UNDERSTANDING YOUR RIGHTS WHEN YOU PURCHASE PROPERTY AT A GEORGIA TAX SALE
Congratulations on your recent tax sale property purchase in Georgia! While this can be an exciting investment opportunity, it's crucial to understand your rights and limitations during the redemption period. This blog post will guide you through what you can and cannot do with your newly acquired property, explain the right of redemption, and highlight its importance in your journey as a tax sale property owner.
The Right of Redemption: What You Need to Know
In Georgia, the original property owner has a "right of redemption" for a specified period after the tax sale. This right is outlined in the Official Code of Georgia Annotated (OCGA) § 48-4-40. During this period, which is typically 12 months from the date of the tax sale, the original owner can reclaim the property by paying the redemption price. However, until the right of redemption has been foreclosed, it remains open to the original property owner as well as other parties in interest.
The redemption price includes the amount paid at the tax sale, plus a premium of 20% for the first year or fraction of a year, 10% for the second year or fraction of a year thereafter (OCGA § 48-4-42). It should be noted that these percentages and what is included in the total claimed depends on the year in which the tax sale occurred, with the most recent changes applying to tax sales occurring after July 1, 2016.
What You Can Do During the Redemption Period
Secure the property: You have the right to secure the property to prevent vandalism or deterioration.
Perform basic maintenance: You can conduct essential maintenance to preserve the property's value.
Inspect the property: Regular inspections are allowed to ensure the property's condition.
Pay property taxes: You're responsible for paying any accruing property taxes during this period.
File for foreclosure: After the redemption period expires, you can initiate foreclosure proceedings (OCGA § 48-4-45).
What You Cannot Do During the Redemption Period
Take possession: You cannot occupy the property or remove the current occupants.
Make significant improvements: Avoid making substantial changes or improvements to the property.
Collect rent: If the property is occupied, you cannot collect rent from tenants.
Sell the property: While you can transfer your tax deed, you cannot sell the property outright.
The Importance of the Right of Redemption
The right of redemption serves several crucial purposes:
Protects original owners: It gives the original property owner a chance to reclaim their property, which is especially important in cases of oversight or financial hardship.
Ensures fair process: The redemption period provides a balanced approach to tax sales, allowing for correction of errors or misunderstandings.
Defines your rights: It clearly outlines what you can and cannot do with the property during this period, preventing legal complications.
Next Steps: After the Redemption Period
If the redemption period expires without the property being redeemed, you can proceed with foreclosing the right of redemption. This process, detailed in OCGA § 48-4-45, involves filing a petition in the superior court of the county where the land is located.
Once the foreclosure on the right of redemption is complete, your attorney will file and record the requisite documents in the Clerk’s Office where the property is located. This will demonstrate that you have completed your obligations to the previous owners and those having interest in the property. At this point, you can take possession, make improvements, or sell the property as you see fit.
It is important to note, however, that if you choose to sell the property and the Buyer wants to obtain Title Insurance as part of the purchase, you will likely need to first complete a Quiet Title Action to clear any outstanding interests affecting the property. We have more detailed blogs about this portion on our site, so feel free to explore!
Conclusion
Purchasing property at a tax sale in Georgia can be a valuable investment, but it's essential to understand and respect the right of redemption. By working with a seasoned real estate attorney and title agent, like Your Hometown Attorney, who will follow the guidelines outlined in this post and adhere to Georgia law, you can navigate this process successfully and potentially secure a profitable real estate investment.
Remember, while this blog provides general guidance, it's always advisable to consult with a legal professional familiar with Georgia property law, like Your Hometown Attorney, for specific advice tailored to your situation.
If you’d like to know more or have purchased property in Georgia at a tax sale and are ready to take the next steps in securing your investment, call Your Hometown Attorney today to schedule your Informational and Planning Meeting at 706-359-3332!