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I bought a condo at the Wayne county tax auction Detroit Michigan. We been working on it for about a month we just received a letter from the law office representing the HOA stating we have 30 days to pay $19,875.00. This is for back dues, fines, lawyers fees etc. This is from a previous owner NOT me. Is this legal? How can I fight this? I DO NOT $20,000.
A lien is an encumbrance on a property that prevent it from being transferred until the lien is satisfied. When you buy something at a tax sale, it generally does not guarantee clear title. So it is likely to be very legal. I would work with the HOA to try and settle this.
In Michigan from my research the only lien that can survive though a tax sale is IRS liens.
From Are their liens on the properties sold at tax auction? | MichiganTaxForeclosureAuctions.com
No, the only lien that can survive a tax foreclosure is an IRS lien. All other encumbrances are cancled by order of the Circuit Court (per PA 123 of 1999). You should still attempt to do your own research prior to buying any property at tax auction. As a reminder, all property is still subject to DEQ regulations, city and township zoning and any deed restrictions such as homeowner associations.
I would hire an attorney, don't deal with their attorney without one of your own. To write them and tell them the law. They most likely know the law, but they want to try and trick you into paying anyway.
I'd be on the telephone with the Attorney who handled the closing for you - something like this should NOT slip past an Attorney and/or a Title Search.
- Or did you handle the closing yourself?
On tax properties at auction there is no "closing" you bid on the property at the courthouse step, if you win, you have a time frame to go into the court house and pay the money.
When you pay they give you either a tax certificate or a tax deed( many names in every state).
Only a few states do you actually own it at auction, in many you only get a tax certificate that you must hold on to for a time frame to turn it in latter for a deed.
But in tax properties there is no closing, no attorneys, just you bidding on the property ( and normally yes actually outside at the court house steps)
Thanks for the correction Chuck. I'd give myself a reddie if I coulc
Quote:
Originally Posted by Fr_Chuck
Where I am the list of which properties are going up for auction is published. It is recommended (as part of the legal wording on the list) that prospective buyers check for tax liens, HOA liens, etc. before bidding. IF the bid is accepted there is a window during which a buyer can verify/check/do whatever and then either move forward or back away (with a refund of the deposit given at the auction).
This is why a property could be auctioned this month and be back on the block on a month or two - in my area the listing will say something along the lines of "deal not completed." That's a dead giveaway that something has gone wrong.
People often go to an auction with a pre-approved mortgage (in my area) but within that window the bank runs the property and declines. Suddenly the property is back on the market.
My late husband DID buy property in this manner - if his bid was accepted he then RAN the info to his Attorney to run a check on what MIGHT be owed. If the property wasn't clean or there was no PROOF it was clean, then he turned away from the deal.
I appreciate that buying at foreclosure or auction sounds like a great idea and you hear about great properties at great prices... but unless you know what you are doing it's a recipe for disaster.
Obviously different auctions in different places run things in a different manner.
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