Tax Deeds in Florida

THE INFORMATION CONTAINED HEREIN IS PROVIDED FOR INFORMATIONAL PURPOSE ONLY. IT IS NOT INTENDED AND IS NOT TO BE INTERPRETED OR USED AS LEGAL ADVICE. EACH LEGAL PROBLEM IS UNIQUE; THEREFORE, CASE SPECIFIC LEGAL ANALYSIS BY A LICENSED ATTORNEY IS RECOMMENDED.

So, you have decided to get into the tax deed game. Well, this is a good place to start, at least this author thinks so.

Let us start with the basics.  A tax deed is a deed to real property issued by a county level governmental entity.  The entity depends on how the particular county is organized.  The statutorily default entity is the county clerk, as is in Miami-Dade and Palm Beach counties.  In Broward County, a tax deed is issued by an entity under the auspices of the Board of County Commissioners.   Knowing the entity that administers the tax deed sale is important in order to know who holds the surplus from the sale.

A tax deed is different from a tax certificate.   Tax certificates are essentially tax liens that are issued on a real property for each year property taxes are not paid.  For example, given a condominium unit on which the 2011 taxes are not paid, the county issues a tax certificate for 2011.  If the owner continues to be delinquent in 2012, the county issues another certificate on the same property representing the 2012 property.  Concurrently, if the 2008 taxes were not paid on the same unit, the county would have issued a different tax certificate encumbering that unit representing the 2008 taxes.

Tax certificates are sold the year following when the taxes were due. For example, using our condominium unit from above, the certificate representing the 2008 taxes would be sold the following year, 2009, around May, after the last deadline to pay one’s delinquent property taxes.

The tax certificates are sold in a reverse auction where purchasers bid down the interest rate that a certificate would pay.  The starting and highest interest is 18 percent.  Bidders bid down the interest rate in 0.25% increments.  Non-bid certificates are issued to the county.

Redemption of certificates is done through the county by paying the outstanding taxes, fees, and interest.  Most certificates get redeemed.  For the ones that do not, a tax certificate holder must initiate the tax certificate foreclosure process through the county.

The tax certificate foreclosure process is initiated by the filing of an application for a tax deed by the tax certificate holder.  However, a holder must wait 22 months before it can file the application. Accompanying the application, the certificate holder must pay certain application and processing fees, but most importantly it must pay to redeem any other outstanding certificates on the property, even ones that were issued later than the certificate held by the applying holder.  The rest of the process, including sending notices to interested parties and the holding of the tax deed sale, is done by the county in what is akin to an administrative foreclosure.

Florida law requires strict compliance with the notice requirements.  The county runs a current owner title search on the property and send notices to all the outstanding lienors.  Additionally, it sets a tax deed sale and runs a notice by publication in a local newspaper of its choosing. Also, at least 20 day prior to the sale the sheriff is sent to make service in person at the property and at the last known address, if different and within the county limits.  The notices contain, among other, the tax deed sale date and pay off amounts.  The bidding starts after the starting bid is declared, and just like most other auctions, the highest recognized bid wins.

The tax deed sale is the culmination of the process whereby the certificate hold redeems its investment, plus interest, or gets the property.  Currently, the tax deed sales at Miami-Dade, Broward, and Palm Beach counties are done by an auction at a public outcry, i.e. in person.  The county representative reads out the tax deed file number, the tax certificate number, and the legal description, among others, to signify which property is up for sale.