tax deed ("defeasible title") for unpaid taxes, penalties and interest, and in some instances gaining ownership through it can be costly, time-consuming and risky. The property previously went to tax sale on the steps of the Courthouse, but when no one bid on it, Chatham County placed a tax deed (or Sheriff's Deed) against it. With recording of the tax deed, Georgia law requires that it be placed in Chatham County's name to protect its interest, which becomes superior to all other claims.

Should Chatham County convey its interest (by quit claim) to you, this action should not be interpreted as conveying the same ownership rights as marketable title. Nonetheless, a tax deed can be used as a way to pursue the eventual goal of ownership (marketable title). In simplest terms, it will require two steps, as follows:

1. Assume Chatham County's interest. As noted previously, Chatham County does not own the property but only holds an interest in it for outstanding taxes, which now total $__________ (unpaid amount accrues additional interest on the 15th of the month). Chatham County conveys its interest in the property through a quit claim deed. This can be achieved by:

Chatham County declares its interest as surplus (the Board of Commissioners approves it usually as a routine matter). The matter will be scheduled as part of a regularly-scheduled meeting of the Board.

Chatham County must advertise the property to convey its interest. This advertisement takes at least 15 days (plus the advertising schedule of the newspaper).

Chatham County conducts a public auction. The minimum bid will be $1, plus the value of outstanding taxes, penalties and interest. Seldom will more than one bid be offered; however, this amount could be higher depending upon whether competition during the bids pushes this amount upward. Nonetheless, the goal is merely to put the bidder in a position of paying off the outstanding tax balance.

With proceeds from the sale, the outstanding taxes, penalties and interest will be paid to the Tax Commissioner's Office.

A quit claim will be written, which must be the Chairman of the Board of Commissioners and the Clerk to the Commission).

The quit claim deed will be recorded in the Office of the Clerk of Superior Court and the original will be mailed to you. This establishes

your interest in the property.

2. Obtain marketable title. The second step requires the work of an attorney, which you will need to obtain. The attorney will need to file a quiet title action or land registration as the final step toward marketable title. Depending upon how clear or clouded the ownership issue might be, the quiet title action can be completed in a matter of several weeks, or it can take years. It can be especially complicated should it involve issues unsettled in Probate Court.

You can find out the amount of taxes (including penalties and interest) due Chatham County by calling the Tax Commissioner's Office at 652-7120. You can find out the amount of taxes due the City of Savannah by calling the Delinquent Tax Division at 651-6455. You will need to provide the Property Identification Number (sometimes called the PIN).

The above attempts to provide a summary of the process to acquire properties held by tax deed or bar of redemption. If any of them interest you, I would suggest you start by reviewing general information about the property at www.sagis.org. which is Chatham County's geographic information service. This will provide you with further details about the property, its location and the neighboring properties (you will need to become familiar with this web site to take advantage of all of its tools, but with some proficiency, it becomes a valuable tool).

If still interested, please take heed that properties held by tax deed can be suspect investments because of unknowns. I suggest that before tackling ownership through a tax deed, you (or an attorney) need to do some preliminary work on the property to understand fully what will be involved to gain marketable title. Besides settling the taxes due to Chatham County (Step 1 as above), some other liens may be placed against the property (). Your attorney can also advise on the time and cost to obtain marketable title (Step 2 as above) through a quiet title action or land registration. In some cases, the amount of tax liens, special assessments, other liens and the cost to file a quiet title action may exceed the fair market value of the property or make acquisition so costly so as to make it economically prohibitive.

Because of the uncertainty in time and money in acquiring a property through the above-noted process, I suggest as a preliminary step that an interested buyer consider negotiating acquisition with the owner of record. This would be an arm's length transaction, and as an advantage, you would be assured of the quickest route to obtain marketable title.

I regret the lengthy response of this letter but it demonstrates the difficulty in dealing with properties held by tax deed. Many citizens mistakenly think that properties can be acquired for payment of outstanding taxes. However, the laws of the State of Georgia weigh heavily to the rights of the property owner of record--even when those property owners do not demonstrate proper property ownership (i.e. maintenance of property and payment of taxes).

Now that you know the process, and after checking on some basic issues with the property, you will need to let me know of your continued interest in the property. I will need at least two weeks notice to prepare the necessary action before the County Commission that will allow the first step of the process to begin.

You may contact Pat Monahan at pmonahan@chathamcounty.org or by telephone at 912-652-7870.

Source: www.chathamcounty.org

Category: Taxes

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