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Redemptions

Redemptions. District 3: Patty Bartlett (Logan), Bob Sagel (Morgan), Linda Statz (Phillips), Wanda Lowery (Sedgwick). Definition. Redemption of a tax lien is when: The taxpayer did not pay their property taxes The Treasurer sold a lien on the property at tax lien sale

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Redemptions

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  1. Redemptions District 3: Patty Bartlett (Logan), Bob Sagel (Morgan), Linda Statz (Phillips), Wanda Lowery (Sedgwick)

  2. Definition • Redemption of a tax lien is when: • The taxpayer did not pay their property taxes • The Treasurer sold a lien on the property at tax lien sale • The taxpayer redeems by paying the taxes, interest, fees and penalties to remove the tax lien from the property

  3. Who has Right to Redeem §39-12-103(1) • Owner including agent, assignee & attorney • Any person having legal or equitable claim therein; (i.e. lessee, optionee, easement holder, lienor - including if retained in satisfaction of debt, assignment & agency, assignee of lienor, installment land contract buyer, townhouse owners, party recording lispendens) • Owner of undivided interest - §39-12-103(2) & 39-12-113

  4. Who Cannot Redeem • Limited Partner in limited partnership • Bank holding only lien on note & deed of trust against sold property • Surface owner has no right to redeem severed minerals under his property • Does have right of first refusal to purchase the lien prior to tax lien sale - §39-11-150

  5. Redemption Time Frame • Mobile home located on property owned by another individual – Minimum of 1 year to redeem • Mobile home located on property owned by same individual – Minimum of 3 years to redeem • Real Property – Minimum of 3 years to redeem

  6. Redemption Time Frame • Redemption must be exercised prior to issuance of Treasurer’s Deed or Certificate of Ownership • Property owner under legal disability (as defined in 13-81-101(3) C.R.S.) – • §39-12-104 –extended to earlier of 9 years after date of recording tax deed or 2 years after disability removed or ceases

  7. Redemption Time Frame • Tax lien sold to an individual ceases to be a lien 15 years after date of sale, unless an application for Treasurer’s Deed is pending – 39-11-148 C.R.S. • Tax lien struck off to County ceases to be a lien 30 years after date of sale

  8. Redemption Time Frame • When a lien has expired, the Treasurer shall immediately issue a Certificate of Cancellation and enter “Cancelled by provision of section 39-11-148, C.R.S.” in tax sale records • The Certificate of Cancellation is to be presented to the Clerk and Recorder who shall enter same in the record of land & endorse date of entry & file same

  9. Redemption Time Frame • When a lien becomes unenforceable pursuant to 31-25-1119 C.R.S. (bonds or warrants issued for public improvements; i.e. street & alley improvements, special districts for sewers) Treasurer shall immediately issue a Certificate of Cancellation & enter “Cancelled by provision of sections 31-25-1119 & 39-11-148 C.R.S.” & file with Clerk and Recorder

  10. Redemption Dates • Anytime before execution of deed - • §39-12-103(3) • Execution means signing of deed - • §39-11-129

  11. Redemption Payment • Required to pay entire lien amount; i.e., • Amount sold at tax lien sale (not including overbid), • Amount of endorsement for each succeeding year or years’ taxes, • Interest at the rate the lien was sold for from date of each payment (interest is calculated the first of each month) • $7 redemption fee

  12. Redemption Payment • Statutes do not require certified funds • Can make it your office policy • Record redemption information on original Tax Lien Certificate & tax sale record • Suggest that Treasurer keep all original Certificates in their safe keeping for purpose of endorsements & redemptions

  13. Redemption Payment • If applicable, include Treasurer’s Fee of $35 for properties with an assessed value of less than $500 and $75 for properties with assessed value of $500 or more (check value at time of sale & request for Deed), and costs of Treasurer’s Deed process including title work, copies, postage

  14. Redemption Payment • If a Lien Certificate is lost, it requires proof given to and a Certificate issued by Board of County Commissioners & recorded by Clerk in the Recorded Proceedings (39-11-120(3) C.R.S.)

  15. Redemption Payment • Redemptions involving Mobile Homes • Notify Department of Revenue so lien may be removed in the State’s record • Submit $5.00 fee & copy of Redemption along with their form DR2695 • Redemption does not change ownership of parcel being redeemed

  16. Projected Redemption • A Projected Redemption is prepared for the party desiring to redeem, stating the amount required in any given month

  17. Certificate of Redemption • Certificate of Redemption is issued to show full amount of Redemption • If tax lien is recorded with the Clerk and Recorder, record Certificate of Redemption • Treasurer issues check to the tax lien investor • Report to the IRS interest totaling $10 or more earned by each investor during the year on form 1099-INT each January

  18. Assignment of County & Individually Held Tax Lien Certificates • Certificates of Tax Liens are assignable documents & may be assigned on original Tax Lien Certificate or by separate Assignment • Assignments should be noted in tax lien records and in computer system

  19. Assignment of County & Individually Held Tax Lien Certificates • When assigned, assignee assumes position of the tax lien buyer • Redemption funds are payable to current holder of tax lien whether original buyer or assignee

  20. Assignment of County Held Tax Lien Certificates • When assigning a County Held certificate • Have individual request assignment in writing • Treasurer may assign County held certificates less than $10,000 in taxes (39-11-120 & 39-11-122 C.R.S.) • If greater than $10,000 it must be approved by administrator and published

  21. Assignment of County Held Tax Lien Certificates • Board of County Commissioners may determine amount necessary for assignment of County held tax lien in accordance with §39-11-120(4)

  22. Assignment of County Held Tax Lien Certificates • May assign tax lien for nonpayment of irrigation or drainage district tax or assessment by agreement with Board of Directors of district involved - 39-11-123 C.R.S.

  23. Assignment of County Held Tax Lien Certificates • If assigned when lien is 15 years old or will become 15 years old within 1 year of assignment, assignee shall be entitled to a Treasurer’s Deed if applies for a Deed within 1 year from date of assignment

  24. Assignment of Individually Held Tax Lien Certificates • No assignment fee is collected when assignment is from an individual investor

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