The short end of the stick.

by Chris on September 4, 2012

A tax buyer has more rights under the new law than he under the prior law. Prior to 2009, a tax buyer got the short end of the stick when a tax sale was annulled. He would be stuck with abstract fees, court costs, attorney’s fees and, many times, he wouldn’t even get his taxes back. But things are different now – almost.
The tax buyer, when the sale is cancelled by a court, must be reimbursed: 1) 5% penalty on all sums paid, even subsequently paid taxes; 2) 12% per annum on all subsequently paid taxes; 3) all costs. Costs are not completely defined, but includes costs of sending notice, publication, determining identity of interested parties who require notice. Presumably, costs would include all court costs since that is the traditional definition of costs. Also, improvements to the property may be reimbursed. If you obtain an abstract and hire a lawyer to review it with the idea of locating interested parties, this should be included as a reimbursable cost.

The most important feature of the new law is the requirement that all taxes must be paid before a judgment of annulment can have effect and the failure to make that payment within one year operates to validate the tax sale and dismiss the annulment suit with prejudice. Courts typically assess costs to the losing party, so the inclination is to make the tax buyer pay court costs if the confirmation suit fails. However, the tax buyer is actually always the winner since an award of taxes or the property will be made. Also, if the State constitution mandates reimbursement, the assessment of costs would frustrate that public policy since the tax buyer would get less.

So, even though the stick is still short, you can still waive it around to force some reimbursements or else. Or else, you might clear the title.

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