Encumber a property

jdogpupil · #1 07-10-2006, 01:52 PM

How do I go about placing a lien against a property?

Here's the situation:
My neighbor is considering moving into a particular abandoned property and possessing it. This home has $10,000+ in delinquent taxes. Is there any way to encumber the property for the 10,000 as a precaution?

Ice · #2 07-10-2006, 02:36 PM

Quote:

Originally Posted by jdogpupil

How do I go about placing a lien against a property?

Here's the situation:
My neighbor is considering moving into a particular abandoned property and possessing it. This home has $10,000+ in delinquent taxes. Is there any way to encumber the property for the 10,000 as a precaution?

Can you be more specific. Does he want to encumber the property... or do you? Who wants to protect what from whom? What is the goal?

Ice

B Rookard · #3 07-10-2006, 04:39 PM

Quote:

Originally Posted by jdogpupil

How do I go about placing a lien against a property?

Here's the situation:
My neighbor is considering moving into a particular abandoned property and possessing it. This home has $10,000+ in delinquent taxes. Is there any way to encumber the property for the 10,000 as a precaution?

Wrong thing to do.

If there are back taxes, then what usually happens is that eventually that property will be foreclosed and sold for non-payment of taxes (and depending on the jurisdiction, this might take a couple of years to happen). Usually, all liens are wiped out when title vests in the state. Then, when they sell the property, the property is sold free and clear. The new owner is entitled to eject any occupier from the premises.

Since title will vest in the state, you can't adversely possess during the time the property is owned by the state.

Furthermore, on what basis do you hope to place a lien on the property? Recording bogus liens on property could invite a slander of title action against the "lien holder" who improperly filed a lien ... plus, there may be some sort of criminal fraud proceedings.

Why not let the property go to foreclosure, and then try to get the property at the tax foreclosure auction? In Michigan, the minimum bid is just the amount of taxes owed, plus the costs incurred in bringing it to sale ... meaning you can get the property cheap ... and it would be legal.

charlesa6 · #4 07-10-2006, 06:24 PM

Quote:

Originally Posted by Ice

Can you be more specific. Does he want to encumber the property... or do you? Who wants to protect what from whom? What is the goal?

Ice

I concur, more detail, so that we can give you suggestions, and advice.

Ice · #5 07-10-2006, 06:53 PM

B R said exactly what I initially thought. Why not just pick it up at the auction... cheap?

But a better way to do it would be to go and pay the back taxes ... and then lien the property. By paying the back taxes, you could make that property yours.

You will have to do the research to figure out how that is done.

Ice

Livefire · #6 07-10-2006, 07:37 PM

I believe most counties will, after 3 yrs of unpaid taxes prepare a tax lien certificate and auction them off. Each state then has a redemption period where the original owner can pay off the individual holding the certificate them amount of back taxes and interest accrued. After the redemption period has elapsed the state issues a tax deed and the individual can the do a quiet title action to procure the property. Like Ice said, ya gotta do yer homework on this, each state is different.

Ice · #7 07-11-2006, 07:45 AM

On the money, Livefire.

That is exactly how it works... but you must find your state code to support your position and actions.

I'm looking for the code in my spare time... I've got a plan.

Ice

jdogpupil · #8 07-11-2006, 12:30 PM

I'm familiar enough with adverse possession -

My friend does landscaping so once the neighbors told him all about the abandoned property he did the research like I told him to locate any potential owners or heirs.

I'm not in a position to pay the back-taxes on the property. Like you suggest, Ice, Brian is going to begin paying the taxes in partial-payments per the established City payment plan.

I'm not knowledgeable enough of tax-sales here in California, but I do know it would be far cheaper to pay the taxes, utilities, and openly possess the property.

I've heard about placing a lien on an run-down property if it's a "blight on the community". Thanks for all the good comments.

Ice · #9 07-11-2006, 04:42 PM

If the taxes is going to be paid via a payment plan... then it won't go up for auction as long as the payments are kept current.

And when all is said and done... the property will change hands as stated in previous posts.

Ice

Livefire · #10 07-11-2006, 06:59 PM

ROOKARD said to pick up the property cheap at auction, the only problem I see with his advice is that tax lien auctions have become far more popular in recent years. Therefore that property might not be so cheap to procure at auction. One might also scour the deliquent tax rolls and contact the owners or heirs and make a mutually beneficial arrangement. For example assume the taxes and a one time payout and they quit claim the property to you.....many ways to do this! For those of you in Texas I believe the redemption period is 6 months...excellent compared to a state like Michigan where it is 18 months.