Void Tax Sales


I know many of you are starting to get ready for the Spring tax auctions.  I’m getting a lot of questions about things that might cause a tax sale to be void.  One of the most common problems is dead people.  Not zombies–just people who are no longer alive by the time “their” property is sold at a tax auction. If they aren’t alive, they can’t very well own property, can they?

The property now belongs to someone else. Whether the deceased person had a will or not, the title to the property automatically goes SOME PLACE at death. Title doesn’t stay in the Twilight Zone, and it sure doesn’t stay with the dead person.

Here’s the problem: if the tax assessment is still in the name of the formerly-living-but-now-deceased person, then whoever actually owns the property NEVER got notice of the tax sale.  When I say that, I don’t mean they never received the envelope from the tax collector. The might have received that. It doesn’t matter. What I mean is, they never received the official notice, when those were printed in the newspaper with the deceased person’s name, not the new owner’s name. The official notices have the name of the person who last assessed the property for taxes.

There’s a basic constitutional law issue at work here–no notice, no bad consequences. It doesn’t always apply, but it does in this situation. If you’ll remember that rule, you’ll avoid a lot of problems.

So, dead people usually equal void tax sale.  If you suspect a problem in this area then don’t bid, or see a lawyer before you do.  In my investing, I avoid dead people like the plague. Remember the zombie movies, even if you don’t believe in them. Dead people cause problems.

Note to lawyers who don’t want to take my word for it: Read the case of Hames v. Irwin, 253 Ala. 458, 461, 45 So.2d 281, 283 (1949).