Section 40-10-199 Retention of Tax Liens Not Sold at Auction; Private Tax Lien Sales; Reporting.
AI-assisted research summary: This provision lets the tax collecting official sell unsold tax liens by private sale, sets a minimum sale amount, and gives the private purchaser interest capped at 12%. It also lets certain municipalities buy unsold liens, foreclose redemption in some cases, and requires specific prefiling notices.
(a)(1) Tax liens that are not sold at the tax lien auction conducted by the tax collecting official shall be separated in the tax lien auction list as prescribed by Section 40-10-183, and the lien shall continue pursuant to Section 40-1-3. The tax collecting official, at any time after the tax lien auction date, may sell at private sale an unsold tax lien for no less than all taxes, interest, penalties, costs, and fees, plus the amount to be paid to the holder of a tax lien certificate who has not exercised his or her first right to purchase as provided in Section 40-10-191. The purchaser at private sale shall be entitled to interest on the amount paid at a rate agreed to by the tax collecting official, not to exceed 12 percent. All private tax lien sales shall be entered in the record of tax lien auctions and sales, as provided in Section 40-10-188. (2) a. Tax liens located within a Class 2 municipality which remain unsold in three successive auctions may be acquired by the municipality after the third tax lien auction for the best price offered without regard to the amount of taxes, penalties, and interest due. All such sales shall be entered in the record of tax lien auctions and sales, as provided in Section 40-10-188. If the property is thereafter redeemed or sold to a third party, or the municipality’s tax lien certificate is sold, the municipality shall not be entitled to interest on the amount paid in a best price sale under this paragraph. Unless the property is lawfully occupied as a residence at the time of the sale of the tax lien certificate to the municipality, the municipality purchasing the tax lien under this section may file an action to foreclose the right to redeem and quiet title as set forth in Section 40-10-197 at any time after it becomes the holder of all of the sold, unexpired, outstanding tax lien certificates. b. Notwithstanding the provisions of Section 40-10-197(b), the municipality purchasing tax liens under this subdivision shall not be required to pay all due and owing taxes, interest, penalties, fees, and costs for any unsold tax liens prior to filing an action to foreclose the right to redeem and quiet title. A sale to the municipality for the best price offered in accordance with this subdivision is a valid tax lien certificate sale for purposes of Section 40-10-197(e)(1)(i). c. Prior to filing an action to foreclose the right to redeem and quiet title, the municipality must comply with the prefiling notice requirements of Section 40-10-197(c) in all respects, except as modified in this paragraph. The municipality shall provide two prefiling notices. The first notice must be sent at least 60 days and not more than 180 days before filing a tax lien foreclosure action. The second notice must be sent at least 30 days after sending the first notice and not more than 30 days before filing the tax lien foreclosure action. The first sentence of the statement set forth in Section 40-10-197(c)(3) to be included in each notice shall be modified to reflect the applicable time frame required by this paragraph. (b) All tax liens that remain unsold by the tax lien auction or sale shall be included in all future tax lien auctions or sales until sold. (c) Any tax lien that does not sell at auction shall be reported to the county commission when seeking approval of errors in assessments, litigation, or insolvents as the tax collecting official shall be allowed credit for taxes due to this state upon final settlement with the Comptroller.