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> With $120,000 owed in back taxes due by you upon purchase. How does it work in the US? Are taxes on the property itself? This feels weird. I would have thoug

> With $120,000 owed in back taxes due by you upon purchase. How does it work in the US? Are taxes on the property itself? This feels weird. I would have thought that the property can only be sold if everything is OK with it (no litigation, liens, etc), and taxes are owed by persons? Is it different over there?

dcrazy 4mo ago
It’s called a tax sale. The delinquent tax was assessed on the value of the ”improved property”.
1-more 4mo ago
> the property can only be sold if everything is OK with it (no litigation, liens, etc), and taxes are owed by persons? Is it different over there? This could vary by jurisdiction, but as I understand it, taxes and liens are attached to the property itself. "Clean title" can be a contingency of offer: buyer can back out and get back their earnest money (aka deposit) if the property has liens/encumbrances that are not written down in the sales contract (example clause at the link at the end). When you buy the place, you get title insurance, often mandated by your mortgage lender. The title insurance company does a title search on the property to find liens and owed money on the property and then sells you an insurance policy saying that they'll make it right if they missed anything during their search. This is because your mortgage lender never wants to be second in line to get their hands on the property to recoup in case you default on your mortgage. Liens on the property should be easy to find because they're supposed to be registered with the local municipality: maybe the city you're in, maybe the county, maybe the state, idk I think it depends. In practice, maybe some roofer/plumber/landscaper forgot to do that and now you have a problem you didn't know you had. That's what the insurance is for. The property _status_ is not knowable so much as the _status transitions_ are knowable: when was a lien attached or removed from the property, so that's why it involves a private company looking it up. You'd think it'd be a public good, but it's not. Odd. As an example: when I bought my current place, the previous owner was financing the furnace which included free annual service from the installer. He wanted us to take over the payments. We asked him to convey without encumbrances, meaning pay off the balance with the furnace company before we'd close on the house. If he had refused, we could have backed out of the sale because our offer said that we were only willing to buy without owing anyone anything. https://www.lawinsider.com/clause/title-contingency https://www.lawinsider.com/clause/title-contingency
- HeyLaughingBoy 4mo ago
  As an aside, I'm told that Title companies make absolute bank. Most buyers get title insurance, but the insurer very rarely ever has to make a payment.
  - pwg 4mo ago
    > Most buyers get title insurance, This is because all lenders require title insurance as a requirement for receiving the loan monies. So for almost all buyers they have no choice, their bank/credit union that is actually putting up most of the money forces it upon them.
    - HeyLaughingBoy 4mo ago
      Not all buyers are using loans. First house I sold was to someone who refused title insurance because in his words, "that house has been sold 3 times in 10 years, the title's fine."
      - 1-more 4mo ago
        I swear I heard this same story elsewhere online. Maybe it was here in another thread.
- sfn42 4mo ago
  > In practice, maybe some roofer/plumber/landscaper forgot to do that and now you have a problem you didn't know you had Seems to me like this should be the contractor's problem. If they did the job 2 weeks ago fine, but if they come along 6+ months later after the house is sold demanding payment from the new owner that seems ridiculous to me. Surely if these Liens are supposed to be public there needs to be a requirement that they are registered as soon as possible. Otherwise it seems to me like this is a ripe opportunity for scams. Buy house, have contractors refurbish it, sell it for a much higher value, then the contractors register their debts and now the new buyers or their insurance is on the hook for the refurbishment.
deleted 4mo ago
[deleted]
Scubabear68 4mo ago
Very commonly in the U.S. are liabilities that "run with the land", not the owner. This is done intentionally. Easements can be a huge headache too e.g. some utility may have an easement to come on your property at any time and do a whole list of activities to maintain a pipeline, or power line, or what have you.
- chasd00 4mo ago
  yeah I had a neighbor spend a lot of time and money planting flowers only to have the city destroy all of it when it was time for new utilities heh. You need to know about easements. I find mineral rights interesting. You can own some land, say 20 acres, and then discover something valuable under it like oil but then it turns out the rights to that oil are owned by someone else. Further the owner of those mineral rights can drill on the surface of the land, which you own, without your permission.
  - jjav 4mo ago
    > Further the owner of those mineral rights can drill on the surface of the land, which you own, without your permission. The oligarchs always win.
dlcarrier 4mo ago
It varies by state and sometimes even county. Sometimes you buy the property outright (a deed), sometimes you buy the debt (a lien), so the original owner pays you back with interest but they keep the property unless you foreclose, and sometimes you buy the right to the land if the original owner doesn't pay you back within a set time frame. (a redemption deed) Here's a general map of how it works, by state: https://www.secretsoftaxlieninvesting.com/tax-sale-map https://www.secretsoftaxlieninvesting.com/tax-sale-map In general, when it's sold as a deed, and sometimes as a redemption deed, non-government liens on the property are forfeit, and it clears out the taxes owed by the government entity selling it, but it doesn't clear out other government liens, e.g. when a property is sold to pay county property tax, the federal government could have a lien on it for income tax owed by the same owner, and the county could have a lien on it for sidewalk repair, and a mortgage company could have a lien for a loan. The mortgage company would be unable to collect anything, the federal tax lien would likely allow the government to force you to sell it to them for what you paid for it, but they wouldn't be entitled to collect from you, because it's the previous owner who pays taxes, but you could still be required to pay the county lien for sidewalk, plus penalties accrued since the previous owners non payment started, because you now own that property and its sidewalk.

dcrazy 4mo ago

It’s called a tax sale. The delinquent tax was assessed on the value of the ”improved property”.

1-more 4mo ago

> the property can only be sold if everything is OK with it (no litigation, liens, etc), and taxes are owed by persons? Is it different over there? This could vary by jurisdiction, but as I understand it, taxes and liens are attached to the property itself. "Clean title" can be a contingency of offer: buyer can back out and get back their earnest money (aka deposit) if the property has liens/encumbrances that are not written down in the sales contract (example clause at the link at the end). When you buy the place, you get title insurance, often mandated by your mortgage lender. The title insurance company does a title search on the property to find liens and owed money on the property and then sells you an insurance policy saying that they'll make it right if they missed anything during their search. This is because your mortgage lender never wants to be second in line to get their hands on the property to recoup in case you default on your mortgage. Liens on the property should be easy to find because they're supposed to be registered with the local municipality: maybe the city you're in, maybe the county, maybe the state, idk I think it depends. In practice, maybe some roofer/plumber/landscaper forgot to do that and now you have a problem you didn't know you had. That's what the insurance is for. The property _status_ is not knowable so much as the _status transitions_ are knowable: when was a lien attached or removed from the property, so that's why it involves a private company looking it up. You'd think it'd be a public good, but it's not. Odd. As an example: when I bought my current place, the previous owner was financing the furnace which included free annual service from the installer. He wanted us to take over the payments. We asked him to convey without encumbrances, meaning pay off the balance with the furnace company before we'd close on the house. If he had refused, we could have backed out of the sale because our offer said that we were only willing to buy without owing anyone anything. https://www.lawinsider.com/clause/title-contingency https://www.lawinsider.com/clause/title-contingency

HeyLaughingBoy 4mo ago
As an aside, I'm told that Title companies make absolute bank. Most buyers get title insurance, but the insurer very rarely ever has to make a payment.
- pwg 4mo ago
  > Most buyers get title insurance, This is because all lenders require title insurance as a requirement for receiving the loan monies. So for almost all buyers they have no choice, their bank/credit union that is actually putting up most of the money forces it upon them.
  - HeyLaughingBoy 4mo ago
    Not all buyers are using loans. First house I sold was to someone who refused title insurance because in his words, "that house has been sold 3 times in 10 years, the title's fine."
    - 1-more 4mo ago
      I swear I heard this same story elsewhere online. Maybe it was here in another thread.
sfn42 4mo ago
> In practice, maybe some roofer/plumber/landscaper forgot to do that and now you have a problem you didn't know you had Seems to me like this should be the contractor's problem. If they did the job 2 weeks ago fine, but if they come along 6+ months later after the house is sold demanding payment from the new owner that seems ridiculous to me. Surely if these Liens are supposed to be public there needs to be a requirement that they are registered as soon as possible. Otherwise it seems to me like this is a ripe opportunity for scams. Buy house, have contractors refurbish it, sell it for a much higher value, then the contractors register their debts and now the new buyers or their insurance is on the hook for the refurbishment.

deleted 4mo ago

[deleted]

Scubabear68 4mo ago

Very commonly in the U.S. are liabilities that "run with the land", not the owner. This is done intentionally. Easements can be a huge headache too e.g. some utility may have an easement to come on your property at any time and do a whole list of activities to maintain a pipeline, or power line, or what have you.

chasd00 4mo ago
yeah I had a neighbor spend a lot of time and money planting flowers only to have the city destroy all of it when it was time for new utilities heh. You need to know about easements. I find mineral rights interesting. You can own some land, say 20 acres, and then discover something valuable under it like oil but then it turns out the rights to that oil are owned by someone else. Further the owner of those mineral rights can drill on the surface of the land, which you own, without your permission.
- jjav 4mo ago
  > Further the owner of those mineral rights can drill on the surface of the land, which you own, without your permission. The oligarchs always win.

dlcarrier 4mo ago

It varies by state and sometimes even county. Sometimes you buy the property outright (a deed), sometimes you buy the debt (a lien), so the original owner pays you back with interest but they keep the property unless you foreclose, and sometimes you buy the right to the land if the original owner doesn't pay you back within a set time frame. (a redemption deed) Here's a general map of how it works, by state: https://www.secretsoftaxlieninvesting.com/tax-sale-map https://www.secretsoftaxlieninvesting.com/tax-sale-map In general, when it's sold as a deed, and sometimes as a redemption deed, non-government liens on the property are forfeit, and it clears out the taxes owed by the government entity selling it, but it doesn't clear out other government liens, e.g. when a property is sold to pay county property tax, the federal government could have a lien on it for income tax owed by the same owner, and the county could have a lien on it for sidewalk repair, and a mortgage company could have a lien for a loan. The mortgage company would be unable to collect anything, the federal tax lien would likely allow the government to force you to sell it to them for what you paid for it, but they wouldn't be entitled to collect from you, because it's the previous owner who pays taxes, but you could still be required to pay the county lien for sidewalk, plus penalties accrued since the previous owners non payment started, because you now own that property and its sidewalk.