[WSBARP] Tax Sale
Rob Rowley
rob at rowleylegal.com
Fri Jul 24 11:37:13 PDT 2015
Had one a couple of years ago with an investor who purchased a house at a
county tax sale out in the Columbia Basin where he held it for more than
three years and then came to me for the closing of the sale of the property
to the tenant who'd been in the house for the past 3+ years (owner real
estate contract). The preliminary title commitment/local title company
refused to insure the transaction as they were taking the position that
there were numerous irregularities regularly occurring with tax sales by
the local County Treasurer’s office and *would only insure title after 10
years*.
After picking up my investor client off the floor I then picked up the
phone and called another title company who then immediately issued the
preliminary title commitment without issue (ultimately final) and I closed
the sale without issue.
Each title company has widely varying underwriting and it always pays to
shop title companies.
Please note that effective May 15, 2015, my new address is 7 South Howard
St., Suite 218, Spokane, WA 99201. All other contact information remains
the same.
*Robert R. Rowley* | Attorney at Law
7 S. Howard St, Suite 218
Spokane, WA 99201
Telephone: (509) 252-5074
Mobile: (509) 994-1143
Facsimile: (509) 928-3084
Email: rob at rowleylegal.com
Web Site: www.rowleylegal.com
Practice concentrated on business, real estate and general legal matters in
Washington and Idaho.
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*From:* wsbarp-bounces at lists.wsbarppt.com [mailto:
wsbarp-bounces at lists.wsbarppt.com] *On Behalf Of *John McCrady
*Sent:* Friday, July 24, 2015 9:11 AM
*To:* WSBA Real Property Listserv
*Subject:* Re: [WSBARP] Tax Sale
Property taxes are a first lien; the foreclosure will wipe out your
client’s deed of trust.
There is no redemption from the tax sale. There are certain rights to
challenge the tax sale, due to lack of notice or a claim of incapacity for
instance, but they are extremely limited.
If your client buys at the tax sale the client will have a three year
period where it will be difficult to obtain title insurance (due to the
right to challenge the sale referenced above.)
Your client’s deed of trust probably contains a provision allowing the
client to pay the delinquent taxes and add the amount paid to the balance
owing. This would usually also constitute a further default on the
obligation.
The best course may be for the client to pay the taxes and foreclose.
I would be interested in reading other ideas.
John McCrady
Counsel
Puget Sound Title Company
5350 Orchard Street West
University Place WA 98466
253-476-5721
*From:* wsbarp-bounces at lists.wsbarppt.com [
mailto:wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com>]
*On Behalf Of *Jim Doran
*Sent:* Friday, July 24, 2015 8:35 AM
*To:* 'WSBA Real Property Listserv' <wsbarp at lists.wsbarppt.com>
*Subject:* [WSBARP] Tax Sale
Listies:
I have dealt with HOA line foreclosure Sheriff’s Sales but never a county
property tax sale.
Client has a Note and DOT with a balance of $15,000 +/-on it. The deadbeat
is about $4,000 behind on payments and is behind $8,000 +/- on real
property taxes and this October if the taxes are not paid, at least in
part, there will be a tax auction.
If someone buys the property at the County Tax Sale (I presume conducted by
the Sheriff) do they take the property subject to my clients Note and DOT?
Does the deadbeat have a right of redemption for one year?
Can my client buy the place at the Tax Sale and get rid of the deadbeat?
Since client will have to pay the property taxes anyway if he forecloses,
can he use the County Tax Sale as a way to get rid of the deadbeat. If the
client buys the property at the Tax Sale he takes it subject to his own
Note and DOT which is fine. If the deadbeat wants to redeem the property
he will have to pay my client. How can my client lose?
What am I missing here? (I am sure that I am missing something.)
James R. Doran
Attorney at Law
100 E. Pine Street – Suite 205
Bellingham, WA 98225
(360)393-9506
jim at doranlegal.com
www.doranlegal.com
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