In Indiana, real estate may be sold at a “tax sale” if the owner fails to pay real property taxes. Similar to a sheriff’s sale, a tax sale is an auction and prospective buyers bid on a property, hoping it will be a profitable investment. While each county has its own tax sale procedure, all counties are required by statute to give real estate owners proper notice of the auction. Failure to do so can have negative consequences for unsuspecting good-faith buyers. A recent example is the Court of Appeals’ decision in Indiana Land Tr. Co. v. XL Inv. Properties, LLC.
In Indiana Land, the Court held the county auditor’s failure to take additional steps to provide notice of the tax sale to the real estate owner violated his constitutional due process rights. Specifically, the Court found the auditor took minimal steps to locate a real estate owner and that a simple search in a different records system would have yielded the correct mailing address. As a result of the Court’s decision, the sale of the real estate and subsequent actions taken by the good-faith buyer, including a statutory one-year waiting period and numerous expenses, were negated and the property was reverted to the previous owner.
If you plan to engage in real estate “tax sale” auctions, Indiana Land highlights the importance of consulting with competent legal counsel to review each step of the tax sale process. The 2019 tax sale for Vanderburgh County will be held on Friday, August 23, 2019 at 9:30 a.m. The tax sale for Warrick County will be held from October 11, 2019, at 9:00 a.m. through October 16, 2019, at 1:00 p.m.
About the Author
Matthew D. Malcolm, an attorney at Kahn, Dees, Donovan & Kahn, LLP, in Evansville, Indiana, practices business law, tax law, real estate law, economic development law, creditors’ rights law, bankruptcy law, and debt collection law in the State of Indiana. Focusing on results, he is interested in meeting each client’s needs and providing quality counsel. Matt blends his business background with his legal knowledge. In doing so, he provides legal analysis and counsels his clients on the business and financial implications of a client’s legal options.