In Madison County in Alabama, about 176 property owners had their properties sold at a tax lien auction on the courthouse steps last year. However, just because someone else had those liens in hand did not mean that the properties were lost to their former owners or that the former owners would necessarily pay hefty interest and fees. That is because in Alabama, property owners whose delinquent property taxes have led to the sale of their properties at auction have five days from the date of the auction to pay their taxes. In Madison Country, that means that only about 1 in every 2,000 delinquent property owners actually loses their home in an auction because most owners pay their property taxes once they are notified that the property has been sold[1].
Lynda Hall, the county tax collector, says that her office in particular goes “the extra mile” to reach people and give them every chance to pay their property taxes. In fact, last year of the 3, 196 property owners originally on the delinquent tax list, only 176 properties ever went to auction. Auction buyers who buy liens that are redeemed by owners receive a refund, or the original owners have three years to redeem the lien by paying the auction buyer for the note and interest.
Given the massive lengths Hall goes to in order to reach delinquent owners, this seems that Madison County liens that actually make it to auction might be a better risk for investors than those in other states or counties. Would you invest in tax liens in Madison County, AL, or aim elsewhere?
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[1] http://blog.al.com/breaking/2011/03/post_579.html
March 17th, 2011 at 8:49 AM
Good?? Depends on your objective. If you’re in it to obtain the property, it looks to me that that fact alone would DQ Alabama as a good tax lien state. Odds are long enough without the extra effort put in by the State to contact the original owner in terms of paying the delinquent taxes.
Peace
March 18th, 2011 at 8:40 AM
Ok but does the county notify the landowner after 3 tax cells? All property’s not sold at the county sale are sold to the state that same auction. Really it is no big deal during the first 2 sales but if you have a property for the 3rd sale then there would be some disappointment