Tax Sale Resale Property – What Laws Apply?

Tax Sale Resale Property refers to property that has gone through the Tax Sale or Sheriff Sale process, but was not sold. This property was “struck off” which means that the taxing entity that foreclosed on the property has taken possession of the Sheriff’s Deed for the property and is the legal owner of the property. They are now the ones responsible for selling the property. The laws that govern the procedure for “re-selling” this property are much more flexible than the original sale of the property.

  1. Time Period – The taxing unit now in possession of the property has no time restriction on when to sell the property and they may sell it by either public or private sale.
  2. Redemption Period – The same laws applying to redemption periods remain in effect even if a property is struck off. The redemption period begins on the date that the Sheriff’s deed is filed for record in the County Tax Office.
  3. Sales Price – Unlike at a Sheriff Sale, property that is being “re-sold” has no price restrictions, except that the taxing unit must seek permission from other taxing units if it sells if for less than the original minimum bid. (See #7 below)
  4. Property Not Sold Immediately – If the taxing unit holding the deed does not sell the property within six months of the time the redemption period ends, other taxing units that would be due part of the proceeds upon the sale can request that the property be resold at a Sheriff Sale.
  5. Resell Laws If the property is resold at a Sheriff sale, the process and laws applying to the sale would be the same as when the property was originally offered at a Sheriff Sale. Only the remaining redemption period (if any) would apply. It does not begin again.
  6. Validity of a Resale – Actions to question the validity of a resale are null and void if they are not filed before the one year anniversary of the resale.
  7. Selling for LESS than Value – If a taxing unit chooses to “re-sell” a property in a private sale (by a private auction or a sealed bid, etc.), they may only sell it for less than the market value or less than the amount of judgments against the property (the lesser of the two), with permission from the other taxing entities that have claim to a portion of the proceeds.

Bottom line, if a property does not sell at the Sheriff Auction, it will likely become a “Tax Sale Resale Property” that will be sold by the taxing entity. These properties can be bargains, and investors will find it well worth their while to contact the taxing entity and inquire about resale procedures!