HB270 Alabama 2024 Session

Summary

Primary Sponsor

Chris Sells Representative

Republican

Session

Regular Session 2024

Title

Tax delinquent properties, provides for distribution of excess funds from certain tax sale, actions to foreclose and quiet title, public auction demanded and distribution of proceeds, distribution of surplus proceeds, limited application of act.

Description

Under existing law, a county tax collecting official may choose to deal with a tax delinquent property in one of two ways. A tax delinquent property may either be sold in a tax sale to a tax sale purchaser, or the tax lien may be sold to a tax lien certificate holder.

This bill would provide that an owner who is unable to redeem his or her property or the tax lien certificate, depending on the system used in the county at the time of the delinquency, would have an opportunity to receive the difference between the amount owed to the government and the value of their property, as reflected by the property's sale price.

Under existing law, property may sell at a tax sale for more than the amount of the decree of sale, which includes taxes, fees, charges and costs, and expenses owed to the county. The difference between the amount paid at a tax sale and the amount of the decree of sale is the excess.

After the tax sale, the tax-delinquent owner or other persons with an interest in the property such as a mortgagor may redeem the property within three years from the date of the tax sale by paying the amount paid by the tax sale purchaser plus certain additional HB270 INTRODUCED costs. This is known as a statutory redemption. Any person who redeems during this initial statutory redemption period is entitled to receive the excess funds.

After the expiration of the initial statutory redemption period, this bill would provide for the owner of the land at the time of the tax sale or a subsequent owner with a properly recorded deed or conveyance to receive the excess funds without a redemption if the owner or subsequent owner executes a release and waiver releasing any right to redeem the property and waiving any and all interest in the property, which must be recorded with the judge of probate.

This bill would also expand the 10-year period during which the excess funds must be paid out for specified calendar years.

Under existing law, in those counties in which tax liens are sold, if no person redeemed the tax lien certificates during the three-year statutory redemption period, the holder of all tax lien certificates on the property may bring an action to foreclose the right to redemption and quiet title to the property. This requires that notice be provided to a number of specified persons with potential legal interests in the property.

This bill would provide that an action to foreclose the right to redemption and quiet title may HB270 INTRODUCED be brought not less than four years, rather than three years, after the auction or sale of a tax lien.

This bill would provide further details of who qualifies as the holder of all tax lien certificates on a property.

This bill would provide for notification of the action to additional persons with potential legal interests in the property.

This bill would provide that a person who is entitled to redeem the tax liens may demand that, in lieu of the holder of the tax lien certificates being vested in the property, the property be sold at public auction.

This bill would provide details regarding the conduct of the public auction and the distribution of proceeds from the auction.

This bill would also provide that any surplus in the proceeds shall be distributed to the original owner of the tax-delinquent property or his or her heirs or other successors.

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Subjects

Property & Estates