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Tax Sale Problem: Advice, Anyone?

Posted by 15789465 on

I'm asking the group this question, on behalf of a member who is struggling with these issues. If you have any ideas, please share them. The Alabama Code says property owner redeeming from a tax sale must pay the taxes due at time of sale, plus interim taxes (which are paid to the Probate Judge or Revenue Commissioner), plus "With respect to property which contains a residential structure at the time of the sale regardless of its location, the proposed redemptioner must pay to the purchaser or his or her transferee, in addition to any other requirements set forth in this section, the amounts set forth below" which includes insurance premiums and the value of preservation improvements. The additional charges are paid directly to the tax sale purchaser. There is no statutory authority or mechanism for the Probate Judge to collect those sums before issuing its Certificate of Redemption. In Ross v. Rosen Rager (Ala. Supreme Court) the issue was: When does redemption take place? Is it when the Probate Judge issues the Certificate of Redemption, or is it when the owner pays the additional sums to the tax sale purchaser? The court ruled it was when the Probate Judge issued the certificate of redemption. At that point, the tax sale purchaser is no longer entitled to possession of the property. So, how does he go about collecting his additional charges? The Alabama Supreme Court offered little assistance because the issue was not in front of the court. They opined that the tax sale purchaser might seek one of the extraordinary writs, or might look to the circuit court's general review jurisdiction over the probate court, in order to stop or stay the issuance of the redemption certificate. According to my personal research, not a single one of the extraordinary writs would survive a motion to dismiss. The reasons are a little arcane for this post, but if you are interested, you can read them HERE Based on the Supreme Court's "advice," my reader filed something in the Circuit Court to prevent the issuance, or to rescind the issuance, of a redemption certificate, because of the owner's failure to pay the additional charges. The Circuit Court dismissed, holding that it had only appellate jurisdiction over the Probate Court. Any thoughts, any one?

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3 comments

  • just a couple of things i happen to remember to point out:

    in 2010 in ross v rosen-rager the supreme court DIDN’T rule that redemption occured when the certificate of redemption was issued/
    instead, that court declined to rule on the issue because it said it didn’t matter – the tax-sale purchaser lost his interest in the property for failing to file a timely judicial challenge of the certificate (on the same day the al court of civil appeals in another case effectively ruled that property wasn’t redeemed from tax sale when the certificate was issue) . the court said that ross could have filed an appeal or, if appeal was unavailable, then he should have filed a petition with the circuit court for an extraordinary writ (certiorari, mandamus, prohibition) pursuant to ala code section 12-22-20 to the probate court to challenge the certificate.

    fast forward to sept. 5, 2013

    in ross v wells fargo, madison county 47cv12-9016764 (on alacourt), the probate judge was granted his motion to dismiss ross’ petition for a writ of mandamus because of the assertion that,the circuit court lacked subject matter jurisdiction to consider an appeal (or petition for writ) of a judgment/order/decree of the probate judge that wasn’t one of the seven types enumerated in ala code section 12-22-21.

    the probate judge cited ex parte jim walter resources, inc., 91 So.3d 50 (ala.2012) and oliver v. shealey, 67 So.3d 73 (ala. 2011)

    i, several lawyers, and the circuit court judge were stunned – but the circuit judge granted the motion to dismiss

    if this is true, every ministerial act and most cases that are not for matters of inheritance, will have to be directly appealed/petitioned to the alabama supreme court (wait till they see their upcoming backlog if this is true)

    all opinions from anyone with knowledge of appeals of decisions of the probate judge would be appreciated

    howie on
  • Hi Gary, there are two troubling parts of the quoted language. One is the grant of jurisdiction to the “appropriate court” to “ascertain the true value of such permanent or preservation improvements” and the other is “…and enforce the redemption accordingly.”

    First, why does this statute talk about “permanent or preservation” improvements when the other parts talk only about preservation improvements. Sloppy language always leads to litigation.

    Second, the court is not given authority to enforce the portion related to the insurance premiums.

    Third, the authority is given to “enforce the redemption” only if the parties cannot agree to the value. What if they agree as to the value, but the owner simply refuses to pay? Can equity impose an equitable lien on the property, superior to all other liens?

    Finally, the Supreme Court said the investors remedy is to stop the redemption in some manner. The statute above, providing a court with authority to “enforce the redemption accordingly” seems to support a belief redemption is not effective until all payments have been received by the investor. I think Ross v Rosen-Rager was a very poor decision, with ill-thought out consequences.

    Denise L. Evans on
  • It’s very possible that I am missing something here, but Alabama Code Section 40-10-122 spells out very specifically how the tax sale purchaser is to go about the process of recouping their “extra” costs. If a tax sale purchaser has exhausted this process (whether the Probate Judge has issued a redemption certificate or not) and not been made whole, they would appear to have the recourse stated in the last part of “(e)” of this code section which states:

    “…in the event of failure without fault of the parties to affect an award, the appropriate court shall proceed to ascertain the true value of such permanent or preservation improvements as applicable and enforce the redemption accordingly.”

    I would imagine that means that litigation would have to be initiated for that specific purpose but would nonetheless provide legal recourse apart from acts of the Probate Judge.

    Gary Boyd on

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