Road Map to Washington DC Tax Lien Auctions

Learning How to Navigate Tax Lien Auctions in Washington DC

If you are searching for an investment opportunity in Washington DC, you may want to consider the District’s tax lien auctions. However, there are many important things that you should know before deciding to invest your money in tax lien auctions. The Law Offices of Paul D. Hunt can help you navigate the tax lien auction system to avoid some of the mistakes that first-time buyers make when bidding on DC properties with tax liens.

What are DC Tax Lien Auctions and How Do They Work?

Each year in July, the Office of Tax and Revenue (OTR) holds a tax lien auction for properties located in Washington DC. The OTR provides notice of the properties that are being sold for failure to pay taxes. Investors and others can bid on properties being sold through the tax sale auction. Once the auction is complete, the property owner has one year to redeem the property by paying the taxes and all other fees due for the property. If a property owner redeems the property, the successful bidder receives a full refund plus 18 percent interest. The interest is calculated from the month following the tax auction through the date the property owner redeemed the property.

If the property owner does not redeem the property, the successful bidder can begin the process to perfect title to the property after the redemption period ends. The process to perfect title can be a complex undertaking depending on the piece of property in question. Our law firm assists successful bidders perfect title to tax lien properties they purchase through the auction. Unfortunately, if a bidder did not conduct thorough research before bidding on properties being sold at the DC tax lien auction, a bidder could lose money instead of making money on the investment. In some cases, the loss could be substantial.

Attorney Paul D. Hunt urges investors and potential buyers to contact our office before the tax lien auction. Auctions are considered buyer beware (caveat emptor) since there is a chance of a windfall for the investor. In other words, you are bidding on properties in an “as is” condition, including any liens attached to the property or any title defects that could impact clear and free ownership of the property. Therefore, you must make sure that you know the hidden costs that could significantly impact the return on your investment. Hiring an experienced DC tax lien auction attorney can help you avoid investing in the wrong property.

Why Is It Important to Contact the Law Offices of Paul D. Hunt Before Going Through the Tax Lien Auction in Washington DC?

There are several important reasons why you want to contact the Law Offices of Paul D. Hunt before you attempt to purchase property in the tax lien auction in Washington DC. Below are just some of the most important reasons why you need our help to ensure you are not purchasing a poor investment property from the tax lien auction.

Researching to Locate Important Property Information for You

Before you purchase a property at the tax lien auction in Washington DC, you want to know as much as possible about that piece of property.  Research before the auction is key to choosing the best investment properties. Attorney Hunt can provide you with key information about the property including:

  • The square footage of any buildings on the property;
  • The exact acreage of the lot;
  • Whether the property is vacant;
  • If the property is unusable, such as an alleyway;
  • The applicable zoning ordinances; and,
  • Whether the property is used as parking space.

Some information may be obtained by searching the OTR’s tax database. However, the more information you have about a property before the tax lien sale, the better prepared you will be to avoid poor investment choices. In some cases, a property listed on the auction may seem like an attractive opportunity until you review the specific information for the property.

Research Ownership and Chain of Title

You do not want to purchase a piece of property that has serious title defects. If so, you could own a property that costs much more to clear the title to the property than the property is actually worth. Therefore, Attorney Hunt carefully researches the public records and recorder of deeds to determine:

  • Who is the current owner?
  • Are there any problems in the chain of title to the property?
  • What liens are on the property?
  • Is there a way for you to avoid fees and taxes?
  • How many defendants will you be required to name in the lawsuit to obtain clear title to the property?

A thorough title search is a good idea before you purchase a piece of property at the DC tax lien auction. Being the successful bidder for a property that has multiple title defects and substantial liens could be very costly and time-consuming for you when it comes time to file for the title to the property.

Choosing the Best Properties for Bids

A very important service our law firm provides clients is advising them on which properties make a solid investment option. For example, homes that have equity make a decent 18% investment position.  In addition, we help you focus on properties that are tied to other financial institutions because those properties are usually safer investment opportunities.

Other good investments are properties that are not likely to be redeemed by the owner. Vacant and older properties can often provide a good return on your investment. On the other hand, there could be properties that may be newer that still make a good investment opportunity for other reasons. By using a seasoned attorney who understands the process of tax lien auctions in DC, you receive the benefit of years of experience researching and working with properties sold in the tax lien auction.

Do not make a mistake and bid on tax lien properties before you have all the details and fully understand what you could be stuck with if the property is not redeemed. An experienced DC tax lien attorney can make all the difference. Hiring the right attorney to help you with the tax lien auction can mean the difference in bidding on great investment properties or making risky and potentially poor investments.

Call for More Information About Washington DC Tax Lien Auctions

Contact The Law Offices of Paul D. Hunt by calling 202-463-1965 to discuss the upcoming tax lien auction in July. Our team of legal professionals is here to help you prepare for the DC tax lien auction in July.

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