Each county in Missouri levies and collects real estate taxes. If those taxes are not paid they become a lien on the subject real property. A county may foreclose the lien at tax sale by initiating a tax sale within three (3) years of the date of the delinquency. Although several counties in Missouri wait until the third year, there are other counties that initiate the tax sale the year following the delinquency.
There are various requirements regarding the conduct of the sale that must be satisfied by the county. Failure to satisfy these requirements may result in a sale of the property being void or voidable. Similarly, there are various requirements upon a purchaser at a tax sale in order to severe valid title to the real property, and failure to satisfy those requirements may result in the purchaser’s loss of interest in the property.
Although the minimum bid for a property being sold for delinquents taxes is the full amount of the delinquent taxes, interest, penalties and cost. If the county has not appointed a trustee, after the third offering if the property has not sold the county collector may sell the property at any time for any amount. Alternatively the County may appoint a trustee to purchase properties after the third offering who may sell the property for any amount.
In exchange for payment of the high bid, the Purchaser will receive a certificate of purchase. The certificate is recorded. The certificate is assignable to a Missouri resident who is not delinquent on taxes.
In order to obtain a collector’s deed, the holder of the certificate must pay all new accruing taxes on the property, and must satisfy Missouri’s statutory notice requirements to interested parties, who include the owners of record, the holder of a deed of trust, and other lien holders. If the statutory notice requirements are satisfied, and the notice is returned for any reason, except refusal, due process may require the Purchaser to take reasonable steps to notify the interested parties. The statutory notice requirements have been construed strictly, and failure to satisfy the notice requirements may result in the Purchaser’s loss of interest in the property.
In response to such notice or other information, an interested party may redeem the property from the purchaser, redemption requires payment of the amount paid by the purchaser, interest on the delinquent taxes, interest, penalties and cost paid for the property, reimbursement of subsequent taxes paid by the purchaser, the purchaser’s recording expenses, the purchaser’s title search fees, and the purchaser’s cost of mailing.
Assuming full and timely satisfaction of the legal requirements, the purchaser upon submission of an affidavit of satisfaction of those requirements and documents in support of that satisfaction, may receive a collector’s deed. The collector’s deed must then be recorded.
After obtaining the collector’s deed, the purchaser will likely want to file a quiet title action. The judgment of the court may be necessary in order for the purchaser to be able to convey marketable title. An interested party, claiming that the sale was conducted improperly, or that the statutory notice requirements were not satisfied, must commence a quiet title action within three (3) years from the time the tax deed was recorded.
Due to the statutory and constitutional requirements involving tax sales, a purchaser or an interested party should consult with an attorney and obtain timely legal advice to protect the their interest. If you have an interest in purchasing property at a tax sale, have purchased property at a tax sale, have received a notice regarding your possible right of redemption, believe that you are an interested party, or have an interest in a property that has been sold at a tax sale to another person, and have legal questions with respect to these requirements, your rights or in capitalizing on your interest, we will be happy to assist you. Please call us to arrange to employ us to assist you in your matter.