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Alabama Tax Lien Foreclosure Sales Exclude You

In 2018 the Alabama Legislature passed sweeping changes that the 67 counties could opt into for their tax lien sales and in 2022 the first batch of those certificates mature into deeds. As of spring of 2022 almost all the counties have migrated to the new system.

2019 tax lien certificates become deeds and can be foreclosed on in Alabama and that process is available for the first time in 2022. Unfortunately for investors, there will be no foreclosure sale on the courthouse steps, and only people with previous rights in the property can redeem. There will be no bidding, just the opportunity for the owner to redeem. So, after a long, fruitless three-year wait the 2019 investors can finally have their liens redeemed for what they paid.

For example, in Shelby County Alabama, there were almost 400 tax lien certificates sold in 2019, and all but about 25 have been redeemed. That means the investors who bid the interest rate to zero literally lost money on each tax lien they bought. And the light at the end of the tunnel for those certificates is that they will become deeds on 2 April 2022, and the investors can begin the month-long legal process of foreclosure at which anyone with a legal interest can redeem the property, at cost.

The law prohibits tax lien certificate investors from taking possession or even protecting the property from waste, investors have no means of increasing their return: Investors will only get reimbursed for the taxes they paid.

The foreclosure process in Alabama is an amalgamation of Alabama judicial foreclosure process and Arizona tax lien foreclosure process and will take several months on notice followed by complaint filings, motions and ultimately either an order of title for the investor or for the redemptioner. Once that order is published it will be as good, or better, than a warranty deed in Alabama and will represent marketable title.

Alabama tax lien law has changed every year for the last five years and there are several proposed changes in eth legislative queue for this year. Investors in Alabama tax lien certificates should have a lawyer that is well versed in the Alabama law because with this being the first year of foreclosures, there are bound to be legal and procedural changes for the next several years as well. Alabama ax lien certificate sales are online and operated by GOVEASE and as of 25 February 2022 St. Clair, Tallapoosa & Walker County tax auctions are available for registration. Attorney Gregory S. Stanley

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