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I just purchased some vacant land through a county tax lien auction and received a quit claim deed. What is the process/costs involved in turning the deed into a warranty deed. Any advice is appreciated.
You will need to go to a closing agent either title company or attorney that can do a title search and then issue you a title insurance policy. They will at that time record a new "warranty deed". Depending on what your plans are for the property it may or may not be worth the cost.
My thoughts, but a real estate attorney can clarify any shortcomings and/or put a finer point on it, and YOUR location may have variations in practice:
The deed is granted by the seller to the buyer. The county (seller) will not revise the deed to a warranty deed. They will not guarantee title. IMO, really, all you bought was a license to hunt for issues on that property that may compromise your claim to title, and the county confirmed to you they vacate all of their claims.
IF you are thinking of re-selling, you can just grant a warranty deed to your buyer. Or even sell it to your LLC, your marital unit, IOW, yourself.
Et voila! Warranty deed.
You need a really comprehensive title search by a qualified professional who will tell you, with full culpability for error or omission, that it is safe to guarantee marketable and insurable title before you provide a general warranty deed to another party.
You need a real estate attorney or title company, whatever is the common method in your area.
Last edited by MikeJaquish; 01-27-2017 at 05:09 AM..
I have news for you: there is no way that you will be issued a Warranty Deed. The County, as Grantor, will not do that. When you go to transfer the property, YOU can grant a Warranty Deed, but I would recommend that you NOT do so unless a title company will back your conveyance with title insurance. A title company may issue a policy, but since you acquired the property at tax auction (and you appear to be in Michigan), a title company may require a quiet title action before they will provide title insurance. (I have heard it go both ways.) The risk of granting a Warranty Deed without title insurance would be that the person could come back at you to fix any defects in title, should they be discovered. And since you acquired title through a tax auction, that risk is greater.
If you're concerned about having clear title to the property, you should consult with a real estate attorney and discuss the possible need of doing a quiet title action. (Have you first researched the title to make sure that there are no remaining state or federal liens?) Frankly, if the lot isn't worth that much--and especially if it's in Detroit--I would just sit tight and let some time pass. Since tax foreclosure wipes out most liens and encumbrances in Michigan--and does not allow any redemption rights once foreclosed--there is relatively little chance that someone is going to claim title to your property. Of course, there's always that chance that someone may come out of the woodwork (if they weren't legally notified about the tax sale could be one scenario). If the property is worth a considerable amount, then you may want to go that extra step to assure clear title...so don't consider this to be legal advice, just practical advice. You'll need to weigh the potential costs (perhaps a few thousand) against the value of your peace of mind.
In Texas, a home owner has up to 2 years to pay the debt and claim the property back. You would not receive a clear title until this time frame has passed. If it was a non-homestead property, they only get 6 months.
Very risky to buy one and move your family in as the original home owner can claim it very easily (well, if they have money).
In Texas, a home owner has up to 2 years to pay the debt and claim the property back. You would not receive a clear title until this time frame has passed. If it was a non-homestead property, they only get 6 months.
Very risky to buy one and move your family in as the original home owner can claim it very easily (well, if they have money).
His most recent post (albeit from March 2016) concerned his Detroit condo, so there's a good chance that this is a property in Michigan. In Michigan, there are no redemption rights once a property is foreclosed upon for back taxes. Here, real estate is "forfeited" to the County after only two years of back taxes. The owner has one year to pay the taxes and redeem the property. If he fails to do so, the property is foreclosed upon, wiping out most liens and encumbrances, and the owner has no further redemption rights. It is then sold at auction.
Quote:
Originally Posted by ISONY
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I have news for you: there is no way that you will be issued a Warranty Deed. The County, as Grantor, will not do that. When you go to transfer the property, YOU can grant a Warranty Deed, but I would recommend that you NOT do so unless a title company will back your conveyance with title insurance. A title company may issue a policy, but since you acquired the property at tax auction (and you appear to be in Michigan), a title company may require a quiet title action before they will provide title insurance. (I have heard it go both ways.) The risk of granting a Warranty Deed without title insurance would be that the person could come back at you to fix any defects in title, should they be discovered. And since you acquired title through a tax auction, that risk is greater.
If you're concerned about having clear title to the property, you should consult with a real estate attorney and discuss the possible need of doing a quiet title action. (Have you first researched the title to make sure that there are no remaining state or federal liens?) Frankly, if the lot isn't worth that much--and especially if it's in Detroit--I would just sit tight and let some time pass. Since tax foreclosure wipes out most liens and encumbrances in Michigan--and does not allow any redemption rights once foreclosed--there is relatively little chance that someone is going to claim title to your property. Of course, there's always that chance that someone may come out of the woodwork (if they weren't legally notified about the tax sale could be one scenario). If the property is worth a considerable amount, then you may want to go that extra step to assure clear title...so don't consider this to be legal advice, just practical advice. You'll need to weigh the potential costs (perhaps a few thousand) against the value of your peace of mind.
Thanks. Yes, property is in Michigan and it was my understanding that the tax foreclosure does wipe out most liens. The property is not worth much so I'm not concerned now, but thinking down the road when I want to sell or possibly build on it.
I just purchased some vacant land through a county tax lien auction and received a quit claim deed. What is the process/costs involved in turning the deed into a warranty deed. Any advice is appreciated.
I buy similar properties in Louisiana.
QUESTIONS TO GET REAL ANSWERS:
1) Do you have a signed certified letter indicating the former owner(s) were notified of their tax delinquencies?
2) Do you have a photo of a sign you placed on the property indicating that taxes were due by the owners?
3) Have you contacted the former owners via email about their tax obligations and received a response?
4) Have you contacted the former owners via Twitter, Facebook or other online media about their tax obligations and received a response?
If you respond NO to all 4 questions then your deed could be challenged in court and revoked through a legal procedure called an ANNULMENT of tax sale by the former owners. You will receive repayment of all paid taxes plus interest, so it is not a total loss.
I understand that it is unfair from your perspective but take note that this can happen to someone else who buys the land from you and develops it.
To fix this problem, perform actions in one of the four questions with a response and then request a RELINQUISHMENT (a document that indicates they no longer want any claim to the land and give all rights to you, must be signed in presence of a notary).
QUESTIONS TO GET REAL ANSWERS:
1) Do you have a signed certified letter indicating the former owner(s) were notified of their tax delinquencies?
2) Do you have a photo of a sign you placed on the property indicating that taxes were due by the owners?
3) Have you contacted the former owners via email about their tax obligations and received a response?
4) Have you contacted the former owners via Twitter, Facebook or other online media about their tax obligations and received a response?
If you respond NO to all 4 questions then your deed could be challenged in court and revoked through a legal procedure called an ANNULMENT of tax sale by the former owners. You will receive repayment of all paid taxes plus interest, so it is not a total loss.
I understand that it is unfair from your perspective but take note that this can happen to someone else who buys the land from you and develops it.
To fix this problem, perform actions in one of the four questions with a response and then request a RELINQUISHMENT (a document that indicates they no longer want any claim to the land and give all rights to you, must be signed in presence of a notary).
Not so. The property is in Michigan and tax foreclosures are done differently here. The County is responsible for notifying the delinquent taxpayer. That is done through certified mail, a sign posted on the property, and also through publication in a newspaper. If the taxes are unpaid in year two, the property is forfeited to the County and the taxpayer has one year to pay the taxes and redeem the property. If not paid, it goes to Court and the property is formally foreclosed upon, with no redemption rights remaining to the former owner. The OP mistakenly used the term "tax lien", implying that it was only a tax lien that was purchased as in other states. Michigan did away with that system years ago. Now we just have a simplified Draconian tax foreclosure law. On average over the last few years, over 20,000 properties have been lost each year to tax foreclosure--and that's just in Wayne County.
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