On Friday, September 12, 2014, the Alabama Court of Civil Appeals spelled out the procedure for attacking a redemption when the tax sale investor has not been paid for insurance premiums and the value of preservation improvements. The Court might change its mind if there is a motion to reconsider. The decision might be overturned by the Alabama Supreme Court after a petition for certiorari (an appeal, basically.) But, for now it provides much needed guidance on this topic. Please continue following this blog for any further developments.
In Wall to Wall Properties v. Cadence Bank, Cadence paid the Probate Judge of Madison County slightly less than $900 to redeem property from a tax sale. This was the amount of the taxes due, plus 12% interest. The investor claimed he was also owed insurance premiums and the value of preservation improvements. He asked the Probate Judge to vacate the redemption certificate and conduct a hearing on the additional sums claimed by the investor. The Probate Judge refused, so the investor filed a mandamus petition in the Circuit Court.
A mandamus petition is a request to a higher court that it order a lower court to do its job. The Circuit Court dismissed the mandamus petition, without giving a reason. The investor appealed to the Alabama Court of Civil Appeals.
This is what the Court of Civil Appeals said: The Probate Judge has a duty to determine if ALL monies have been paid (including sums due to an investor) BEFORE it issues a redemption certificate. If it fails to do that, and issues the redemption certificate, then the investor can file a request with the Probate Court to vacate the redemption. The Probate Court must then immediately vacate the redemption certificate and schedule a hearing to consider the evidence regarding sums due to the investor.
If the Probate Court refuses to vacate the redemption certificate, then the investor should file a mandamus petition with the Circuit Court.
Thank you, Howard Ross, of Wall to Wall Properties, for pursuing this case and getting some guidance from the appellate courts. To read the entire decision, click HERE.