As involving real property, if one fails to pay their property taxes by March 31st, a tax certificate will be issued by the County Tax Collector. Tax certificates are auctioned off in an “interest rate bid down” procedure. The tax certificate will be awarded to the person/entity willing to pay the property taxes and accept the lowest interest rate return on the to be issued tax certificate, sometimes euphemistically referred to as a “tax lien”. The recipient of the tax certificate can then file a “tax deed application” two years after the issuance of the tax certificate, but no greater than seven years thereafter. Upon making a tax deed application, a tax deed sale is scheduled, like a mortgage foreclosure sale, where the high bidder receives an administrative tax deed for the property. When the property is encumbered by a mortgage, typically the mortgage holder, i.e., Bank will ensure the property taxes are paid prior to the property being scheduled for a tax deed sale in order to preserve their collateral. However, in certain instances, intentionally or unintentionally, mortgage holders will fail to pay the property taxes. If a tax deed sale occurs, any existing mortgages on the property are extinguished as are all amounts due a homeowners or condominium association up to the time of the issuance of the administrative “tax deed”. The party receiving the tax deed typically needs to file a “quiet title action” naming all parties who may have had an interest in the property in order to make title to the property marketable, i.e., sellable, from a title insurance perspective. Tax Certificates and tax deeds are serious business with large institutional investors purchasing tax certificates in some cases acquiring tax delinquent properties for steep discounts at tax deed sales. The tax deed sales process also have major implications on homeowners and condominium associations carrying account balances on the subject property/unit as well.
About SJW Law Group, PLLC
SJW Law Group, PLLC was formed in 2018 headed by Scott J. Wortman, Esq. who has been practicing law for twenty-five (25) years. Scott J. Wortman, Esq. is a Florida Bar Board Certified Real Estate Attorney and a Florida Bar Board Certified Condominium and Planned Development Law Attorney. Throughout the entirety of his career, Mr. Wortman has handled all aspects of residential and commercial real estate transactions including contract drafting, review and examination of title work, curing title defects, extensive interaction with buyers, sellers, real estate agents, mortgage brokers and lenders for coordination of all closing matters. For the past dozen years, Mr. Wortman has maintained an extensive community association practice serving as counsel for dozens of homeowner’s association and condominium associations throughout the state of Florida overseeing their governance issues, covenant enforcement, collection matters, litigation and compliance with Florida’s Marketable Record Title Act. Since 1994 Mr. Wortman has represented small and mid-size businesses with regard to their corporate matters, including drafting shareholders agreements, employment contracts, purchase and sale of business assets, commercial leasing issues, as well as dissolution and partnership disputes. Mr. Wortman is joined by associate Sharlene Goldstein, Esq. who assists Mr. Wortman with regard to his community association matters.