If I win a property at an auction for tax deeds in California, will the property be free and clear? No other liens can happen? How do I verify?
Hi,
Free and clear with the exception of a Federal IRS lien, which can still be in place and required to be paid by buyer to clear title!
GR
IRS lien is the ONLY lien that can be left after I purchase a property at an auction in California?
How do I find out how much I will have to pay on the IRD lien BEFORE I bid?
Funny you asked this, I was just researching this for Los Angeles County. You may want to check with your county tax collector. Here is some information from the Los Angeles County Tax Collector Terms and Conditions (http://ttc.lacounty.gov/proptax/docs/TermsAndCondition.pdf) for bidding on Tax Deeds which may help.
Tg
LIENS THAT ARE NOT REMOVED BY TAX SALE
A tax deed will cancel all private liens (such as Deeds of Trust, Mechanic’s Liens, Judgments, etc.), as well as all prior delinquent taxes. Public liens such as Improvement Bonds, Mello-Roos Special Tax liens, Demolition liens, Weed Abatement liens, etc., or foreclosure judgments of those public liens, WILL NOT be discharged with a tax deed.
Pursuant to Section 3712 of the Revenue and Taxation Code, the deed conveys title to the purchaser free of all encumbrances of any kind existing before the sale, EXCEPT for:
(a) Any lien for installments of taxes and special assessments, which installments will become payable upon the secured roll after the time of sale.
(b) The lien for taxes or assessments or other rights of any taxing agency, which does not consent, to the sale of the property at auction.
(c) Liens for special assessments levied upon the property conveyed which were, at the time of the sale, not included in the amount necessary to redeem the tax defaulted property and, where a taxing agency which collects its own taxes has consented to the sale, not included in the amount required to redeem from sale to the taxing agency.
(d) Easements constituting servitudes upon or burdens to the property; water rights, the record title to which is held separately from the title to the property; and restrictions of records.
(e) Unaccepted, recorded, irrevocable offers of dedication of the property to the public or a public entity for a public purpose, and recorded options of any taxing agency to purchase the property or any interest therein for a public purpose.
(f) Unpaid assessments under the Improvement Bond Act of 1915 (Division 10 [commencing with Section 8500] of the Streets and Highways Code) which are not satisfied as a result of the sale proceeds being applied pursuant to Chapter 1.3 (commencing with Section 4671) of Part 8. Any Federal Internal Revenue Service (IRS) liens, which pursuant to provisions of federal law, are not discharged by the sale, even though the Tax Collector has provided proper notice to the IRS before the sale. Before contacting the IRS on properties with IRS liens, you must obtain the following information/documentation:
1. IRS Code 7425C for information on IRS’s Redemption Rights and Release of Right of
Redemption.
2. Copy of the Federal Tax Lien filed against the property you are interested in purchasing that has been recorded with the Los Angeles Registrar-Recorder/County Clerk’s Office located at 12400 Imperial Highway, Norwalk, California 90650.
3. The IRS Foreclosure Redemption Section can be reached at (213) 576-4456. The IRS will not be able to assist you without the above information.
(h) Unpaid special taxes under the Mello-Roos Community Facilities Act of 1982 (Chapter 2.5 [commencing with Section 53311] of Part 1 of Division 2 of Title 5 of the Government Code) that are not satisfied as a result of the sale proceeds being applied pursuant to Chapter 1.3 (commencing with Section 4671) of Part 8.
(i) Weed Abatement charges resulting in liens are not cancelled by tax sale. Review the list of properties subject to weed and brush clearance abatement provided by Los Angeles County Agricultural Commissioner/Weights and Measures and the Los Angeles City Fire Department. For information from the Agricultural Commissioner, call (626) 575-5487 or visit its website at http://acwm.co.la.ca.us, and click onto the “Weed Abatement Program.” Also, the Los Angeles City Fire Department maintains a list of properties that have been assessed Brush Clearance Charges. You can contact the Los Angeles City Fire Department Brush Clearance Unit at (213) 978-3470 or (213) 978-3472. Caution, all properties may not be identified. Investigate before you purchase.
Redemption in other jurisdiction are for those with interest in the property. Other jurisdictions indicate that anyone can redeem tax liens. It is highly advisable to learn and understand who are able to redeem the lien.