Delinquent Tax Certificate Sale

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DELINQUENT TAX CERTIFICATE SALE         
   
       CHAPTER 140 RSMo

 

  • Why do real estate owners let taxes become delinquent for three years or more
    • Owner dies, no heirs.
    • Owner dies, and none of the family members come forward to pay the taxes for various reasons.
    • The owner moves and the collector’s office is not notified.  The Post Office returns statements unclaimed.
    • Owner walks away from property unable to make payments to Mortgage Company or Bank.  For whatever reason the lending institution fails to foreclose.
    • Property owner abandons the property for varied reasons.
  • Why do Collectors have to offer property for sale when there are delinquent taxes?
    • The County Clerk will deliver the yearly tax books to the Collector and charge the Collector for the total amount of taxes due and payable. It is the Collector’s responsibility to collect the entire amount on those tax books.
    • Once the taxes are delinquent for two or more years, by law, the collector must offer the property for sale.
    • (In Carroll County property is offered when it is three years delinquent).
    • The County Tax Sale is conducted on the 4th Monday in August each year.
    • The properties are advertised in a general circulated newspaper for three consecutive weeks, at least 15 days prior to the sale date.
  • Waiting Period After Purchase
    • If the property is not redeemed before expiration of the waiting period, the holder of the Certificate of Purchase is entitled to a Collector’s Deed which is subject to section 140.405 RSMo. You will have between 12-18 months to get the collector’s deed.
    • If the title search indicates any such lien or claims, such person, lending agency and the current legal owner, must be notified by registered letter that they have 90 days from the receipt of said letter to redeem the property. If not redeemed after the expiration of said period, the tax lien purchaser will present a copy of the title search report along with a sworn affidavit that the above mentioned have been notified accordingly, and only then will the  Collector’s Deed be issued after all requirements have been met.
  • Third Offerings
                            The waiting period for Third offerings are different.  Properties are sold to the highest bidder.  It must cover the                                               taxes, interest, penalties, and costs under section 140.250 RSMo with a 90 day redemption period.
  • Subsequent Offerings
    • Collector may require a title search at his/her discretion, if he/she suspects there may be a lien or claim on record.
    • Otherwise there is no redemption period on post third offerings.
  • Redemption-Who may redeem?
    • Any persons having an interest shall have the right to redeem at any time during the one year redemption period, including the owner of the property.
    • Redemption does not change ownership of the property.
  • If Property is Redeemed
                                Person who redeems must pay all costs of the sale including interest not to exceed ten percent on the                                                            delinquent amount, eight percent interest on all subsequent paid taxes, and the cost to file a release                                                                of the Certificate of Purchase.
  • Let The Buyer Beware
    • Know the condition and location of the property you are bidding on.
    • There are no warranties or representations as to the property, its title or condition as property is sold “as is”.
    • No Bank or Mortgage Company will lend money on a Collector’s Deed, because you cannot purchase title insurance, unless you file suit in circuit court to quiet the title, which could cost several hundred dollars.
  • Bidders Rights
    • 1st, 2nd and 3rd offerings; at the time of sale, you are only purchasing the tax lien and not the property.
    • You have no ownership rights.
    • You cannot gain immediate possession of the property.
    • You can make no improvements, destroy or tear down any existing structures, fences or any other improvement regardless of the condition, lease or rent. 
    • None of the foregoing can be done, until such time as a Collector’s Deed is issued.
  • Who May Bid?
    • Any Missouri resident that is currently not delinquent on any property tax and at least 18 years of age.  A sworn agreement stating such, must be given to the collector prior to the auction. Failure to sign such affidavit as well as signing a false affidavit may invalidate the sale.
    • Out of state bidders may bid after filing an agreement with the collector as required in RSMo 140.190.
  • Bidding Procedure
    • Collector will give the parcel number as published in the weekly record paper and announce whether it is a 1st, 2nd, 3rd, or 4th (Subsequent Offering). 
    • Announce the property owner’s name and the legal description and the amount of total costs pertaining to the said property.
    • Request bids for said tract, initial bid must be for the amount of taxes, interest, penalties, recording, and advertising fees.
    • Subsequent bids must be in increments of at least five dollars.
    • When the bidding ceases, the highest bidder will give the bidder number, and agree to pay the total amount of the bid at the conclusion of the tax sale.
    • Section 140.280 states if purchaser fails to pay bid, a fee of 25% of bid must be paid plus $5.00 to the prosecuting attorney for recovering this.  Buyers must pay the amount of the bid at the conclusion of the sale.

The Collector and his/her staff are not attorneys and cannot interpret the statues for the buyer.  For interpretation of the law, please consult an attorney.



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MISSOURI COLLECTORS BACK TAX SALE MANUAL


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