Twice a year, every year, real property owners in the state of Ohio are required to pay property taxes to the respective county where the real property is located. However, if a property owner fails to timely pay the taxes owed, the amount owed becomes a lien upon the property. The state of Ohio allows county treasurers to pursue the delinquent property taxes directly, or the county treasurer may sell a tax lien certificate to the public.
A tax lien certificate provides the holder with a right to collect or enforce the tax lien, many times through foreclosure. Tax lien certificates can be attractive to investors because of the superior priority they are given under Ohio law (See Ohio Revised Code. section 5721.35). Tax lien certificates enjoy priority over most other liens against a property, including mortgages or judgment liens. Also, the tax lien certificate holder enjoys a priority position to purchase subsequent tax liens that may arise with the property. Tax lien certificates are generally sold in bulk. For example, if Franklin County, the Treasurer’s delinquent tax liens are sold in a single portfolio on a specific sale date during the year.
However, tax lien certificates are assignable and can be sold to investors to collect upon at a later time. (See Ohio Revised Code. section 5721.36) If the tax certificate is not redeemed by the property owner within the time period assigned to the tax certificate (typically one year from the date of sale), the holder of the tax lien certificate may foreclose upon the lien.
An investor tax lien certificate holder can initiate a foreclosure action by having a real estate attorney prepare a Notice of Intent to Foreclose upon the tax lien certificate. Once a Notice of Intent to Foreclose has been approved by the County Treasurer, who also approves attorney fees of the foreclosing real estate attorney and other amounts owed, the tax lien certificate holder must have their real estate lawyer file a complaint for foreclosure within 120 days of filing the Notice of Intent to Foreclose. The foreclosure process will proceed pursuant to Ohio Revised Code sections 5721.37 and 5721.39 until the property is sold at judicial sale.
The owner of the real property has options available to him to redeem the tax certificate during the minimum one year waiting period and the foreclosure process. The property owner or any other person entitled to redeem (such as a mortgage lien holder), may redeem the tax lien certificate at virtually any point in time, even after the sale of the property at judicial sale but before the confirmation of sale. After a Judgment Entry of Confirmation of Sale has been filed by the foreclosing party, the owner or other party’s rights to redeem are completely severed (See Ohio Revised Code section 5721.38)
For more information contact one of the real estate attorneys at Joseph & Joseph & Hanna by calling 614.449.8282 and request a telephone conference with one our real estate lawyers or contact us through this website.