Property taxes play an important function in funding schools, city services, the police department, fire department and other necessary services, which is why property tax liens take priority over other liens.
If a homeowner falls behind on his or her property taxes, the homeowner’s name and property address will be published in the local newspaper. Once a homeowner pays off all property taxes and becomes current, the county tax office will issue a certificate of redemption, indicating that the unpaid taxes have been brought current.
If unpaid taxes are not brought current, the property may be sold in auction or acquired by a nonprofit organization, which will then catalyze the sale of the property as low income housing. If the property is sold in auction, the purchaser will receive a tax deed. A tax deed is a legal document issued by the county tax collector that grants the government the legal right to sell real property to collect unpaid property taxes.
Once a property owner does not pay property taxes on time, the state will enforce penalties, interests, and other fees which will raise the property tax bill. Because the government is not in the property business, designated officials will work with the homeowner to help him or her avoid foreclosure due to delinquent property taxes. Common payment plans include paying monthly taxes, quarterly installments, and several payment portions that depend on the circumstance.
Purpose of Certificate of Redemption
A certificate of redemption serves as proof that a property owner has caught up on previously defaulted property taxes. The certificate ensures the property is not sold to another party in foreclosure, thereby preventing the owner from losing their property.
Additionally, when there are disputes regarding the lien status of a property, the certificate equips the property owner with the ability to disprove foreclosure or inaccurate liens. Should a dispute arise when the property owner wants to sell their property, the certificate of redemption disputes any errors on the title report of a property.
How to Get a Certificate of Redemption
Property owner’s can go the county tax assessment office to find information regarding the status of their property tax debt. Once the property owner is aware of their property taxes, they are required to come current with tax payments. Outstanding balances accrue fines and penalties due to the defaulting debt. The property owner can get a certificate of redemption by paying the necessary fees and property taxes to prevent a foreclosure sale. Once you come current with property tax payments, verify that the county records the certificate. Furthermore, keep a copy of the redemption certificate in the event a future claim arises.
Period to Redeem Your Property
Each state and even local county have different redemption periods and processes in place when foreclosing on a property with defaulted taxes, however the general rule is that a defaulting property owner has a little more than 12 months to redeem their property. This 12-month estimate derives from the fact that property owners in most states pay property taxes two times a year-once in the summer and once in the winter.
State’s can legally initiate foreclosing proceedings to recoup defaulted property tax debt after two consecutive missed property tax payment cycles, at which point the property owner receives a certificate of forfeiture. This certificate serves as proof that the property owner is behind on property tax payments and that the state will begin the foreclosure process unless the property owner comes current. Once issued, the certificate of forfeiture grants the property owner 21 days to make delinquent property tax payments or be subject to property forfeiture.
