Tax Sale / Property Issue. Need advice.

[Walkoflife]

What is the name of your state? IN

Before I start, I already know I'm dumb and totally did things wrong. I simply need to know my options to unravel this mess.

So I have/had (depends on how you look at it) two parcels of property in Indiana. 15 months ago, I sold them to two separate people - cash in exchange for a handwritten "receipt". I indicated to them I had no clue as to how to quitclaim the property to them, and they indicated they would handle that formality and have me sign off.

That hasn't happened to this day.

Back in September of this year, I was curious as to what the assessed value of the home was. Upon checking the County GIS site, I noticed that taxes were overdue. So I call the assessor, who tells me the parcels were heading to tax sale in October.

"How in the dickens can that happen? I was never informed taxes were due!"

The lady from the assessor's office replies, "Your tax bills have been sent back to us marked RTS. They were sent to the address of the property with a mailbox" (the other parcel is a garage).

Now, I know most individuals know that if you own property, you have a tax bill. Why wouldn't the de facto owners have at least inquired about the tax bills they sent back - bills clearly marked "TAX BILL"? Did they think taxes were free?

Fast-forward to today, the parcels were indeed sold at the county tax sale. I can redeem the taxes, but then the two individuals are off the hook. On paper, their receipt proves they exchanged cash for parcels, making them at least somewhat owners of the property. However, I am the deeded owner.

I would like to get these properties back. One parcel (with a house on it) is being rented for income. My initial thought is to refund the purchase price, minus the costs to recall from tax sale, minus what they have made in rental income to date.

Is that feasible? What options do I have (if any)?

 

[Zigner]

What is the name of your state? IN

Before I start, I already know I'm dumb and totally did things wrong. I simply need to know my options to unravel this mess.

So I have/had (depends on how you look at it) two parcels of property in Indiana. 15 months ago, I sold them to two separate people - cash in exchange for a handwritten "receipt". I indicated to them I had no clue as to how to quitclaim the property to them, and they indicated they would handle that formality and have me sign off.

That hasn't happened to this day.

Back in September of this year, I was curious as to what the assessed value of the home was. Upon checking the County GIS site, I noticed that taxes were overdue. So I call the assessor, who tells me the parcels were heading to tax sale in October.

"How in the dickens can that happen? I was never informed taxes were due!"

The lady from the assessor's office replies, "Your tax bills have been sent back to us marked RTS. They were sent to the address of the property with a mailbox" (the other parcel is a garage).

Now, I know most individuals know that if you own property, you have a tax bill. Why wouldn't the de facto owners have at least inquired about the tax bills they sent back - bills clearly marked "TAX BILL"? Did they think taxes were free?

Fast-forward to today, the parcels were indeed sold at the county tax sale. I can redeem the taxes, but then the two individuals are off the hook. On paper, their receipt proves they exchanged cash for parcels, making them at least somewhat owners of the property. However, I am the deeded owner.

I would like to get these properties back. One parcel (with a house on it) is being rented for income. My initial thought is to refund the purchase price, minus the costs to recall from tax sale, minus what they have made in rental income to date.

Is that feasible? What options do I have (if any)?

Why do you think you have any rights to the property that you sold?

You need to speak to a real estate attorney, not an internet forum.

 

[Walkoflife]

Why do you think you have any rights to the property that you sold?

You need to speak to a real estate attorney, not an internet forum.

Because there is no clear indication that I don't have rights.

If the tax lien purchaser redeems this property, I'm pretty sure I would be sued by the individuals who bought the property since all they have is a signed receipt (that was never recorded) and the deed is still in my name.

 

[Zigner]

Because there is no clear indication that I don't have rights.

If the tax lien purchaser redeems this property, I'm pretty sure I would be sued by the individuals who bought the property since all they have is a signed receipt (that was never recorded) and the deed is still in my name.

You don't OWN the property - the rest is paperwork.

 

[LdiJ]

You don't OWN the property - the rest is paperwork.

I agree that the OP no longer owns the property. The buyer was free to put the deed in his/her name at any time. However, I think that the OP is the only one who has the right to redeem the property from the tax sale, specifically because the buyer did not do so before the property was sold at the tax sale.

OP, you really need to tell the buyers that the property was sold at a tax sale because they never put the deed in their name nor paid the property taxes. You can offer to redeem the property for them if they provide you the cash up front to do so. Its only right that you notify them what is going on, since they clearly don't know. You probably should have notified them before the tax sale happened.

 

[Walkoflife]

I agree that the OP no longer owns the property. The buyer was free to put the deed in his/her name at any time. However, I think that the OP is the only one who has the right to redeem the property from the tax sale, specifically because the buyer did not do so before the property was sold at the tax sale.

OP, you really need to tell the buyers that the property was sold at a tax sale because they never put the deed in their name nor paid the property taxes. You can offer to redeem the property for them if they provide you the cash up front to do so. Its only right that you notify them what is going on, since they clearly don't know. You probably should have notified them before the tax sale happened.

Morally, the right thing to do is exactly what you stated, @LdiJ - tell these folks that the house they bought went to tax sale due to their negligent handling of tax bills and (what appears to be) blatant disregard for Indiana tax law. Given the fact these folks own numerous properties, I have a hard time believing that they wouldn't at least inquire about taxes owed during their ownership tenure. At least two tax due dates have passed, and they more than likely paid taxes on their other properties - but not the one I sold them? Come on. I hardly think these people classify as "ignorant".

Immorally, I could let them hang themselves. After all, @Zigner stated the obvious: I DO NOT own the property, and therefore have no obligation to do anything more than watch this all unfold. Should the tax lien buyer eventually file for a tax deed, guess they'll find out the hard way that all transactions should be finished properly, and taxes should be squared away from the get-go (a simple call to the treasurer could have ended all this). I am under no obligation to give these owners anything more than I did - my handwritten promise that their monies gave them each one parcel.

Legally, I (the deeded owner) have to be served notice within 90 days of the sale that the parcels' taxes were sold, and state my right to redemption. This is where Mr. Zigner's "paperwork" formality comes into play because ON PAPER, the assessor believes I own the property; they have no clue as to if or when an exchange took place. Legally, if I do not receive notice, I can motion to set aside the sale for procedural defects. Buyer is refunded, and I can pay this tax bill myself (or get these clowns to do it).

54 calendar days have passed. No notice received to date.

My goal, however, is to somehow reverse this sale. I take property taxes seriously - I pay my current residential taxes the day they come out.

One can scream "well I never received notice of taxes owed", yet the assessor's own words - "Our bills marked TAX BILL in bold on the front of the envelope were returned to us" - would be the current owners' undoing.

So if there is a means to simply reverse this mess, I would entertain advice as to how.

 

[Zigner]

So if there is a means to simply reverse this mess, I would entertain advice as to how.

I'm going to ignore your various conclusions and just tell you that you will want to talk to an attorney to help you untangle this mess that you participated in causing.

 

[LdiJ]

I would also like to point out that it would be against the law for them to open your mail, so even if the envelope said "tax notice" they legally could not open it.

 

[Zigner]

I would also like to point out that it would be against the law for them to open your mail, so even if the envelope said "tax notice" they legally could not open it.

That's a good point - one has to wonder why the OP didn't have his mail forwarded...