Ejectments After a Tax Deed Sale
We often have clients approach us about removing occupants from residential real property after a successful bid at a mortgage foreclosure auction or tax deed sale. The process and procedure governing removing occupants after a tax deed sale or foreclosure auction is significantly different from an eviction. Eviction attorneys remove tenants from property. “Tenant” is the operative legal word. A tenant is one who rents real property from a Landlord. If you bought real estate at a tax deed sale or foreclosure auction, chances are you do not have a landlord-tenant relationship with the occupant. The correct legal theory governing the removal of such persons is known as an ejectment, not an eviction.
Again, if the property is acquired after a tax deed sale or foreclosure, then, normally, no landlord-tenant relationship has been formed between the successful bidder (new owner) and the current occupant of the property. We have had several instances where we were approached by property owners who tried to evict former owners/tenants after a tax deed sale. These clients filed the eviction on their own, without an ejectment lawyer, only to have their case dismissed by the Court.
Tax Deed Sales
Tax deed sales are governed by Chapter 197.432 of the Florida Statutes. You can think of a tax deed sale as a government foreclosure. Every year, real estate taxes must be paid by property owners on a set date to avoid delinquency. A tax deed gives the government the ability to sell your real estate if you are delinquent in the payment of property taxes. The county tax collector will schedule an auction once taxes become delinquent. This auction is known as a tax certificate sale. At the auction, the minimum requirement for bidding on the property is usually the amount of taxes and fees owed on the property.
The highest bidder at the Tax Certificate Sale held by the Tax collector will be issued a what is known as a Tax Lien Certificate. The Tax Lien certificate guarantees the bidder that the Tax Lien will eventually be paid off. Notably, the Tax Lien Certificate is not evidence of a purchase of the real property. Instead, the tax lien certificate is essentially a lien against the real property in favor of the tax lien certificate holder.
Failure to Pay Off the Tax Lien Certificate
The delinquent property owner has 2 years from the date the taxes become delinquent to pay off the Tax Lien Certificate. If the delinquent property owner fails to pay off the certificate, with interest, then the holder of the tax lien certificate will be able to compel a public auction of the real property. In attempting to force a sale of the property, the tax lien certificate holder is required to redeem all other tax lien certificates.
The “Tax Deed Sale”
Assuming the tax lien certificate holder has redeemed all other certificates and applied for a Tax Deed, and assuming 2 years have elapsed since the taxes became delinquent, the tax lien certificate holder can now apply to force a public auction of the property. Under Fla. Stat. §197.542, the auction is referred to as a “Tax Deed Sale”
Post-Tax Deed Sale Issues
The successful bidder at the Tax Deed Sale becomes the new owner of the property by virtue of a Tax Deed. Now, unbeknownst to the new owner, there are people living at or occupying the property. The new owner has no relationship with these occupants. In the eyes of the law, the new owner is not, strictly speaking, a Landlord, and the occupant(s) is/are not tenant(s). The new owner must now file a lawsuit to have the occupants removed, this lawsuit is known as an ejectment. Under Florida law, Ejectments are governed by Fla. Stat. § 66.011. To recover possession of the premises in an ejectment action, the Plaintiff (new property owner) must show legal title to the property at the time of the beginning of the lawsuit. Absent extenuating circumstances, the new owner will easily be able to prove title to the property by way of the Tax Deed. Ejectments, unlike evictions and unlawful detainers, are not summary procedure actions under Fla. Stat. § 51.011. Note, if the new owner forms a landlord-tenant relationship with the occupants after acquiring the tax deed, and some part of the landlord tenant agreement is breached, then the correct way of removing such tenants would be by filing an eviction; in such a circumstance, despite the above-explanation, it would be error for the new property owner to file for ejectment (because a landlord-tenant relationship was formed with the occupants after the tax deed sale).
If you have acquired a property after a tax deed sale and you need assistance removing a tenant or occupant, speak to a tax deed ejectment lawyer today. Call (800) 531-4587.