8:00am - 5:00pm
Monday - Friday (or by appt)
(205) 293-5293
Select Page

What does a tax lien purchaser have to do to quiet title to vacant land?  That was the question in a recent appeal before the Alabama Court of Civil Appeals. Lawyers from Browne House Law were pleased to be able to help their client and win that appeal.

Over the objection of an earlier lienholder, the appeals court held that the tax lien purchaser’s actions to regularly mow a vacant lot, clean it of debris after a storm, and explore development was sufficient to exercise ownership over the property and quiet title.

What are tax lien sales?

In Alabama, when property tax is not paid, that obligation can be sold to private investors. The government uses it as a way to recoup money immediately, in exchange the government gives the purchaser a  path to owning the property. The purchaser of the tax lien may in some cases become the owner of the property – free and clear of the earlier owner’s interest.

Most of the time, the purchaser of the tax lien will not become the sole owner of the property. Usually, the tax lien is redeemed, but with interest and costs like attorney fees tacked on. The owner and other earlier lien holders can redeem the property within three years through an administrative process.  After that, the original owner has to go to court to clear up and remove the tax lien.

Sometimes the tax lien purchaser can become the owner.

On occasion, the tax lien purchaser can become the owner of the tax lien property – free and clear. For this to happen, there must be a special form of adverse possession by the tax lien purchaser. That generally requires that the potential new owner exercise dominion and control over the property. How much dominion and control must be exercised over vacant land to satisfy adverse possession was the issue in Ross v. Clark Property Management, LLC.

How do you exercise ownership over vacant land?

What do you do with an empty lot? if there is not a building, crops, timber, or something of value on a piece of land how might you maintain that land? In Ross, the tax lien purchaser paid to have someone mow the grass for 9 months of the year. After a big storm, the tax lien purchaser removed branches and debris. And the tax lien purchaser made inquiries about developing the land (i.e., putting some sort of building on it).

The Court noted that there was not a sign posted on the property. One way a tax lien purchaser might show their dominion and control of the property would be to put up “NO TRESPASSING” or similar signs. But a sign is not required.

The Appeals Court’s Decision

In the end, the Court of Civil Appeals upheld the trial court’s determination that the tax lien purchaser had done enough to adversely possess the vacant land and quiet title to the property. If there is a significant lesson from this case it is that the court continues to treat vacant land differently and do not require a fence, signs, building, or agriculture to quiet title to this type of property. What the minimum required conduct is, we do not know. However, if you are investing in tax liens, it’s best to talk to your lawyer about how best to show the world and the court that you are exercising dominion and control over your tax lien properties.

Where to learn more: