Redemption Period Question

Hello, I would like to find out when the redemption period starts on Tax sale properties. Does it starts when the property forecloses? or when someone receives and records the title through the auction? Also, during this period what are some of the option for the new title owner? can I sell the property?

Thanks in advance

Redemption period from my research starts the day of the tax sale which is actually not a foreclosure sale. A notice of sale is filed at the courthouse and sent to last address of owner and the county sells the property or owns the property if there are no bidders at the sale. You may buy them directly from the county if they do not sell. These are also known as Struck Off properties. The ones that have been pulled paid the taxes due or filed bankruptcy prior to the sale.

Also do not forget the redemption period is different for owner occupied and others. Owner has two years to redeem homestead property.

You can sell the property if you win the bid at the sale. The new owner will be bound by the same redemption period. Title companies will not issue a title policy until the period is over too. I believe you can obtain the deed from the previous owner and wipe out the redemption period but I am not sure here. I hope some smarter investors can help out with this.

Other States have a really messy procedure where you have to go to court to clear up the title. Thank God we live in Texas.

Hope this helps some

Thank you,

Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737

512-301-9171 home
512-587-6177 mobile

Thanks for the info. So, you mean if the property is still occupied by the owner, I can’t not sell it and have to wait 2 years if the owner will redeem the property? Also, I don’t understand why I can’t get a title insurance on Tax sale properties if the previous title is clean? it sounds like it would be difficult to finance a prospective buyer. Thanks

Occupancy be anyone is a different matter. Homestead redemption is 2 years occupied or a teardown shack that is condemed. You do have the right to collect rent etc on the property and to lease it. If the previous owner still lives there I believe you would have to evict them.

You can not get title insurance because the previous owner still has a vested right of ownership, their right to pay you what you paid plus 25% interest per year or any part thereof. Even 1 day if redeemed the day after the sale the 25% applies.

I would lot spend a lot of money remodeling a property that you buy at a tax sale. The previous owner may find a way to redeem if all fixed up and rented out or could sell his deed to another investor to redeem the deed.

I am not exactually sure how the previous owner goes about redemption and if he can sell the right to do so. We both need to do some research on this in depth.

Thank you,

Ted P. Stokely Jr
11505 Sw Oaks
Austin, Texas 78737

512-301-9171 home
512-587-6177 mobile

Here is a link I have used to help answer questions.

Hope this helps some

Ted Jr

http://www.co.travis.tx.us/tax_assessor/foreclosure/default.asp

From what I just read it looks like only the person in title at time of sale or lawsuit (Or tenant?) can redeeem the property.

Sec. 34.22. Evidence of Title to Redeem Real Property.

(a) A person asserting ownership of real property sold for taxes is

entitled to redeem the property if he had title to the property or

he was in possession of the property in person or by tenant either

at the time suit to foreclose the tax lien on the property was

instituted or at the time the property was sold. A defect in the

chain of title to the property does not defeat an offer to redeem.

Hope that clears up that part.

Ted Jr

Thanks. That’s good to know, I guess not even the mortgage company can redeem the title. Is that right?

Thanks for the link to Travis Co site. I live in Fort Bend county, I would assume it applys to all of Texas. BTW, have you done any bids? how was your experience? in Ft. Bend Co all the listings are in separate precinct so if you want to look at a property you have to go to each precinct (what a pain!) and see what they have listed.

The time period for redemption starts when the deed is filed.

That is why you must file your deed as quickly as possible. Also if you are buying ‘county-held’ property from the assessor collector then you need to ask if a deed was filed when the property was ‘struck-off’ to the assessor. If the deed was filed then the redemption clock will begin to tick.

It is possible to buy a deed with no redemption rights from the county provided the deed was filed and sufficient time has passed.

In Texas redemption can be made to the holder of the tax deed by the delinquent property owner. The tax code states that if the holder of the tax deed cannot be found or the delinquent property owner and the deed holder do not agree on the amount required to redeem, then payment can be made to the tax assessor collector of that county.

My suggestion, as an attorney and investor in this process, is to let the county collect the redemption proceeds. Make sure an accurate address and all expenses incurred which can be classified a ‘preservation’ costs are made known to the delinquent propety tax division.