Tax Lien Auctions in Washington DC
The Law Offices of Paul D. Hunt assists investors and property owners with Title 47 property tax sales in Washington DC. Mr. Hunt has extensive experience handling matters related to Tax Sale Certificates and Title 47 litigation, including representing a party in a landmark court case that changed some of the rules governing tax liens in DC.
Whether you need assistance purchasing a property under the District tax lien auction or you need help fighting a tax lien sale of your property, we can provide the experienced legal counsel you need to ensure that your investment in the property is protected.
Real Property Tax Sales in Washington DC
The District Office of Tax and Revenue (OTR) holds an annual real property tax sale each July. Prior to the tax sale, the OTR will provide notice to the public of the dates of the tax sale and the terms of sale. The sale is typically held at the OTR office located at 1101 4th Street SW on the second floor of the West Building in Washington, DC. A list of the properties to be auctioned can be found on the OTR’s website or requested from the OTR’s office. A bidder must file a Combined Business Tax Registration Application (FR-500) before registering to bid at the tax sale. Any properties not sold at the tax sale or canceled for non-payment will be sold at a Discount Sale to be announced by the OTR.
The owner of the property has the right to redeem the property at any time, including up until a judge has granted a foreclosure complaint filed by a successful bidder. If the owner redeems the property prior to a foreclosure order being granted by the court, the bidder receives a refund of the amount paid at the tax lien auction, with interest. The interest rate for tax sales is 18 percent annually (1.5 percent per month) calculated beginning the first day of the month following the completion of the tax sale through the date the outstanding property taxes are paid by the property owner. However, if the bidder used a surplus bid to become the successful bidder, interest will not be paid on the surplus amount.
Washington DC Tax Lien Sale Guide for Investors
If you are an investor who wants to purchase real estate under the tax lien auction in DC, you need a tax lien attorney who understands each of the steps in the process to purchase and perfect title to tax sale property. If you mishandle any of the steps, you could impair your ability to make a profit on your investment.
The process of perfecting title to property purchased at a tax sale could take up to two years from the date of the Tax Sale Auction. Each of the following steps must be accomplished correctly to perfect title in the name of the purchaser.
- Final Payment Date — Within five days from the conclusion of the auction, a successful bidder must pay the balance of the bid. At that time, the bidder receives a Certificate of Sale.
- Title Search — Four months after the bidder pays the final payment, the bidder can proceed to retain legal counsel to perform a title search. It is crucial to perform a title search to identify parties who may claim an interest in the subject property. All parties who may have an interest in the property must be named in a foreclosure complaint.
- File a Foreclosure Complaint — Six months after the final payment date, the bidder can proceed with a foreclosure of the owner’s redemption rights. The complaint is filed in the Superior Court for the District of Columbia. The defendants named in the complaint must include all parties who may have an interest in the real estate, including the owner of record, trustees, lenders, the mayor, and the District of Columbia.
- Service of the Foreclosure Complaint — The plaintiff (the successful bidder) must serve the complaint on all interested parties by certified mail. In addition, the plaintiff must mail copies of the complaint to all interested parties by first class mail and post a copy of the complaint in a visible area on the property subject to the complaint. A sworn affidavit of service and a photograph of the posted copy must be filed with the court.
- Obtaining a Court Judgment — The defendants may respond to the complaint to allege defenses and request a hearing. If no one responds to the complaint, the plaintiff may request a default judgment. Before moving forward, the plaintiff must obtain a default judgment or a court judgment after trial granting the foreclosure.
- Request Tax Sale Bill — The plaintiff must serve a copy of the judgment order on the District Office of Tax and Revenue (OTR) to obtain a tax sale bill. The tax sale bill will contain a detailed accounting of all outstanding costs and fees owed to the OTR for the property.
- Obtaining a Tax Sale Deed — All accrued taxes and fees must be paid to obtain a tax sale deed transferring the property to the successful bidder. Once the bidder pays the outstanding debt owed, a tax sale deed may be requested from the District of Columbia Office of Tax and Revenue.
- Recording the Tax Sale Deed — The tax sale deed must be recorded with the District Recorder of Deeds to complete the process to obtain fee simple ownership of the property.
Even though a bidder obtains ownership of a property, there could be other issues to handle. For instance, if the previous owners have refused to vacate the property, the bidder may be required to take additional steps to remove the prior owners from the property.
Mr. Hunt has a thorough knowledge of all steps required to protect your interest. Our team of legal professionals is ready to assist you with each phase of the process to complete tax sale litigation in the District of Columbia.
We have many years of experience in this area of Real Estate law and can work with you on investment options regarding tax lien auctions. We specialize in tax issues with DCRA and OTR and offer sophisticated representation for investors.
Redemption of Property After a District Tax Lien Auction
If you are a property owner whose property is sold at a tax lien sale, you have the right to redeem the property at any time prior to a foreclosure order being granted to the successful bidder. Redeeming the property prevents title to the property being transferred to another owner.
To redeem your property, you must pay:
- All outstanding property taxes, including the current real property tax bill, plus any amounts billed by the OTR on behalf of DC agencies and DC Water.
- Vault and public space rental, in addition to business improvement district taxes owed to the OTR, with penalties and interest, if applicable.
- Expenses for the tax sale buyer, generally limited to $331.50 if the property is redeemed prior to the filing of a foreclosure complaint.
- If the property is redeemed after a foreclosure complaint has been filed by the tax sale buyer, you may owe legal fees and expenses that exceed the pre-litigation amount of $331.50.
If you are a homeowner facing a Title 47 Tax Lien Sale, you may have several options available to you to fight the sale. Mr. Hunt successfully represented the homeowner in the court case of Shoetan v. Link that resulted in changes in the laws governing District of Columbia Title 47 tax sales. The successful outcome in this court case resulted in additional options for some homeowners who are facing a tax lien sale.
Our law firm has specialized knowledge of the Title 47 tax sale process; therefore, we can fight for your right to keep your property. Some of the options that may be available include:
- Contest the property’s tax classification
- Request an audit from the District Office of Tax and Revenue
- Request a hardship exemption
- Referrals to real estate agents and/or lenders
- Probate Assistance
Before you give up the fight to prevent your home from being sold at a DC tax lien auction, you should discuss your case with an experienced DC tax lien attorney. The Law Offices of Paul D. Hunt offers a free assessment, so you can learn about your rights and potential options for keeping your property.
Do You Need Help with a Washington DC Tax Lien?
Contact The Law Offices of Paul D. Hunt by calling 202-463-1965 for a free initial consultation. DC tax lien auctions are complex and require specific knowledge of the process and rules. To avoid a costly mistake, talk to an experienced tax lien lawyer.