[WSBARP] Tax Deed/Sale Unique Situation

Wed Dec 14 16:42:04 PST 2016

One thing to consider in these cases is the tax sale notice requirement. It may be that notice was required, and not given, or proper. The statutory standards regarding notice to owners and interest holders are strict. The SOL is also strict, though. In the facts given, it would be too late to challenge the sale. 

Robert D. Wilson-Hoss 
Hoss & Wilson-Hoss, LLP 
236 West Birch Street 
Shelton, WA 98584 
360 426-2999

www.hossandwilson-hoss.com
rob at hctc.com

This message is intended solely for the use of the addressee and may contain information that is privileged, confidential, and exempt from disclosure under applicable law.  If you are not the addressee, you are hereby notified that any use, distribution, or copying of this message is strictly prohibited.  If you received this message in error, please notify us by reply e-mail or by telephone (call us collect at the number listed above) and immediately delete this message and any and all of its attachments.  Thank you.

This office does debt collection and this e-mail may be an attempt to collect a debt, Any information obtained will be used for that purpose.  To the extent the Federal Fair Debt Collection Practices Act (15 U.S.C. § 1692) applies this firm is acting as a debt collector for the condominium/homeowners' association named above to collect a debt owed to it. Any information obtained will be used for collection purposes. You have the right to seek advice of legal counsel.

From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of John McCrady
Sent: Wednesday, December 14, 2016 3:41 PM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] Tax Deed/Sale Unique Situation

Per RCW 84.60.010, I have no doubt that the tax sale wiped out the mortgage as to the parcel foreclosed upon.

See RCW 36.35.290 and Lake Arrowhead Community Club, Inc. v. Looney 112 Wn.2nd 288 regarding the effect of the tax sale on easements, etc.

I would be very interested to see a Washington case establishing some sort of equitable relief for mortgage holders in this situation.  

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] On Behalf Of Mark K. Funke
Sent: Wednesday, December 14, 2016 2:53 PM
To: Eric at DooyemaLaw.com; WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Tax Deed/Sale Unique Situation

Eric - Going off memory here - but you will want to look into an old line of Washington cases that address “virgin title” - that upon finalizing of the tax sale a new title is created as if prior title had never existed and thus all easements, adverse possession etc. are wiped out as if they never existed. The concept starts out strong back in the 1920s or so and then by the time we reach more recent times is watered down and there is more of a balance of equities rather than simply eliminating anything and everything from title post tax-sale. I vaguely recall that there is a reported case addressing a 1/2 house sold at tax sale; There are at least 2 reported decisions regarding a partial ownership (1 of several condo units) in a downtown Seattle athletic club that went to tax sale after WaMu managed to not pay the property taxes from an impound account and a client of mine bought it at tax sale. And there is a fairly good Law Review article specifically on Washington State tax sales - lots of good information in that. Sorry, I don’t have the cite handy. This fact pattern - a sale of 1 lot but not the other at tax sale and structures or improvements straddling property lines comes up rather frequently; in King County I would venture to say it happens every year. It’s a classic reason why something ends up at tax sale - you have multiple lots and someone loses track of at least 1. Happy to discuss further on the phone if you would like. 

Thank you, - Mark

__

Mark K. Funke, Attorney

P.206-632-1535

mark at funkelaw.com

www.funkelaw.com 

Licensed in Oregon & Washington

On Dec 14, 2016, at 2:26 PM, Eric J. Dooyema <Eric at DooyemaLaw.com> wrote:

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.

  _____  

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  

  _____  

The information contained in this message is confidential, protected from disclosure and may be legally privileged. If the reader of this message is not the intended recipient or an employee or agent responsible for delivering this message to the intended recipient, you are hereby notified that any disclosure, distribution, copying, or any action taken or action omitted in reliance on it, is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by replying to this message and destroy the material in its entirety, whether in electronic or hard copy format.

_______________________________________________
WSBARP mailing list
WSBARP at lists.wsbarppt.com
http://mailman.fsr.com/mailman/listinfo/wsbarp

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/pipermail/wsbarp/attachments/20161214/ad953a64/attachment.html>