Randy Saunders and Matt Abee of Nelson Mullins capture a state statute review in their white paper which covers the KRS Chapter 134 for the Kentucky tax lien sales. The certificates sold at tax sale are one-year tax delinquencies.
The tax sales happen yearly in Kentucky and usually don’t begin until July of each year and these sales are handled by the county clerk. Here is a summary of how the tax liens sales operate in Kentucky.
- Sales must happen within 90 and 135 days from the time the delinquency is filed with the county clerk.
- Any previous purchaser of a delinquency certificate has first priority in purchasing another certificate. If you are interested in purchasing subsequent certificates, a list of those priorities must be submitted at least 10 days before the sale and then those are removed from the actual tax sale. Payment is also due at this time.
- If a purchaser wants to buy other certificates, 25% of the purchase price is due and the list of certificates requested must also be supplied 10 days in advance along with a registration form.
- On the day of sale, a round robin method of bidding is used at all Kentucky tax sales. Order of the round robin is determined by random selection on the day of the sale and the purchaser must work their way down the list of their requests.
- A purchaser cannot request a parcel that was not on the list submitted 10 days in advance.
- Payment for the finalized purchases must be made on the day of the sale.
- A 12% interest is earned on the delinquency and there is a one-year redemption period known as the “tolling period.”.
Randy and Matt cover the foreclosure sales in another interview you can find here. As you can see, the tax lien sale process is quite a bit different than other states since you have to submit the list of parcels you wish to purchase in advance. This means that due diligence must be completed in a timely manner. Read more about the tax lien sale process in Randy and Matt’s white paper.