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Expert Interview with William Hereford on the Alabama DOR Properties

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Tax Sale Resources
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Click here to download the white paper by William Hereford of Burr & Forman concerning the Department of Revenue held properties.

Introduction

William Hereford of Burr & Forman has an extensive interview and white paper concerning the land sales and liens sales held in Alabama, but here he goes into depth on how to acquire parcels held by the Department of Revenue.  Before the statute changes in Alabama allowing for tax lien sales, thousands of properties had been purchased by the state at land sales because no one bid on them.  This means up until 2017, there were tens of thousands of parcels being held by the state meaning a big opportunity may be possible for investors.  The reason for this massive number of state held properties is due to the statutory leeway of redemption in what is called the “judicial redemption” period of the land sale process.  More on that in Hereford’s white paper.

Interview Summary

This summary is specific to the Department of Revenue held properties commonly known in the industry as over the counter properties.  As of 2021, there were over 38,000 parcels on the DOR list throughout all counties and is a result of issues with the historic land sale system for delinquent taxes.  There is discussion as to why this has happened but most speculation leans toward the judicial/court cases favoring the property owner and allowed “judicial redemption” period in the land tax sales.  In this interview, Hereford explains how an investor can safely purchase these DOR held properties.  

  1. An application is required to purchase these properties and the first to send in an application and send in funds once the application is accepted would receive the property.
  2. The past due taxes plus all interest is what is due when purchasing these properties.
  3. If a parcel is three or more years delinquent, a tax deed is issued by the state of Alabama but it does not come with an insurable title.  
  4. Once the deed is received from the state, you are then subject to the judicial process of the deed in the state of Alabama.  The two actions that can be taken include Ejectment Action and Quiet Title Action.  

Conclusion

For investors, the DOR held properties are an excellent opportunity especially since it is not a sale system but instead anyone can purchase properties from this list reducing the competition.  However, heed caution because once you purchase any property with over three years of delinquencies, the purchaser must still follow the processes for full possession of the parcel and removing all rights to redeem.  For more information on those processes, check out William Hereford’s other interview and white paper.

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