[WSBARP] Tax Deed/Sale Unique Situation

Wed Dec 14 16:47:57 PST 2016

Little known statute:

(1) The general property tax assessed on any tract, lot, or parcel of real property includes all easements appurtenant thereto, provided said easements are a matter of public record in the auditor's office of the county in which said real property is situated.

(2)(a) Except as provided in (b) of this subsection, any foreclosure of delinquent taxes on any tract, lot, or parcel of real property subject to such easement or easements, and any tax deed issued pursuant thereto shall be subject to such easement or easements, provided such easement or easements were established of record prior to the year for which the tax was foreclosed.

(b) If an electric utility has a recorded interest in the easement or easements, any foreclosure of delinquent taxes and tax deed issued pursuant thereto are subject to such easement or easements regardless of when such easement or easements were established.

RCW 36.35.290, last amended 2016.

And under Lake Arrowhead v. Looney, a restrictive covenant is an appurtenant easement.

Rob

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

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From: wsbarp-bounces at lists.wsbarppt.com [mailto:wsbarp-bounces at lists.wsbarppt.com] On Behalf Of scott scottgthomaslaw.com
Sent: Wednesday, December 14, 2016 3:04 PM
To: WSBA Real Property Listserv
Subject: Re: [WSBARP] Tax Deed/Sale Unique Situation

Is that true, a tax sale wipes out an easement?

On December 14, 2016 at 2:36 PM Eric Nelsen <Eric at sayrelawoffices.com> wrote:

Sounds like a great opportunity to play off the third-party against the bank to try to get a lower sale price, or at least hold them jointly to a single reasonable price allocated between them. I'd start with the title commitment on both parcels.

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: Eric J. Dooyema [mailto:Eric at DooyemaLaw.com] 
Sent: Wednesday, December 14, 2016 2:26 PM
To: Eric Nelsen; 'WSBA Real Property Listserv'
Subject: RE: [WSBARP] Tax Deed/Sale Unique Situation

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 

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