[WSBARP] Tax Deed/Sale Unique Situation

Wed Dec 14 14:26:21 PST 2016

Thanks so much for the response.what I didn't make clear is that the two
parcels are about 1 acre and about 0.25 acre. The tax sale parcel is the
smaller parcel. The house sits almost entirely on the larger parcel with a
small portion of the attached garage on the smaller parcel. However, the
septic system (tank and field) is entirely on the tax sale parcel. Again,
thanks so much.

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From: Eric Nelsen [mailto:Eric at sayrelawoffices.com] 
Sent: Wednesday, December 14, 2016 2:19 PM
To: Eric at DooyemaLaw.com; WSBA Real Property Listserv
Subject: RE: [WSBARP] Tax Deed/Sale Unique Situation

If I remember my tax sale research right from five-six years ago, a property
tax foreclosure wipes out ALL encumbrances on the land--mortgages,
easements, everything. So I think third party owns that parcel. I'm not
positive but you might research if the property tax foreclosure has any
effect on statute of limitations for adverse possession. The ownership of
the house also is in question, I think. If it is truly straddling the line
in a fashion where it is ambiguous which tax parcel it should properly
"belong" to, then it is a real muddle and I have no clue what to suggest in
terms of who has true ownership.

I think the practical solution is for the buyer to order a preliminary
commitment and see what the title company is willing to insure. I would bet
that the title company is going to vest the foreclosed tax parcel with the
third party buyer, and the other tax parcel with the bank, and have another
exception about ownership of the house.

If someone wants to buy both parcels, I think the safest route would be to
negotiate with the bank, and also contact the third party and offer them
something, and use the fact of the third party's claim as leverage against
the bank to reduce the purchase price from them. Then get deeds from both
the bank and the third party.

Sincerely,

Eric

Eric C. Nelsen

SAYRE LAW OFFICES, PLLC

1417 31st Ave South

Seattle WA  98144-3909

phone 206-625-0092

fax 206-625-9040

Please Note that We Have Moved. We have moved our Seattle office to Mount
Baker Ridge (a small commercial community just above the I-90 tunnel). Our
new address is 1417 31st Avenue South, Seattle WA 98144. All other contact
information remains the same.

From: wsbarp-bounces at lists.wsbarppt.com
[mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of Eric J. Dooyema
Sent: Wednesday, December 14, 2016 1:24 PM
To: wsbarp at lists.wsbarppt.com
Subject: [WSBARP] Tax Deed/Sale Unique Situation

This is going to read like an exam question.but any help would be most
appreciated.

A house sits on two parcels; the property line goes through the house. The
parcels have been owned in common since the house was built in the 1950s
(and probably before). The last owner acquired both parcels in 2005 and took
out a loan using both parcels (and the house) as collateral. In 2011, one of
the parcels was sold at a tax sale for delinquent property taxes to a third
party. In 2016, the bank foreclosed on both parcels and obtained and filed a
Trustee Deed listing both parcels. According to the assessor the Bank owns
both properties. Let's assume that all proper notice and other requirements
have been met.

A new party wants to buy both parcels from the bank.

Last fun fact, the tax sale parcel is landlocked.

1. Did the bank have a right to foreclose on the tax sale parcel? 

2. Who owns the tax sale parcel now?

3. Will potential new buyer be able to get title insured on tax sale parcel
in a purchase from the bank?

4. Any other issues or remedies that come to mind?

The facts that the house sits on both parcels and they were divided by the
tax sale, it seems, are very unusual.

Please feel free to email me directly or call.thanks so much.

Eric at dooyemalaw.com 

Eric J. Dooyema

Dooyema Law Office

624 W Hastings Rd Suite 12

Spokane, WA 99218

509-474-1685  

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