After Purchase of Tax Deed Property
Tax Deed Properties in Arkansas.
What happens after I purchase Tax Deed property in Arkansas?
When do I receive a deed to the property I am purchasing?
After paying in full for a property, the buyer will receive a “Purchaser’s Certificate.”
This document does NOT convey title or ownership to the property. It simply states that you have paid in full for a parcel at the auction. Here is what buyers can expect after an auction:
- Purchaser’s Certificate issued
- Delinquent Owner has ten (10) business days to redeem
- Limited Warranty Deed issued to purchaser
- Deed sent to Circuit Clerk’s office to be recorded
- Deed forwarded to the purchaser
The Limited Warranty Deed is the only deed the Commissioner of State Lands will issue for this tax deed property.
Limited Warranty Deed
In this situation, a Limited Warranty Deed is very similar to a quitclaim deed and only transfers any interest the State of Arkansas held in the property. The Commissioner does not guarantee usability, accessibility, or existence of the property nor can it guarantee or warrant a clear title to the property.
If a parcel or property is redeemed following a purchase, a full refund of the purchase price will be returned to the buyer. There will be no refund for legal or renovation costs, nor will interest be paid on the original purchase money.
The sale is also subject to a ninety (90) day litigation period beginning the date the Limited Warranty Deed was issued. During this period, purchasers should not make any major changes or improvements to the property. If the sale is overturned in court, the buyer will generally be entitled to a refund of the purchase price, only.
Depending on circumstances, there may be no time limitation on the former owner or interested party’s right to challenge the sale in court.
If the property sells for more than the amount of taxes owed, excess funds may be paid to former deed holder. Former deed holders and lien holders should contact the Commissioner of State Lands to see if any excess funds are available after the parcel has sold. These funds are not automatically paid out, so ask the Commissioner how to request payment, if excess funds are available.
During and After the Sale
The Commissioner of State Lands advises buyers to seek legal consultation in order to establish stronger title to properties purchased through a tax sale. The Commissioner cannot guarantee title to these properties.
In most cases, buyers of tax delinquent land will be required to obtain a decree of confirmation and quiet title before title insurance can be issued for the property. Buyers of tax delinquent land should be prepared to incur additional legal expenses in order to gain clear title to the property.
To Confirm and Quiet Title
Establishing a clear title to properties purchased through tax sales is accomplished by filing a Complaint to Confirm and Quiet Title. This is a complex legal process consisting of an action filed with the County Circuit Court where the property is located. Arkansas state law has very specific requirements for these types of actions. Please consult an Arkansas Real Estate attorney who has experience in this area to assist you with confirming your title.
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Published on: Jul 20, 2015
Last updated: February 17, 2018 at 12:22 pm
If you have purchased tax delinquent (tax deed) property in Arkansas and need legal assistance to confirm or quiet your title, please contact Deborah at The Hardin Law Firm, PLC.
Call: (501) 247-1830 or Email: firstname.lastname@example.org.
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SERVING: Cabot, Beebe, Ward, Searcy, Jacksonville, Lonoke County, White County, Faulkner County, and other central Arkansas areas. We also routinely serve out-of-state property owners, who require representation in Arkansas.
DISCLAIMER: The information contained in this web site is intended to convey general information. It should not be construed as legal advice or opinion. It is not an offer to represent you, nor is it intended to create an attorney-client relationship. Laws and procedures can and do change. You should consult a real estate attorney licensed in your area.