TAX DEED QUIET TITLE GUIDE - rplaw.mcatradewinds.comrplaw.mcatradewinds.com/.../01/QUIET-TITLE-GUIDE.pdf · title and that a quiet title search will turn up. Once these issues have

TAX DEED QUIET

TITLE GUIDE

BY: ROBERT L. PETERS, ATTORNEY

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TABLE OF CONTENTS

Quiet Title Introduction .................................................................. 2

Robert Peters Introduction ............................................................. 3

What is a Quiet Title ....................................................................... 4

Who Needs a Quiet Title………………………………………………………………6

How Does the Quiet Title Process Work……..……………………………….7

Quiet Title FAQ…..……………………………………………………………………. 10

Tax Deed Sales FAQ’s and Information…………….………………………..13

Requirements for Tax Deed Sales Notices and

Insurance……………………………………………………………………..……………16

A Notice of Caution on Tax Deed Certificates………..…………………..19

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QUIET TITLE INTRODUCTION

Congratulations! Whether you are a newbie or a seasoned investor, you’ve come to the right

place! One of the smartest and little known ways to invest in real estate is by purchasing tax

deeds. While the nation has struggled for the last few years with a real estate market that at times

felt it was dropping through the basement, intrepid real estate investors have been quietly buying

up properties whose taxes have gone unpaid.

Often these real estate investors are simply ordinary people, like you or me that have learned

about tax deeds and decided to take advantage of the situation to get into real estate investment. I

am assuming that if you are reading this booklet you are one of the many who are now investing in

tax deeds. So, if you have been buying these tax deeds, why do you need a quiet title action on that

property?

Well that is a good question and one we will explore further in this book. We will take a look at

what a quiet title search is, who needs one and what it takes to get one done. We have a list of the

most frequently asked questions about quiet title actions and also about tax deed sales since they

are inexorably linked together. Together we will explore the world of tax liens, tax deed properties

and quiet title searches.

This booklet is by no means an exhaustive overview of the topic; it is really just an introduction. For

those of you who are already hip-deep into the real estate investment process it might even be a

bit of a refresher course.

While this book does offer detailed, insightful information about real estate and investment matters, it is not to be considered as legal

advice, nor does it establish a client-attorney relationship between us. Instead, consider this book to be a provider of helpful “for your

information” knowledge presented to give you a better understanding of what the quiet title and tax deed process entails and if it is the

right choice for you.

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Robert Peters Introduction

My name is Robert Peters, and I am an attorney. I’ve been practicing law since 1993. Prior to starting Florida State University as an undergrad, I was in the United States Air Force where I got to see the world and serve my country. I majored in accounting and real estate at Florida State University and earned a bachelor’s degree in 1987. I worked for Price Waterhouse as a CPA until law school in 1990. I graduated from Florida State University College of Law with high honors. My law practice focuses on both Residential and Commercial Real Estate, Bankruptcy, Foreclosure Defense and Credit Repair. I find this work interesting and challenging because it requires knowledge and integration of several different areas of law including real estate, creditor rights, bankruptcy law, tax law, estate planning and understanding of human nature. I feel a sense of accomplishment whenever I help my clients through a difficult financial period in their lives. I provide most legal services on a fixed-fee basis so clients know their legal cost in advance. I have handled thousands of real estate closings over the past decade and I specialize in tax deeds and quiet title actions. I am also an affiliate member of the Association of Realtors, the Florida Land Title Association, Jacksonville Real Estate Investors Association, National Association of Consumer Bankruptcy Attorneys and the National Bankruptcy Institute. In other words, I know what I am doing! To maintain

my expertise, I continue to educate myself, staying on top of the latest trends and

developments so that I can provide unparalleled service to my clients.

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WHAT IS A QUIET TITLE?

The easiest way to understand a quiet title action is to see that basically it is a lawsuit, brought

against anyone who may be able to claim title to the property you have. More than likely you have

bought that property through a tax deed sale and want to clarify who has rights to it. There might

be some question about ownership or prior claims on the property. If there is, a quiet title will

bring these out into the open.

It might seem strange to have to file a quiet title action on a piece of property you recently

purchased, but real estate has its own habits. One of them is that ownership can change hands

frequently, unlike with say a car. So when you buy a property, particularly one that for some reason

has not had the taxes paid on it, there could be issues. A quiet title is the way to discover this.

You may have heard of a quiet title being called a suit to remove cloud on a title. A cloud is when

there is a claim on a property that might bring into question any new owner being able to claim

ownership of the property. It could be as simple a thing as money owing on the last roofing job or

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as complex as multiple family members inheriting a home and none stepping up to the plate to

clarify who is taking possession of it from the will. These are the things that create a cloud on the

title and that a quiet title search will turn up.

Once these issues have been brought to the attention of the court where the quiet title action was

filed, any claims to the title can be clarified and your ownership of the title confirmed. This is an

important step because you cannot get title insurance without this clarification. If you are

interested in selling the property, and most investors are, then you will need this quiet title to

ensure that your sale will go through smoothly.

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Who Needs A Quiet Title?

While not everyone who buys property needs quiet title, there are circumstances where doing a

quiet title action might be the best approach. Because the laws regarding quiet title change from

state to state, if you have bought a tax deed property in Florida you will need to file a Florida quiet

title action to give you clear title to the property.

Quiet Title and Tax Deed Sales

Just having successfully bid on a property at a tax deed sale may get you the deed to the property,

but until you clean up any liens or encumbrances on the title you will not be able to claim clear title

to it or to sell it. You have probably bought that tax deed property as an investment, and so you

want to be able to sell it without running into any problems. This is when a Florida quiet title comes

into the picture.

There is no way to actually know if there is any kind of a lien or prior claim to the property until you

have done a quiet title. Sometimes it can be obvious that there is another person claiming rights

and so you will need to file a quiet title to “quiet” their claim. The courts will make that decision

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and having a quiet title attorney to handle your claim is going to make it easier to state your case

with the judge.

So you may be thinking you can do this on your own. Unfortunately the law has gotten much more

complicated in the last fifty years and so has property law. Following the trail of the tax deed is just

the first step for a quiet title. Unless you are a real estate specialist who also has a law degree and

understands tax law, you are going to need some help getting this title through the courts and

cleared up so you can make your sale.

Quiet Title and Inheritance

Sometimes a quiet title action is needed to clear up title when the owner dies and the succession is

not clear. Perhaps there is more than one will, or there is someone who thinks they are entitled to

the property. Often it will be unclear, even if there is a will, who the owner wanted the property to

go to when they died.

These are the kinds of situations where doing a quiet title search and action will eliminate the

doubts and either allows someone to take over the property or the heirs to sell it. Whichever

situation is wanted, you will need to do a quiet title first to establish who is even legally allowed to

make these decisions.

Quiet Title and Title Insurance

Also- if you have a property that you want to sell, you will need to produce title insurance for it. To

do this, you will be required to produce proof of your entitlement to this property through a quiet

title search. Since this kind of action can take as much as several months, depending on what kind

of complexities show up, getting the quiet title completed before you put a piece of property up for

sale would be a smart move. It would be rare to find a buyer who was willing to wait while you

cleared up your claim to title on the property, so getting it done when you know you will want to

sell soon is a smart move.

So in the end you might say that anyone who has recently bought property in Florida through a tax

deed or other type of property auction, or is looking to sell a piece of Florida property where a

quiet title has not been done needs to do a Florida quiet title action.

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HOW DOES THE QUIET TITLE

PROCESS WORK?

While the concept of doing a quiet title action is pretty simple, doing it is not. Since the purpose of

doing your quiet title search is to discover if anyone else has prior claim to the property through

either a claim they filed against or even perhaps a lawsuit, you would think a simple search would

be easy. But nothing is ever simple when it comes to either law or real estate. So you can imagine

how easy it would be for something that involves both to get complicated quickly.

Every Case is Different

The first step is to simply come in a talk to us. In the same way that every piece of land has its own

unique characteristics, every quiet title case is a bit different from every other one. The first thing

we will need to do is find out everything we can about your particular case to see if a quiet title is

needed. The more you know about this property the better, and with the years of experience our

office has with quiet title cases, we will know what questions to ask.

The Paperwork

Once we have established that you will need to file a quiet title action, you will need to bring in

your paperwork on the property. This will be a copy of the Deed as well as the Certificate from the

Office of the County Clerk. This should all be in your records of the sale. If possible, bring you whole

packet to the office, so that all pertinent information is obtained for the search.

Once those have been entered we will do our research to ascertain if anyone else has legal claim to

the property. That information will then be reviewed together so a strategy can be decided on,

based on our experience of this type of case and our knowledge of the courts.

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Your Case Before the Courts

This is where you will be glad you hired an experienced Florida Quiet Title attorney. For the next

few months the case will be evaluated by the courts. We will present our research and our

arguments on why your claim has the most validity and should be honored above all other claims.

We will have familiarized ourselves with whatever other claimants have shown up on our search

and will show the courts that your claim is the only one that is truly valid.

Sometimes a judge will request the client to appear in court, but this is actually not a common

occurrence. Most likely the entire case can be argued and won without you having to step inside a

court at all. Generally you will need to sign an Affidavit that will be presented in court, but that is

pretty much the extent to which you can expect to be asked to participate in the case once it has

progressed to this stage. Once your claim has been recognized as the sole valid claim, the title will

be yours and held to be without cloud. This means that the title is yours free and clear.

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QUIET TITLE FAQ

What is a Quiet Title Action?

A Quiet Title Action is a lawsuit brought to the courts to establish title and eliminate any future

claims of title on the property. These conflicting titles are often called “clouds” on the title because

they cloud the clear title ownership. It is most often used when a property has been bought as a tax

deed. This is because a tax deed ownership, when you pay the back taxes owed to the county and

take over the deed, is the least defendable form of ownership.

This is why a quiet title needs to be done when a property is bought in this way. The person who

owes the tax or even the mortgage company could claim they never received notice that taxes

were owed and fight the quiet title action. Sometimes an owner dies and the heirs do not realize

they need to pay taxes. For these kinds of tax deeds a quiet title is an important tool to lay your

claim to the property.

How Does Quiet Title Work?

It begins when a title report is run that will show anyone who has a legal interest in the property.

These people will all have notice served, plus whoever the current owner is plus anyone who is a

tenant in the property if it has one. While these notices are being served, the lawsuit is filed in

court. If no one responds to the notices, the judge will decide in your favor by default.

That is the quick case! If anyone decides to contest your quiet title, and it does happen sometimes,

then we will need to argue in court on your behalf. How quickly this all happens depends on how

backed up the courts are and how complicated the case becomes. Usually there are no contests

against the quiet title and the whole thing can be wrapped up in 2-4 months.

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Will a Quiet Title Take Care of All Liens and Problems?

While the quiet title will turn up liens and such, any outstanding municipal fines or government

liens will still need to be addressed. If the quiet title was done on a tax deed, then most back taxes

are not a problem but there can be other outstanding government liens. Also, a quiet title can be

overturned, but this happens rarely.

How Long Does it Take to Do a Quiet Title?

Generally you can count on it taking anywhere from 3-6 months for the case to go through the

courts once the search has been done. It could be as quick as two months if the number of

claimants is small. It really depends on the complexity of the case, if someone is contesting the

quiet title and sometimes if the owner died without a will it can get very complicated.

What if There is a Mortgage on the Property?

The county clerk’s office has to notify the lender, based on the information they have that has been

provided by the Tax Collector’s Office. Lenders, like all other parties, have 20 days from when the

notice is sent to respond. This is to give them a chance to protect their interests in the property. It

is unusual for a lender to respond, but if they do they will simply pay the taxes owed. But they

don’t generally respond and when that happens the lien they have is eliminated on the Tax Deed.

Will I Need to Go to Court?

The short answer is, probably not. While it is rare for a judge to require the person initiating the

quiet title to the courts, it is not impossible. Usually the affidavit you signed will be sufficient.

Can I Sell My Tax Deed Property Without a Quiet Title?

If someone was willing to pay cash you probably could. But if there is any kind of financing being

done on the property, the company providing the financing will require title insurance. To get title

insurance you have to produce a quiet title that clarifies the ownership of the title. This is because

without the quiet title someone could come along and claim ownership on the property and then

the lender would not have any collateral against their loan. So basically, it will be hard to sell any

tax deed property without a quiet title being done first.

Can Issues Arise in Regards to a Quiet Title for a Tax Deed Property?

Yes, and it really comes down to how diligently the clerk’s office attempted to notify the owner

who owes the taxes that a tax deed sale was about to take place if they didn’t do something. If the

notice was mailed and came back as undeliverable, the U.S. Supreme Court has ruled that the clerk

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must then take extras steps to try and track that person down either through tax records or some

other legal records.

They must prove they have taken “reasonable steps” to find them before they put the property up

for sale as a tax deed property. If they have not, then you may find when you file a quiet title that

the owner will move to regain their property. It is a calculated risk everyone takes when they bid

on tax deed properties.

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TAX DEED

SALES – FAQS AND

INFORMATION

Because tax deed sales are such an integral part of

the Quiet Title process, it is important to also understand the basics for a tax deed sale. These are

just a few of the questions that often come up when discussing tax deeds.

Can Anyone Buy a Tax Certificate?

There are no restrictions to the purchasing of a tax deed certificate. The only requirement is that

you have the cash on hand to make the purchase when you bid.

Will I Be Kicking Someone Out Of Their Home When I Buy A Tax Deed?

No, you will not. Since you are not actually buying the property but only the paying their back taxes

that they owe on the property, you are not taking possession of it in any way.

Will I own the property at some future date?

It is not very likely that you will actually own the property as most property owners in Florida do

tend to pay their back taxes that they owe.

I know that tax deeds happen when people don’t pay their taxes – why would anyone choose to

not pay their taxes on their property?

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There are probably many reasons why from poor health to the impact of the current economic

climate.

What happens if the property owner to the property I have the tax deed for dies?

When this happens frequently the heirs or family members will often step forward and pay the

taxes. But they could also not do so. When this happens, a tax deed is issued and then a quiet title

does become necessary to establish title.

Is there a restriction on the number of tax lien certificates I can acquire?

No, there is no limit on the number of tax lien certificates anyone can have in the State of Florida. It

is only limited by how many you can afford to pay for.

When I buy a tax deed, who do I pay for it?

You pay the county.

Who pays me the interest on the tax deed?

The property owner will pay you the interest on the tax owed when they redeem or pay for their

delinquent taxes.

Can I contact the home owners of the tax deed?

No, you cannot contact them at any time. In fact, the Clerk of Court can bar you from any further

certificate purchases if you do contact the owner.

When do I get my money?

You get paid when the County collects from the property owner. They will notify you when that

happens.

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How will I know what property I am buying?

The important thing to understand is that you are not buying real estate with a tax deed. You are

purchasing a lien on the real estate. If the owners do not in fact pay their taxes then you would at

that time foreclose on the property and get the property. At that point you would then own the

real estate.

Is a tax deed certificate transferable?

Yes, you can assign or transfer it at any time that you want.

Are all the properties with a tax deed improved?

No they are not always improved. The properties can be vacant land, an improved residential

property or even commercial property.

Is there a way to know when you buy the certificate when it will be redeemed by the owner?

No, there is no way to know.

Is it possible to buy before the auction or sale?

There are some counties where the unbid or leftover certificates from the previous year’s sales are

made available before the auction sale.

Can I lose money buying tax lien certificates?

Anytime you make an investment it is always possible to lose money on that investment, and that

includes investing in tax lien certificates or tax deeds. Even a certificate of deposit has a risk. That

being said, tax lien certificates are considered quite safe for an investment.

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REQUIREMENT

S FOR TAX DEED SALES –

NOTICES AND INSURANCE

Notice Requirements The tax collector will provide the clerk of the circuit court with a list of who needs to be notified of

the sale. This list includes:

The legal titleholder whose address appears on the last assessment roll along with any legal

titleholder whose address appears on a record conveyance if the property has been

transferred since the last assessment

Any record mortgagee

Any vendee under a recorded contract for deed or any vendee who has applied to receive

notice

Any record lienholder or lienholder who has applied to receive notice

Any record lienholder with a lien on a mobile home located on the taxed parcel.

The clerk is required to mail notice to each of the above listed persons by certified mail at least 20

days prior to the date of the sale. If these requirements are not met the tax deed may be invalid.

The clerk should prepare an affidavit listing the names, addresses and the date on which each

person was notified by mail.

In addition the sheriff will serve notice to the property owner and if they do not reside in the

county a notice will be posted in a conspicuous place on the property. Also, the clerk will publish

notice of the sale once a week for four consecutive weeks prior to the sale.

The Florida Supreme Court has ruled that compliance with the notice requirements where the tax

collector and clerk knew or should have known that the address on the tax roll was incorrect does

not invalidate the notification.

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Minimum Acceptable Bids The mandatory minimum acceptable bids for tax deeds are based on whether the certificate is held

by the county and if the property is the taxpayer’s homestead.

County held non-homestead properties – The opening bid must include all outstanding certificates,

additional taxes due, interest and all costs and fees paid by the county.

Individually held non-homestead properties – The opening bid must include all money paid to the

tax collector by the certificate holder at the time of application, the amount required to redeem

the tax deed applicant’s tax certificate and all costs and fees paid by the applicant.

Homestead properties – The opening bid must include the minimum opening bid on non-

homestead property, plus at the minimum one-half of the latest tax value of the property.

Payment of Bids The full payment of the highest bid must be received by the clerk within 24 hours after the

advertised time of the sale. If the payment is not received within that time period the clerk will

cancel the sale and again advertise the sale within 30 days of the cancellation.

If there are no acceptable bids, the land is placed on the list of “lands available for taxes.” The

county then has 90 days after the date of sale to buy the property for opening bid. After that date

any party may purchase the property for an amount equal to the opening bid.

Requirements for Tax Insurance Because the history of tax deeds often makes their claims invalid, getting tax insurance on a tax

deed can take careful work. You will find that most tax insurance agents are very scrupulous about

following all of the requirements for issuing a tax certificate and tax deed. The requirements are:

There has been a tax deed of record for more than 20 years

During that period of time the taxes have been paid by the tax deed grantee or their

successors

There has been no adverse claim of record asserted and no possession adverse to the tax

deed grantee subsequent to the tax deed

The taxes that have caused this tax deed to be issued have not been paid before the

execution and issuance of the tax deed.

There are situations where the insurance of a tax deed will be allowed after four years of issuance.

A former titleholder or any adverse claimant can be prevented from bringing action against a tax

deed holder when they have had continuous adverse possession of the real property for four years

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after the tax deed was issued. There must be a record of evidence substantial enough to establish

this continuous adverse possession by the tax deed grantee.

In addition, there cannot be any action by a former owner or other claimant after the four years

have passed provided the taxpayer or anyone claiming has not been in actual possession of the

property for one year after the tax deed was issued.

Once this statute of limitations has expired a quiet title can be performed. This quiet title action

will include the following defendants:

The taxpayer

All lienholders

Any other parties who have interests in the property and whose interest is capable of being

extinguished by the issuance of the tax deed

When the quiet title action has been successfully completed and where all required parties were

named and served, title can then be insured by the tax deed holder. Title can then be issued once

the taxpayer obtains and records the deed.

The exceptions to this are that a tax title cannot be insured when the tax deed grantee is a former

co-owner because in that circumstance the tax deed insures to the benefit of the other co-owners.

The other exception is when a tax deed grantee held an interest in the real property.

What Is Not Eliminated By a Tax Deed There are certain interests that survive a tax deed being issued. These include easements for:

Drainage

Utilities

Other public services

Any ingress or egress recorded or visibly occupied prior to the tax deed being issued

Common-law and statutory ways of necessity

State, municipal and county government liens

Also any rights that are severed from the surface rights such as oil, gas and mineral rights are not

eliminated by the tax deed. While federal tax liens that have been recorded must be exempted, if

the federal government received proper notice of tax deed proceedings they have a right of

redemption for 120 days.

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A NOTE OF CAUTION ON TAX DEED CERTIFICATES (BUYER BEWARE)

There have been a couple of legal actions lately that may have affected how tax deed owners are

seen by the law when it comes to the question of purchasing tax certificates and tax deeds. The

article below by a noted Florida attorney is a good example of the kind of reconsideration that is

happening around the question of tax certificates and tax deeds.

All of this touches on the end result when you do a Quiet Title Search since so many of them are

done in connection with a tax certificate or tax deed. Another case recently also brought up the

question of how much notice is required to current property owners who are delinquent in the

property taxes prior to a move by the state for the sale of a tax certificate on the property. We now

know that the clerk must show that every reasonable effort has been made to locate the current

property owners if the certified letter comes back undelivered.

This probably reflects the growing interest in tax deeds and quiet title actions more than anything

else. Still, being informed is always a good idea. Read the article below to get a clearer view of how

federal tax liens could affect your next tax certificate purchase.

Tax Certificates – Buyer Beware!

By Hunter G. Norton, Esq., Abel Band, Chartered, Sarasota FL

Although Florida Statute §197.102(3)n and supporting case law proclaim that a tax certificate

constitutes a first lien on real property, “superior to all other liens,” the purchaser of a tax

certificate should look before he leaps. While such authority may beguile even the prudent

investor, lying silent in the public records are federal liens which will prime a tax certificate, despite

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the bold assurances of Florida law. Therefore, it is imperative that the purchaser of a tax certificate

first determine whether a federal lien exists on the assessed real property, and second, whether

the tax certificate was perfected prior to the federal lien.

The Tax Certificate Florida county governments routinely sell tax certificates to alleviate their books, bolster their

coffers and shift the burden onto John Q. Public, who may bid on and purchase the county’s tax

lien at a tax lien sale. Tax lien sales are creatures of statute and are set in motion by the assessment

of taxes by the county tax collector. Real property taxes become due on November 1st of the year

the taxes were assessed. County governments are given tax liens, “superior to all other liens,” on

the taxed real property from January 1st of the year the taxes were levied via a “relation back

concept.” If the taxes on the real property are not paid by the following April 1st, or within 60 days

from the mailing of the original tax notice (whichever is later) the taxes are deemed delinquent.

Once delinquent, the tax collector is compelled to sell a tax certificate at a tax lien sale.

The Tax Lien Sale In contrast to a sale on the courthouse steps where the property goes to the highest bidder,

potential buyers at a tax lien sale bid the interest rate down. Typically the bidding starts at eighteen

percent, the highest allowable interest rate, decreasing gradually as potential purchasers bid

against one another. The party who agrees to purchase the tax lien at the lowest accruing interest

rate is issued a tax certificate evidencing a “superior line” on the real property, which the property

owner can redeem only by paying the principal, costs and interest to the tax certificate holder

within two years of issuance.

If the tax certificate is not redeemed within two years of April 1st of the year it was issued, the

holder may file the certificate and apply for a tax deed from the tax collector on the county in

which the real property is located. The prospect of guaranteed interest on the one hand and the

issuance of a tax deed on the other, make a tax certificate a very attractive investment. The allure

of the tax certificate is buoyed by the assurance that it is a “first lien, superior to all other liens.”

However, the purchaser of a tax certificate, as well as the purchaser’s attorney, should be well

aware that this attractive investment may morph into an unattractive nuisance if a proper

investigation is not undertaken.

A Federal Lien May Prime a Tax Certificate Many a first year law student can recite the age old adage: federal law pre-empts state law when

state and federal law conflict. Federal law mandates that federal liens may prime any other lien

existing on real property, including a state-issued tax certificate. Federal liens include, but are

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certainly not limited to, FHA mortgage loans and federal judgment liens. For the purchaser of a tax

certificate, the devil may lie in the details of the federal lien.

For example, 28 U.S.C. §3201 provides that a federal judgement lien is superior to any other lien

which is perfected later in time. Thus, if a federal judgement lien is recorded against real property

to perfection of a state tax lien, the federal judgment lien will trump the state lien notwithstanding

Florida’s statutory guarantee that a tax lien is superior to all other liens. Therefore it is of

paramount importance that the purchaser of a tax certificate determines whether a federal lien of

any type exists on the assessed real property.

Using a federal judgement lien as an example, let’s assume an investor properly reviews the public

records and discovers a federal judgment lien on real property for which a tax certificate is to be

sold. At first blush, the existence of a federal judgment lien appears fatal to the investor’s state tax

lien position. However, all hope is not lost. If the state tax line was perfected prior to the federal

judgment lien, the investor can purchase the tax certificate and reign “superior” as proclaimed by

Florida law. Though it sounds deceivingly simple, until recently there was no Florida case law

expressly on point regarding perfection of state tax liens.

United States v. Falcone, et al. While the Florida Statutes clearly provide that a tax lien is effective as of January 1st of the year the

taxes were assessed, the issue of when a tax certificate is perfected has not been so apparent.

Recently, the United States District Court for the Middle District of Florida clarified the issue in

United States v, Falcone, et al. The issue in Falcone was whether a federal judgment lien recorded

prior to the issuance of a tax certificate, but after January 1st of the year the taxes were assessed,

could prime the tax certificate. The Court expressly concluded, for the first time, that state tax

certificates, like the tax liens they represent, take effect on January 1st of the year the taxes were

assessed.

The Middle District’s ruling in Falcone is couched upon the notion that a tax certificate itself

represents the assignment of a state tax lien rather than a separate, defeasible lien. The Falcone

Court determined that a tax certificate is indeed a perfected and choate lien on real property as of

January 1st of the assessing year notwithstanding that a tax certificate cannot be issued until April

1st of the subsequent year. In reaching its conclusion, the Middle District relied heavily on the Fifth

Circuit Court of Appeal opinion in U.S. v. Atlantic Mun. Corp., 212 F.2d 709.711 (5th Cir. 1954),

where the Eleventh Circuit’s predecessor court held that a “lien based on a state tax certificate

purchased in 1950 for delinquent 1949 taxes was a perfected and choate lien that pre-dated the

United States tax lien, which was perfected May 31, 1949.” On this rationale the Falcone court

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explicitly determined that a tax certificate is a perfected and choate lien on the subject real

property effective January 1st of the year in which the taxes were levied.

Conclusion

For the purchaser of a tax certificate who discovers a federal judgment lien on real property,

the critical determination will be whether the federal judgment lien was perfected prior to

January 1st of the assessing year. If it was, then the federal judgment lien primes the tax

certificate notwithstanding Florida’s statutory assurance that a tax certificate is a “first lien,

superior to all other liens.” Relative to a federal lien, the tax certificate may very well be a

junior lien readily extinguished by the superior lienholder’s interest. Therefore, it behooves

the tax certificate purchaser (and most certainly his or her counsel) to tread cautiously,

minding the Latin admonition, “Caveat Emptor!”

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EXPECT THE EXCEPTIONAL

ROBERT PETERS – AT YOUR SERVICE!

As a real estate investor and an attorney specializing in Real Estate and Quiet Title Actions, I have

worked with many clients over the years. My goal is to achieve success; success that is measured

by helping my clients and fellow real estate investors acquire the best possible outcome on their

tax deed purchases.

My years of expertise enables me to get you through the Quiet Title process in a quick and cost

effective manner. My hope is that by having ready my book, you are more educated about Tax

Deeds and Quiet Title Actions in Florida and have obtained confidence in determining whether or

not a Quiet Title Action is the right choice for you.

If indeed you choose to pursue a Quiet Title Action, I would appreciate the opportunity to provide

you with a complimentary consult. Please visit my website, http://WWW.FLAQUIETTITLE.COM or

give me a call at 904-421-6907 so that we may schedule your consultation.

Here are the guarantees used by my firm, so you can see if other lawyers are willing to put their

money where their mouth is:

Guaranteed Level of Service

I guarantee you will always receive the highest level of personal care and attention from my law

firm. No one likes to be thought of as a case number. Every person in my office is here for one

purpose: to serve you and to get the best possible result in your case. If you do not receive the

close personal care and attention you want, nothing else matters. I will treat each client the way I

would want to be treated if I were the client and not the lawyer. When you are a client of my law

firm, you become part of our family, and we guarantee you will receive the best we can offer.