Tax Deed Sale or Tax Deed Fail?

By Clark, Campbell, Lancaster & Munson, P.A.

Q: I’d like to purchase property at an upcoming Tax Deed sale. What do I need to do, and what should I be aware of?

A: Prior to the Tax Deed sale, you’ll need to visit your local Clerk of Court’s website to register and place a deposit which is typically the greater of $200 or 5% of your maximum bid and should be made by electronic check or wire transfer. For example, you should deposit $2,500 if you intend to bid up to $50,000. If you wish to purchase the property with an LLC or other entity, you should form the entity well in advance of the Tax Deed sale.

If you have the winning bid, within 24 hours you must pay to the Clerk the balance of the bid along with the recording fee and state documentary stamp taxes based on the winning bid amount. After the Clerk receives full payment, the Clerk issues and records the Tax Deed. However, according to statute, the property owner has the right to redeem his property by paying all back taxes and costs at any time before the successful bidder makes full payment to the Clerk for the Tax Deed.

When purchasing property at a Tax Deed sale, there are several things to be aware of. The Clerk must take certain steps and actions before the property may go to Tax Deed sale. If these requirements are not strictly complied with, the Tax Deed may be invalid. Furthermore, the tax certificate holder applying for the Tax Deed is sometimes the high bidder at the Tax Deed sale because the tax certificate holder is entitled to a credit against the tax certificate holder’s bid price equal to the amount of the tax certificate. Also, you should keep in mind that there may be environmental issues with the property, and you probably won’t be able to have a proper environmental assessment done until after the Tax Deed sale which is risky.

Moreover, a Tax Deed is basically an administrative Quit Claim Deed without any warranty of title, and the former owner has 4 years to bring an action to challenge the Tax Deed sale. Therefore, many title insurance companies will require a quiet title action if you decide to sell the property within 4 years of purchasing the property and wish to provide title insurance to your buyer.

On top of all this, the following are some of the interests in real property that survive the issuance of a Tax Deed:
• Easements
• Matters reflected on a plat
• Covenants and restrictions that run with the land
• Mineral reservations
• Federal tax liens
• Subordinate liens which are held by state, municipal, or county governmental units.

Therefore, it would be wise to have a real estate attorney do a title search for the property you plan to purchase well in advance of bidding so you’re aware of any issues before you wind up with a problem.

While many view Tax Deed sales as an easy way to scoop up valuable property at an inexpensive price, if you don’t do your homework beforehand, you might scoop up a headache instead. A savvy real estate attorney can help you navigate the process and choose the right property.

Dealing with a Problem Tenant or Unwelcome House Guest

By:  J. Matthew Kelly, Esq.
Clark, Campbell, Lancaster & Munson, P.A.

Are you dealing with a problem tenant or an unwelcome house guest? If so, Florida law provides three mechanisms for removing an individual from possession of real property – eviction, unlawful detainer, and ejectment.

Eviction

The most common way to remove an individual from possession of real property is an eviction proceeding. An eviction proceeding in Florida is governed by Chapter 83 of the Florida Statutes. An eviction is the appropriate proceeding to remove an individual who leased the premises but has violated the lease or has failed to pay rent.

The most common eviction example is against a tenant who has failed to pay rent. In a situation where a tenant has failed to pay rent, the first step in the eviction proceeding is to provide the tenant with a three-day notice. This is a document designed to inform the tenant that he has failed to pay rent and is indebted to the landlord. The three-day notice has certain legal requirements as to its content and method of delivery. If the three-day notice is defective in content or delivery it can significantly delay any eviction proceeding.

Once a three-day notice has been delivered, the tenant has three days (excluding weekends and legal holidays) to pay the demanded rent or to vacate the premises. If the tenant fails to pay the rent, or vacate the premises, the landlord may then file an eviction complaint with the court. Once a tenant is served with an eviction complaint, the tenant has five days to answer the complaint. If the tenant fails to answer the complaint the landlord can seek a default judgment; which would avoid the need for a trial. If a default occurs, the landlord can move for a final judgment and writ of possession to restore them to possession of the property.

If a tenant chooses to contest or defend against the eviction proceeding for grounds other than that the rent has been paid, the tenant is required to pay into the registry of the court alleged rent owed as described in the complaint. If the tenant fails to pay the alleged rent owed, or fails to challenge the rent amount, the tenant waives his defenses and the landlord is entitled to a default judgment in the eviction proceeding and a writ of possession to restore the landlord to possession of the property. A successful landlord is entitled to recover his reasonable attorney’s fees expended in the eviction process.

 

Unlawful Detainer

An unlawful detainer action is governed by Chapter 82 of the Florida Statutes. An unlawful detainer action can be used to remove an individual who is residing in a home, does not have a legal right to the home, and where there was never a lease agreement. The person bringing the unlawful detainer action must have a legal right to the residence or property; that is to say, the person bringing the action must own the property or be the legal tenant of the property.

The most common uses of this type of action involve a significant other who has moved in but a break-up occurs and the significant other refuses to leave, removal of a troubled family member who was invited in to get back on their feet but fails to obey house rules, removal of a friend who was once a welcome guest but has now refused to leave, or even squatters that have moved into a residence without permission.

Unlike an eviction, an action for unlawful detainer does not require specific notices prior to being able to file the action with the court. Like an eviction, an action for unlawful detainer requires the person you are attempting to remove to respond in five days.

The important thing to remember with an unlawful detainer action is that there must not be a landlord-tenant relationship or an agreement for payment of rent. If this kind of relationship exists an eviction proceeding is the proper mechanism for removal.

 

Ejectment

An ejectment action is governed by Chapter 66 of the Florida Statutes. An ejectment action is most commonly used in a similar manner to an unlawful detainer action. Like an unlawful detainer action, ejectment is commonly aimed at girlfriends, boyfriends, family members, friends, or other individuals who have overstayed their welcome where there is no landlord-tenant relationship.

There are two main distinctions between an ejectment action and unlawful detainer action. Ejectment actions are not summary proceedings, meaning ejectment may take longer to reach the goal of removal compared to an eviction or unlawful detainer action. Secondly, an ejectment is the appropriate action when the individual you are attempting to remove may claim some form of entitlement to the property. An example of this would be where the person you are attempting to remove claims some form of ownership of the property.

Florida law provides numerous mechanisms for removal of problem tenants or unwelcome house guests. It can often be difficult to determine which type of action is best for your situation. It is also easy to hit roadblocks throughout the removal process that can significantly delay any removal. If you are faced with taking legal action to remove an individual from your property I recommend hiring an experienced attorney to guide the process.

Matthew Kelly is an attorney with the law firm Clark, Campbell, Lancaster & Munson, P.A. in Lakeland. Questions can be submitted to thelaw@cclmlaw.com.