Tax Lien Sale Q & A
Peyton C. Cochrane
Tuscaloosa County Courthouse
714 Greensboro Avenue, Room 124
Tuscaloosa, AL 35401-1891
Phone: (205) 464-8230
Tuscaloosa County Courthouse
714 Greensboro Avenue, Room 124
Tuscaloosa, AL 35401-1891
Where can I find a copy of the statutes regarding tax lien auctions in your County?
The Code of Alabama Title 40, Article 7, 40-10-180 through 40-10-200. Act 2018-577
What authorizes the Tuscaloosa County Tax Collector’s Office to hold a tax lien auction?
Act 2018-577, providing counties an alternative remedy for collecting delinquent property taxes by the sale of a tax lien. This law vests the taxing official with the authority to use either the sale of a tax lien or the sale of property to collect delinquent property taxes each year.
What is a tax lien auction and what is its purpose?
A tax lien auction is the public sale of all tax liens advertised under Alabama Code § 40-10-182 and held no earlier than March 1 or later than June 15 of the current ad valorem tax year where the awarding of the tax lien certificate is based on the lowest interest rate bid on a tax lien.
The purpose of the tax lien auction is to secure payment of delinquent real property taxes in Tuscaloosa County. Tuscaloosa County property owners are required to pay property taxes annually to the Tax Collector. Real property taxes become due and payable on October 1 of each year, and become delinquent if not paid before midnight, December 31.
The Tax Collector is authorized to secure payment of delinquent taxes through a tax lien auction, in which the perpetual first priority lien provided by Alabama Code § 40-1-3 is sold and transferred to a purchaser through a public auction, to recover any taxes assessed and levied against the property, along with interest, penalties, fees, and costs.
What is the date, time, and location of Tuscaloosa County's tax lien auction?
Date: April 20, 2021
Time: Auction starts at 10:00 AM (CST) and will continue until 1:00 PM (CST) until the auction is complete.
Online Auction- GovEase.com
Tuscaloosa County has elected to conduct its tax lien auction online for tax year 2020 delinquent properties.
Bids will be transmitted and received through the internet using a computer and web browser.
Will training be available on how to use the GovEase.com auction platform?
Yes. GovEase Auction, LLC will provide online training and have instructional videos to assist in the tax lien auction process. These videos are available at GovEase.com.
How often do you hold the tax lien auction?
The tax lien auction is held once per year, between March 1 and June 15. For tax year 2020, the online live auction will begin at 10:00 am Tuesday, April 20, 2021. Pre-bidding will begin 8:00 am Monday, April 19, 2021 at GovEase.com – Any unsold liens will be subject to a private lien sale occurring after the online auction has completed.
Which properties are included in the tax lien auction?
Properties for which the delinquent taxes have not been paid within the provided time period will be included in the tax lien auction. A list of available properties will be made available by the Tax Collector’s office no later than March 30.
The list will include the following information: owner names, receipt number and parcel number, property description, county appraised value, tax district, delinquent taxes plus interest, penalties, fees, and costs calculated as of the date of the auction for each assessment. Please be aware that some property owners may pay their delinquent taxes between the time the list is published and the tax lien auction is held, in which case any such properties will not be included in the tax lien auction.
Are those property owners whose parcels are subject to auction notified about the tax lien auction?
Yes, at least 30 days before the auction, the Tuscaloosa County Tax Collectors office mails notice of the auction to each delinquent taxpayer and advertises the auction on its official website.
When and where will the tax lien auction be advertised?
March 19, 2021
Where can I find additional information about properties subject to the tax lien auction?
You can find additional information using the Tuscaloosa County property tax website or the mapping website. Please note that it is your . responsibility to independently research any property in which you are interested to determine property value and whether there are any liens, encumbrances, title defects, etc.
When will I be able to register for the tax lien auction?
Bidder registration will be available 2 – 3 weeks prior to the tax lien auction. You may register as a bidder by going to www.govease.com. During the registration process, participants are encouraged to thoroughly review the instructions regarding setting up payment, frequently asked questions (FAQs), rules, and the provided online training videos.
Contact the Tax Collectors office at (205) 464-8230 with any other questions related to registration or training.
What are the payment requirements for the tax lien auction?
Cash, cashier’s check, money order, or ACH. A successful bidder must remit full and final payment of funds to the Tax Collector’s office no later than one hour before close of business on the day of the tax lien auction.
NOTE: Payment information must be arranged with the Tuscaloosa County Tax Collector’s office prior to you becoming an accepted bidder.
What software or equipment do I need to be able to participate?
To participate in the online tax lien auction, a bidder must have a computer with internet access and a web browser (recommended: Internet Explorer 8.0 or higher, Firefox, Safari, or Chrome).
Do you allow investors to invest in tax lien certificates via mail, telephone, or fax?
No. All accepted bidders must participate in the online tax lien auction at GovEase.com. Accepted bidders may participate in a pre-bid process that begins online Monday, April 19, 2021. GovEase has training information regarding the pre-bidding process.
What is the bidding process?
A tax lien shall be sold at auction. A lien includes taxes, interest, penalties, fees, and costs due on the property as of the date of the auction. Bidding is not based on the amount of money the buyer of a tax lien is willing to pay. The amount required to purchase the tax lien is already set. Bids are based on the amount of interest the buyer is willing to accept as full payment on the lien. The lien is sold to the bidder who bids the lowest interest rate on the amount required to be paid to redeem the property from the auction. The beginning interest rate bid shall not exceed a rate of 12%. Additional bids may be made at a rate less than the immediately preceding bid. The bids will be in 1% increments until no bidder continues to bid lower or until the interest rate reaches 0%. Example: If the current bid is 12%, the next acceptable bid will be 11% or lower until bidding stops or reaches 0%.
Pre-bidding will be available (Monday, April 19, 2021). Pre-bidding allows bidders the convenience of reviewing properties and selecting the minimum interest rate they are willing to accept on a property at live auction.
During the auction, what will happen if more than one bidder submits an interest rate of 0%?
If the interest rate bid for the property reaches 0% and more than one bidder remains, the winning bid shall be determined by a random number generator.
How much time do I have to bid on each tax lien that is put up for auction?
Each tax lien offered for auction will be open for bidding for 30 seconds. However, if a bid is placed in the last 10 seconds, the clock will automatically be reset for an additional 10 seconds, to allow other interested bidders the opportunity to submit further bids.
What type of document is issued after the tax lien auction?
After the tax lien auction is over, bidders will receive a bid report with a list of parcel numbers and the corresponding amounts due. After payment is received, a tax lien certificate will be prepared and mailed to the purchaser within 10 business days of the close of the tax lien auction. The certificate will include the auction date, lien holder, the assessment year to which the tax lien relates, the amount of all taxes, penalties, interest, fees, and costs due on the property as of the date of the auction, and the interest rate per annum bid on the parcel.
What happens to any other encumbrances on the property when I purchase a tax lien?
The sale of a tax lien does not extinguish any deed restriction, deed covenant, easement on or appurtenant to the parcel. A tax lien purchased from the County has higher priority (40-1-3 Code of Alabama) than other existing liens on the property.
What is the foreclosure process and will the county handle the foreclosure process for a fee?
The foreclosure process is handled through the court system. The county is not involved.
How will the property owner find out who purchased a tax lien on the property?
Within 10 days after the tax lien auction closes, the Tax Collector will send notice by first class mail to the owner at the address listed in the property assessment, informing that the tax lien has been auctioned. The notice will include the date of the auction and the name and address of the tax lien purchaser.
Are there any other expenses related to the auction, in addition to the costs of the lien?
The costs of the lien will include all the costs associated with the auction process including a $20 origination fee, a $20 auction fee, and a $5 tax lien certificate fee. For a total of $45.00.
If I am awarded the tax lien, will I be required to pay subsequent taxes each year?
No, this is entirely optional. The holder of a tax lien certificate has the first right to purchase the tax lien for the subsequent year’s delinquent taxes on the property described in the certificate. A holder who exercises this right is entitled to the same interest rate shown on the previous tax lien certificate.
May I transfer or sell my tax lien certificate to someone else?
Yes, a tax lien certificate may be transferred and assigned to another party. Please refer to Alabama Code § 40-10-187(e) for additional information on transferring tax lien certificates.
Is ownership in the property transferred to the purchaser of the tax lien?
No, as a tax lien purchaser, you are not acquiring any right, title or interest in the property. You are only purchasing a lien against the property based on delinquent taxes. If a tax lien that was purchased pursuant to this article is not redeemed and the holder of the tax lien certificate fails to commence a tax lien foreclosure action on or before 10 years from the date of the tax lien certificate the tax lien certificate shall expire and the lien shall become void.
If I own property for which a tax lien was auctioned in a prior year, can I pay my current taxes without paying the holder of the previous year's tax lien?
No, a property owner must redeem all outstanding tax liens on the property before paying the current year taxes due.
How do you redeem a tax lien that has been sold at auction?
Tax lien redemption must be made through the Tuscaloosa County Tax Collector’s office. Redemptions can be made any time following the close of the auction, before judgment of foreclosure is entered. Redemption payments must be made in certified funds (cash, cashier’s check, money order). To redeem, one must pay the amount of the debt as specified in the tax lien certificate, the interest due to the purchaser of the tax lien at the rate specified in the tax lien certificate, and a $10 redemption fee.
The following may redeem tax liens: (1) The owner, including a partial owner of less than whole of the real property, or heirs or personal representative; (2) Any mortgagee or purchaser of the property or any portion of the property; or (3) Any person listed under Alabama Code § 40-10-120(a), if the property has been sold for taxes.
Please note, if a tax lien that was purchased pursuant to this article is not redeemed and the holder of the tax lien certificate fails to commence a tax lien foreclosure action on or before 10 years from the date of the tax lien certificate the tax lien certificate shall expire and the lien shall become void.
What will be issued by the Tax Collector's office to prove that a tax lien has been redeemed?
Once an application to redeem the tax lien has been made by a person who has the right to redeem, and payment for the amount due has been received, the Tax Collector’s office will issue to the redeeming individual a certificate of redemption appended to a copy of the certificate of tax lien, stating the date of redemption, amount paid, and by whom redeemed. The Tax Collector’s office will make entries in the record of tax lien auctions of the above, and mail a copy of the redemption certificate to the holder of the tax lien certificate.
What happens to the liens that are not sold at the tax lien auction? Can they be purchased over-the-counter directly from the county?
Tax liens that are not sold at auction are held by Tuscaloosa County. Remaining liens can be purchased over-the-counter at the Tax Collector’s office for no less than all taxes, interest, penalties, costs, and fees; the interest rate may not exceed 12%. Any tax liens remaining unsold after the auction or sale shall be included in future tax lien auctions or sales until they are sold.
Please contact our office at (205) 464-8230 for more information about unsold tax liens.
May I receive a list of tax lien certificates through e-mail?
We will be happy to email a list to you, there is no fee associated. Please call our office at (205) 464-8230 to provide us with your email address.
Can I get a list of tax lien certificates available and place me on your mailing list. Is there a charge for the list ?
A hard copy of the list is $50. It must be paid for in advance by cashier’s check or money order before we will mail it out. The list includes a parcel number, the owner’s name, address, and the approximate amount of tax due on the property.
Does a tax lien that is purchased at auction ever expire?
Pursuant to Alabama Code § 40-10-197, if a tax lien purchased at auction is not redeemed and the holder of the tax lien certificate does not bring a foreclosure action within 10 years from the date of the certificate, the tax lien certificate expires and the lien becomes void.
Could I please get a copy of the statutes regarding tax lien auctions in your state?
If you need further information, the Code of Alabama Title 40, Article 7, 40-10-180 through 40-10-200 or Act 2018-577 can be found at https://www.sos.alabama.gov/government-records/legislative-acts.
When & how do I as an investor purchase the subsequent tax lien to maintain my interest in the parcel? What interest rate will my repurchase have?
Subsequent tax liens may be repurchased the day of the tax lien auction two hours prior to the start of the tax lien auction or sale. The interest rate will be the same as the rate of the original tax lien purchase.