Your Knowledgeable North Georgia Law Firm

Your Knowledgeable North Georgia Law Firm

Tax Sales-a Risky Investment for the Uninformed Investor

by | Nov 21, 2022 | Commercial Real Estate, Real Estate Law, Residential Real Estate

Purchasing real estate through tax sales in Georgia at bargain basement prices can be a risky proposition.  If you are considering investing in tax sales, here are a few helpful tips that you need to know.

  1. Examine the title history prior to the tax sale. In Georgia, the county tax commissioner has the right to file a judgment lien against the taxpayer for outstanding taxes and sell the property at public auction.  The successful bidder at the tax sale will be conveyed title to the property via a tax deed.  However, if the judgment lien is not against the owner of the property, or if there is a break in the chain of title prior to the tax sale, the tax deed and the resulting sale may be void.  Obtain a title examination before you purchase.


  1. Owner’s Right of Redemption. The owner of the property at the time of the tax sale has the right to “redeem” the property by paying the redemption price to the purchaser of the property at the tax sale.  The redemption price is the price paid by the purchaser of the property at the tax sale plus “supercharged” interest at rates set forth in the redemption statute.  There is no time limit for the owner to exercise the right of redemption unless the tax sale purchaser follows statutory procedures to foreclose (or bar) the owner from exercising the right of redemption.  The foreclosure process cannot be exercised by the tax sale purchaser until at least 12 months following the tax sale.


  1. File a Quiet Title Action. A tax deed does not convey “insurable title”, meaning an insurance company will likely not insure the property once it is purchased. Most title insurance companies have strict requirements for issuing title insurance policies on properties that have passed through a tax sale.  The title insurance companies typically require a judicial decree issued by the Superior Court of the county where the property is located in a quiet title action, so after you have foreclosed the right of redemption, you will need to file a quiet title action through a licensed attorney.


In a recent case, Hunt & Taylor attorneys Ralph Taylor and Megan DiNatale represented a property owner whose property had been sold at a tax sale some 15 years earlier, without their knowledge.  The purchasers at the tax sale filed a quiet title action against the property, and Mr. Taylor and Ms. DiNatale were able to set aside the tax sale due to errors made by the tax commissioner’s office.  As a result, the property owners were able to keep their property, and the purchasers at the tax sale lost their investment.

If you have purchased real estate through a tax sale, or if you are considering investing in tax sale properties, contact Hunt & Taylor for helpful advice and representation.