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Tax Sale

A transfer of real property in exchange for money to satisfy charges imposed thereupon by the government that have remained unpaid after the legal period for their payment has expired.

Tax sales are authorized by state statutes to collect taxes that are long overdue to the state government from negligent or unwilling individuals.

Requirements

Any sale of real property for delinquent taxes must be conducted in compliance with legally imposed requirements, or it is not valid. Ordinarily the tax collector is required to make and publish a list of property on which taxes have not been paid. Such a list must contain an adequate description of each parcel of land to be sold, the owner's name, the amount due, and the period of time for which the taxes are due. The interest permitted by law on the delinquent taxes, penalties for default in payment, and the costs incurred for the sale may be included in the amount due. Certain states mandate that this delinquency list must be filed or recorded in the office of the county clerk, and statutes may indicate specifically the newspapers in which the list is to be published.

Notice

The purpose of a notice of a tax sale is to warn the owner of the property that it will be sold and to furnish information to prospective buyers. Failure to provide notice to the owner renders any subsequent sale of the property invalid. This rule is consistent with due process requirements that any individual must be given notice and opportunity to defend himself or herself before being deprived of his or her property. The notice given to the owner must adequately describe the property, the amount of tax owed, and for what years it is due.

Manner

State statutes regulate the manner in which tax sales may be conducted. Ordinarily the sale is open to the public in order to ascertain that a fair price for the property will be obtained in the open market. A private sale is valid, however, when authorized by statute.

Price

The general rule is that land offered at a tax sale must bring at least the total amount of taxes due on it, plus legal costs and charges. In some jurisdictions, a sale for a smaller amount is invalid.

In the event that the land is sold at the tax sale for a price that exceeds the amount owed, the sale might be valid, depending upon the state; however, the excess must be given to the delinquent taxpayer.

Buyer

Any individual who is not disqualified by statute may purchase land at a tax sale provided he or she is the highest bidder. Upon payment of the amount bid, the buyer will be given a tax deed that serves as proof of his or her ownership of the property. Certain states mandate that a tax sale be confirmed in a court proceeding before the purchaser actually takes title or ownership to the property.

A state, county, Municipal Corporation, or other governmental unit may buy land sold at a tax sale only if authorized by statute.

Redemption

The owner of property that is the subject of a tax sale is given a statutory right of redemption—that is, if, within a certain period, the owner pays the back taxes plus any other legal charges due, he or she will regain complete ownership of the property free of the prior tax debt. The public policy behind such a statute is to provide the taxpayer with every reasonable opportunity to redeem property since Forfeiture of land has always been regarded as a drastic remedy. Generally any individual interested in the property sold for taxes is entitled to redeem it if his or her interest in the property will be affected by the purchaser taking complete ownership of the land, such as in the case of an individual who has a life estate in the property.

Redemption must occur within the time and in the manner specified by the statute.

Sale Prohibited

Courts can proscribe a tax sale in cases where (1) a sale would be unlawful, so that the buyer's ownership of the land would be open to question; (2) the taxes have been paid; (3) the levy or assessment was unlawful or fraudulent; or (4) the valuation was grossly excessive.

Where errors or irregularities exist in the assessment that could have been rectified if promptly brought to the attention of the proper authorities, the tax sale will not be enjoined if such errors have no effect upon the substantial justice of the tax or the liability of the property for its satisfaction.

Further readings

Lilienthal, Christopher. 2003. "Tax Sale Set Aside: Officials Failed to Examine Past Due Taxes: County and Township Tax Offices Failed to Use 'Common Sense Business Practices'." Pennsylvania Law Weekly (March 31).

Sacks, Michael E. 1998. "Escape Clause in Tax Sale Law Under Review by High Court." Pennsylvania Law Weekly (November 9).

Stone, Lin. 1998. How to Buy Land at Tax Sales. Ed. by James Criswell. Kansas City, Mo.: Truman.

See: consumer, customer, patron

buyer

a person who buys or agrees to buy goods; thus a party to a contract of SALE.

BUYER, contracts. A purchaser; (q. v.) a vendee.

References in classic literature ?
The buyer would nod or drop his whip, and that would mean a bargain; and he would note it in his little book, along with hundreds of others he had made that morning.
There is no shadow of stability in the policy of an English Government, and the most sacred oaths of England would, even if engrossed on vellum, find very few buyers among colonies and dependencies that have suffered from vain beliefs.
exclaimed Vasili Andreevich, uttering every word very distinctly and compressing his lips unnaturally, as he usually did when speaking to buyers and sellers.
He therefore proceeded immediately to castigation: and not contented with that he acquainted Mr Allworthy, at their next meeting, with this monstrous crime, as it appeared to him: inveighing against Tom in the most bitter terms, and likening him to the buyers and sellers who were driven out of the temple.
The parks were green with new leaves and buyers for the Western and Southern trade.
Careful, have I found all buyers, and all of them have astute eyes.
He laughed at our buyers when we offered him sixty cents, seventy cents, a dollar.
They were jumbled together in a most unsightly fashion, in the middle of the road; to the great obstruction of the thoroughfare and the annoyance of passengers, who were fain to make their way, as they best could, among carts, baskets, barrows, trucks, casks, bulks, and benches, and to jostle with porters, hucksters, waggoners, and a motley crowd of buyers, sellers, pick- pockets, vagrants, and idlers.
Now, Mrs Merdle, who really knew her friend Society pretty well, and who knew what Society's mothers were, and what Society's daughters were, and what Society's matrimonial market was, and how prices ruled in it, and what scheming and counter-scheming took place for the high buyers, and what bargaining and huckstering went on, thought in the depths of her capacious bosom that this was a sufficiently good catch.
There were two buyers directly, and more of the listeners plainly hesitated.
The shops sold goods that only poverty could buy, and sellers and buyers were pinched and griped alike.
Now a bag of remarkable clothespins, next, a wonderful nutmeg grater which fell to pieces at the first trial, a knife cleaner that spoiled all the knives, or a sweeper that picked the nap neatly off the carpet and left the dirt, labor-saving soap that took the skin off one's hands, infallible cements which stuck firmly to nothing but the fingers of the deluded buyer, and every kind of tinware, from a toy savings bank for odd pennies, to a wonderful boiler which would wash articles in its own steam with every prospect of exploding in the process.