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Lienholder Notices of Tax Sale

Posted by Denise Evans on

I've given you some bad advice. The correct advice is in my book and classes, but I posted the wrong thing on this blog. It is related to notices to lienholders.  The notice MUST be sent via certified mail, return receipt requested (CMRRR).  I apologize for being so flippant in this blog about the cat letter.  Section 40-10-74, which is part of the chapter concerning rights of tax sale purchasers, says you must send CMRRR notice to the lienholder. Section 40-10-120, which is part of the chapter concerning redemption, says you just have to send notice.  That's confusing. When one statute is more specific than another statute, the more specific one "trumps" the less specific one. So, you must send your notice by certified mail, return receipt requested. On the other hand, maybe you can send five cat letters via certified mail, and by the time the real letter arrives (printed on cat stationary), the bank will have written you off as a crackpot, and throw the real notice letter in the trash! Alabama Code Section 40-10-74 says

Right of purchaser or assignee to possession; redemption when lien is recorded.

Any purchaser of lands at a tax sale other than the state or anyone claiming under him shall be entitled to possession of said lands immediately upon receipt of certificate of sale from the tax collector; and, if possession is not surrendered within six months after demand therefor is made by said purchaser or his assignee, the said purchaser or his assignee may maintain an action in ejectment or a statutory real action in the nature of ejectment, or other proper remedy for the recovery of the possession of the lands purchased at such sales and shall be entitled to hold the possession thereof on recovery, subject, however, to all rights of redemption provided for in this title. If the mortgage or other instrument creating a lien under which a party seeks to redeem is duly recorded at the time of said tax sale, the said party shall, in addition to the time in this title specified, have the right to redeem said real estate sold, or any portion thereof covered by his mortgage or lien, at any time within one year from the date of written notice from the purchaser of his purchase of said lands at tax sale, served upon such party, and notice served upon either the original mortgagees or lienholders or their transferee of record, or their heirs, personal representatives or assigns shall be sufficient notice. Such notice shall be given by certified or registered mail, return receipt demanded, addressed to the last known address of the mortgagee or lienholder. Nothing in this title shall affect the rights of minors or insane persons to redeem as provided for in this title, or operate to convey or affect the rights, title or interest of any reversioner or remainderman.

(Acts 1935, No. 194, p. 256; Acts 1935, No. 528, p. 1114; Code 1940, T. 51, §287.)
On the other hand, Alabama Code Section 40-10-120 says:
When and by whom land may be redeemed.

(a) Real estate which hereafter may be sold for taxes and purchased by the state may be redeemed at any time before the title passes out of the state or, if purchased by any other purchaser, may be redeemed at any time within three years from the date of the sale by the owner, his or her heirs, or personal representatives, or by any mortgagee or purchaser of such lands, or any part thereof, or by any person having an interest therein, or in any part thereof, legal or equitable, in severalty or as tenant in common, including a judgment creditor or other creditor having a lien thereon, or on any part thereof; and an infant or insane person entitled to redeem at any time before the expiration of three years from the sale may redeem at any time within one year after the removal of the disability; and such redemption may be of any part of the lands so sold, which includes the whole of the interest of the redemptioner. If the mortgage or other instrument creating a lien under which a party seeks to redeem is duly recorded at the time of the tax sale, the party shall, in addition to the time herein specified, have the right to redeem the real estate sold, or any portion thereof covered by his or her mortgage or lien, at any time within one year from the date of written notice from the purchaser of his or her purchase of the lands at tax sale served upon such party, and notice served upon either the original mortgagees or lienholders or their transferee of record, or their heirs, personal representatives, or assigns shall be sufficient notice.

(b) If any real property has been sold for taxes and is subject to redemption from the sale as set forth in subsection (a) and has also been sold in one or more subsequent sales for taxes, then any party entitled to redeem such sale for taxes may redeem such sale if the redemptioner simultaneously redeems his or her sale and all subsequent sales. In the event of a redemption of successive sales, the redemption amount shall be ascertained by applying the provisions of Sections 40-10-121 and 40-10-122. Redemption amounts computed pursuant to Section 40-10-121 shall be paid as stated therein. Redemption amounts computed pursuant to Section 40-10-122 shall be paid as stated therein if the purchaser had the right to redeem pursuant to subsection (a) or was the owner of the then current tax certificate or tax title. Otherwise, those funds shall be disposed of as set forth in Section 40-10-28 and paid to such purchaser or his or her assignee only as set forth in Section 40-10-28, with the time limits for such application computed utilizing the sale date when the purchaser's interest was sold for taxes.
(Acts 1935, No. 194, p. 256; Code 1940, T. 51, §303; Act 2009-508, p. 937, §1.)

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  • Better service normally wins the day in court

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