Tax Certificate Investor Research
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| Tax
Certificate Investor Note: The reason for searching back 10 years is
simple. You want to find out if there are any unpaid liens recorded
against a prior owner that may be attached to the property, and become
your responsibility should you become the tax deed owner. This is not a
typical issue, but I have seen it frequently enough in Florida for it
to be a concern |
(1) Searching by Name
Marion County provides a good example for illustration of how to locate documents recorded in the official public records. The current link to the Marion County Official Records page is:
here.
Tax Certificate Investor:
Finding Documents of Interest
Once inside the official search portal, start your search by the owner named on the tax certificate listing. The search results will be a list of all documents recorded for that name.- (1) the name searched,
- (2) the legal description of the target property,
- (3) documents of conveyance (deed, judgment), and
- (4) judgments, liens, orders issued by a government body.
- Check Grantee or Grantor
In your search, you are looking for documents that identify the current owners. Check to find out if the name that you searched is listed as the Grantee or Grantor of the recorded document. The grantee is the buyer or receiver of the document, while the grantor is the seller or document issuer. - Name searched = Grantee
If the document is the most recently recorded deed or judgment and the search name is listed as the grantee, you have found the target document. This is the document that shows that the property owner bought the property. When more than one grantee is listed, take note of all persons listed as grantee; this will be needed for your next search. You will want to do a name search for each owner. As you search the names, view the returned pages and take note of any liens, judgments or actions issued by the government. - Name searched = Grantor
If the document is the most recently recorded conveyance, the tax certificate is most likely showing the name of a prior owner. For the next step in your search, note all persons listed as grantee, then search by those names. - Name searched = Not the Grantee or Grantor
If name search does not return as grantee or grantor of property, move on to next certificate. This tax certificate will most likely present problems. - Conveyance Document Not Found
In some instances, a conveying document containing all three elements may not be found. There are three scenarios that should be checked.- Not Online
The document may have been recorded before the online search became available. You will need to locate the records at the courthouse at the Clerk of Circuit Court office. - Not the Property Owner
The person named in the search may not be the property owner. - Different Name on Recording Document
A derivative of the name could have been used when the document was recorded.
- Not Online
Focus on records containing
Open the most recently recorded document that contains all three elements (right name, right legal description and right type of document). If no documents can be found that contain all three elements, run the search by last name only.
| Tax
Certificate Investor Note:You will want to become familiar with the
abbreviations used in the document type field. Knowing the
abbreviations will allow you to select only the documents that are of
interest. Not all notices will be found online. Lien notices are
available for view, but some judgments will not be available. If I find
a lien without finding a document showing satisfaction or release of
the lien and the lien amount is substantial, I typically stop my
analysis and move on to the next certificate |
| Tax
Certificate Investor Note: If you find a lis pendens document during
your search, don’t be alarmed. A lis pendens is a written notice that a
lawsuit has been filed involving title to the property, a claimed
ownership interest or named party which you are searching. It is one of
the lead pleadings "documents" for a foreclosure. If the property is
being foreclosed, the taxes will be paid and the certificate redeemed.
The same holds true for most association liens which are foreclosed. If
someone is spending the money to foreclose, they or the subsequent
owner will redeem the property before losing it for non-payment of
taxes. |
(2) Search by Legal Description
Once you have completely reviewed the lien status of all persons on your grantee list and have found no liens that will survive a tax deed issuance, conduct a search by legal description.
When you are unable to do a search by legal description, an alternative is to extend the name search to prior property owners. If the property has been conveyed within the last 10 years by non-warranty deed, it is advisable to conduct a name search on all known owners of the property.
On sites where searching by legal description is available, you will find that a partial legal description will suffice. This is helpful in cross checking your name search findings.
When searching by legal description, all conveyances, liens, satisfactions, judgments, and actions associated with that legal description will be returned. So, if you found earlier in your name search that person xyz was the grantee of lot 2 recorded in book 111 page 222, the same will hold true and be found when searching by legal description. This is redundant, but can be very helpful when the owner has a common name that resulted in turning up hundreds of records during the name search.
Tax Certificate Investor
Additional Searches
Counties, such as Nassau, allow search of official records by criteria other than name or legal description, including book/page, instrument, etc. Generally, you do not need to pursue information to this depth for tax certificate purchases.
Tax Certificate Investor
Please see other tax certificate investor research page to get a full understanding of the remainder of this page(link at top of page).
For tax certificate purchasing, an assessment that the property is “probably” a good risk is adequate to make the purchase. Taking the extra steps to confirm utility location and property aesthetics will add to the time and cost of your research and may be a hindrance when evaluating more than a few properties.
At this point, your risk is relatively low considering that 95% of the tax certificates get redeemed. Properties with homestead exemption have an even higher redemption rate, getting redeemed within the first 4 months 99% of the time. In all likelihood, if you purchase a property that does not involve bankruptcy, is not a DRA and is buildable, the certificate will be redeemed.
My advice is to research alternate properties for every tax certificate you intend to purchase. Bidding at the sale is competitive. By passing on those certificates receiving the most bids (resulting in very low interest), you can maximize your profit.
I have frequently seen tax certificates issued with 0% interest bid on large tracts of land or expensive homes. I can only imagine that the investor made the bid believing that they would eventually receive the tax deed for a valuable property. While this can happen, it is rare. The most likely outcome is that the certificate will be redeemed and the investor will receive the interest earned.
| Tax
Certificate Investor Note: Typically, I lose interest in bidding at the
sale when the rate falls below 15%. An exception is when the property
owners do not reside in the county. In this case, the likelihood of the
tax certificate yielding 2 years of interest is increased. Still, my
level of interest stops at 12%. |
The information provided herein is the opinion of the Author and is not to be construed nor interpreted, directly or indirectly, as legal or professional advice. Utilizing this information will be at users own risk and shall hold harmless the Author, James A. Mikel.
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