Q: My property recently was sold at a sheriff auction for back taxes that I owed. I have been reading that I have a period of time in which I can repay the money I owed to get my property back. If this is true, what is my time limit?
A: If your question is about real estate taxes, most states have a process that allows the real estate taxing authority to place a lien on a home for unpaid real estate taxes. The process allows the state to force the payment of the taxes through the sale of the home.
Typically, you’ll first receive a real estate tax bill from your local real estate taxing authority. You have a certain time to pay that bill and if you don’t pay, you can still bring your account current by paying certain late fees or interest costs along with what you owe in taxes.
But after a certain time period, the real estate taxing authority has the right to sell the property to reimburse itself for the unpaid taxes. These sales occur at a certain time and you, as a homeowner, are given a certain time to redeem the sale. That is to say, you have to pay all amounts outstanding, including fees and other costs, to keep your property. If you fail to make those payments and redeem the taxes, the buyer at the tax sale then gets the right to the title to the property.
While the process differs from state the state, and in some states county by county, the general concept remains the same. But since you didn’t mention where you live in your email, it’s tough to tell how much time you have to redeem your property.
You should be able to find out that information by calling the office for your local real estate taxing authority and finding out the timeline. In some states the process to redeem taxes can be up to two years but in others the time frame is much shorter.
You should move quickly to determine how long you have until the sale is finalized. At the very least, you should know that some states charge interest on the amount unpaid on those real estate taxes that are close to or above what some credit card companies charge in interest for their cards. In addition there are fees that can double the amount you owe in taxes.
Because paying your real estate taxes is critical to owning property, most mortgage lenders require their borrowers to escrow their anticipated real estate taxes. By having the money in hand, the lender can pay the bill when it comes due and avoid losing the property and the value of their collateral.
For more information on what happens if you don’t pay your real estate taxes read our article on Unpaid Real Estate Taxes.