How long does the taxpayer have to reclaim property sold at a state tax sale?

02/12/2007 - Taxes - State: SC #672

Full Question:

When someone purchases land from a state tax sale, how long does the taxpayer have to reclaim the tax sale property? How does one gain full fee simple rights to the property.

Answer:

Title 12 - Taxation CHAPTER 51.

SECTION 12-51-60. Payment by successful bidder; receipt; disposition of proceeds.
The successful bidder at the delinquent tax sale shall pay legal tender as provided in Section 12-51-50 to the person officially charged with the collection of delinquent taxes in the full amount of the bid on the day of the sale. Upon payment, the person officially charged with the collection of delinquent taxes shall furnish the purchaser a receipt for the purchase money. He must attach a copy of the receipt to the execution with the endorsement of his actions, which must be retained by him. Expenses of the sale must be paid first and the balance of all delinquent tax sale monies collected must be turned over to the treasurer. Upon receipt of the funds, the treasurer shall mark immediately the public tax records regarding the property sold as follows: Paid by tax sale held on (insert date). All other monies received, including any excess after payment of delinquent taxes, assessments, penalties, and costs, must be retained, paid out, and accounted for by the delinquent tax collector. Once a tax deed has been issued, the defaulting taxpayer and the owner of record immediately before the end of the redemption period must be notified in writing by the delinquent tax collector of any excess due. The notice must be addressed and mailed in the manner provided in Section 12-51-40(b) for taking exclusive possession of real property. Expenses of providing this notice are considered costs of the sale for purposes of determining the amount, if any, of the excess.

SECTION 12-51-80. Settlement by treasurer.
The treasurer shall make full settlement of tax sale monies, within thirty days after the sale, to the respective political subdivisions for which the taxes were levied. Proceeds of the sales in excess thereof must be retained by the treasurer as otherwise provided by law.

SECTION 12-51-90. Redemption of real property; assignment of purchaser's interest.
(A) The defaulting taxpayer, any grantee from the owner, or any mortgage or judgment creditor may within twelve months from the date of the delinquent tax sale redeem each item of real estate by paying to the person officially charged with the collection of delinquent taxes, assessments, penalties, and costs, together with interest as provided in subsection (B) of this section. If prior to the expiration of the redemption period, the purchaser assigns his interest in any real property purchased at a delinquent tax sale, the grantee from the successful bidder shall furnish the person officially charged with the collection of delinquent taxes a conveyance, witnessed and notarized. The person officially charged with the collection of delinquent taxes shall replace the successful bidder's name and address with the grantee's name and address in the delinquent tax sale book.

(B) The lump sum amount of interest due on the whole amount of the delinquent tax sale based on the month during the redemption period the property is redeemed and that rate relates back to the beginning of the redemption period according to the following schedule:

Month of Redemption Period Amount of Interest Imposed, Property Redeemed
First three months, three percent of the bid amount
Months four, five, and six, six percent of the bid amount
Months seven, eight, and nine, nine percent of the bid amount
Last three months, twelve percent of the bid amount.

However, in every redemption, the amount of interest due must not exceed the amount of the bid on the property submitted on behalf of the forfeited land commission pursuant to Section 12-51-5.

(C) If the defaulting taxpayer, grantee from the owner, or mortgage or judgment creditor fails to redeem the item of real estate sold at the delinquent tax sale within the twelve months provided in subsection (A) and after the passing of an additional twelve months, the tax deed issued is uncontestable on procedural or other grounds.

SECTION 12-51-100. Cancellation of sale upon redemption; notice to purchaser; refund of purchase price.
Upon the real estate being redeemed, the person officially charged with the collection of delinquent taxes shall cancel the sale in the tax sale book and note thereon the amount paid, by whom and when. The successful purchaser, at the delinquent tax sale, shall promptly be notified by mail to return the tax sale receipt to the person officially charged with the collection of delinquent taxes in order to be expeditiously refunded the purchase price plus the interest provided in Section 12-51-90.

SECTION 12-51-110. Personal property shall not be subject to redemption; purchaser's bill of sale and right of possession.
For personal property, there is no redemption period subsequent to the time that the property is struck off to the successful purchaser at the delinquent tax sale. Upon payment by the successful purchaser and delivery of the duplicate warrant (i.e. tax receipt) with description and notation by the person officially charged with the collection of delinquent taxes, he shall deliver to the successful purchaser the following form properly executed which is his bill of sale and right of possession:
"Sold to __________ at Delinquent Tax Sale on __________, who is the successful purchaser of personal property sold for delinquent taxes. _______________________________________ (Officer Charged with Tax Collection)".

SECTION 12-51-120. Notice of approaching end of redemption period.
Neither more than forty-five days nor less than twenty days before the end of the redemption period for real estate sold for taxes, the person officially charged with the collection of delinquent taxes shall mail a notice by "certified mail, return receipt requested-restricted delivery" as provided in Section 12-51-40(b) to the defaulting taxpayer and to a grantee, mortgagee, or lessee of the property of record in the appropriate public records of the county. The notice must be mailed to the best address of the owner available to the person officially charged with the collection of delinquent taxes that the real property described on the notice has been sold for taxes and if not redeemed by paying taxes, assessments, penalties, costs, and interest at the applicable rate on the bid price in the total amount of ___ dollars on or before ___ (twelve months from date of sale) (date) __________, a tax title must be delivered to the successful purchaser at the tax sale. Pursuant to this chapter, the return of the certified mail "undelivered" is not grounds for a tax title to be withheld or be found defective and ordered set aside or canceled of record.

SECTION 12-51-130. Execution and delivery of tax title; costs and fees; overages.
Upon failure of the defaulting taxpayer, a grantee from the owner, a mortgagee, a judgment creditor, or a lessee of the property to redeem realty within the time period allowed for redemption, the person officially charged with the collection of delinquent taxes, within thirty days or as soon after that as possible, shall make a tax title to the purchaser or the purchaser's assignee. Delivery of the tax title to the clerk of court or register of deeds is considered "putting the purchaser, or assignee, in possession". The tax title must include, among other things, the name of the defaulting taxpayer, the name of any grantee of record of the property, the date of execution, the date the realty was posted and by whom, and the dates each certified notice was mailed to the party or parties of interest, to whom mailed and whether or not received by the addressee. The successful purchaser, or assignee, is responsible for the actual cost of preparing the tax title plus documentary stamps necessary to be affixed and recording fees. The successful purchaser, or assignee, shall pay the amounts to the person officially charged with the collection of delinquent taxes before delivery of the tax title to the clerk of court or register of deeds and, upon payment, the person officially charged with the collection of delinquent taxes is responsible for promptly transmitting the tax title to the clerk of court or register of deeds for recording and remitting the recording fee and documentary stamps cost. If the tax sale of an item produced more cash than the full amount due in taxes, assessments, penalties, and costs, the overage must be applied to any outstanding municipal tax liens on the property. Any remaining overage belongs to the owner of record immediately before the end of the redemption period to be claimed or assigned according to law. These sums are payable ninety days after execution of the deed unless a judicial action is instituted during that time by another claimant. If neither claimed nor assigned within five years of date of public auction tax sale, the overage shall escheat to the general fund of the governing body. Before the escheat date unclaimed overages must be kept in a separate account and must be invested so as not to be idle and the governing body of the political subdivision is entitled to the earnings for keeping the overage. On escheat date the overage must be transferred to the general funds of the governing body.

SECTION 12-51-135. Removal of erroneously issued warrants.
If a warrant, which has been filed with the clerk of court in any county, is determined by the Department of Revenue to have been issued and filed in error, the clerk of court, upon notification by the Department of Revenue, must remove the warrant from its book.

SECTION 12-51-140. Notice to mortgagees.
The provisions of Sections 12-49-210 through 12-49-300, inclusive, relating to notice to mortgagees of proposed tax sales and of tax sales of properties covered by their respective mortgages are adopted as a part of this chapter.

SECTION 12-51-150. Official may void tax sales.
If the official in charge of the tax sale discovers before a tax title has passed that there is a failure of any action required to be properly performed, the official may void the tax sale and refund the amount paid, plus interest in the amount actually earned by the county on the amount refunded, to the successful bidder. If the full amount of the taxes, assessments, penalties, and costs have not been paid, the property must be brought to tax sale as soon as practicable.

SECTION 12-51-160. Deed as evidence of good title; statute of limitations.
In all cases of tax sale the deed of conveyance, whether executed to a private person, a corporation, or a forfeited land commission, is prima facie evidence of a good title in the holder, that all proceedings have been regular and that all legal requirements have been complied with. An action for the recovery of land sold pursuant to this chapter or for the recovery of the possession must not be maintained unless brought within two years from the date of sale as provided in Section 12-51-90(C).



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02/12/2007 - Category: Taxes - State: SC #672

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