On July 3, 2012, the Missouri Supreme Court released two opinions that clarify the procedure by which purchasers of tax certificates at the annual August sales may obtain deeds to the tax-delinquent property. Both cases illuminate section 140.405 of the Revised Statutes of Missouri with respect to the content and timing of notices (“redemption notices”) required to be sent to the delinquent taxpayer (and others, such as lienholders) so that the tax sale purchaser can obtain a deed to the property for which the purchaser has paid the delinquent taxes and received a “certificate of purchase” which I refer to here as a tax certificate. These new decisions apply to first-year sales and second-year sales, not third-year sales, which have different redemption rules.
Redemption notices must be sent at least 90 days before August anniversary of sale
Harpagon MO, LLC v. Bosch overrules portions of several recent decisions of the Courts of Appeal for Eastern and Western Missouri, indicating definitively that the redemption notice sent by tax certificate purchasers at 1st sales and 2nd sales must be sent at least 90 days before the one-year anniversary of the sale. This holding, based on specific statutory language, is contrary to the printed advice given by some county collectors.
For example, the Stone County Collector’s instructions recommend mailing the redemption notices between June 1 and August 1 in the year following the sale, held by statute on the fourth Monday of August. The instructions also state that the title search may not be dated more than 90 days before the date (one year after the sale) that the tax certificate purchaser is allowed to apply for a collector’s deed and that the collectors cannot make exceptions. Under this new decision, the last date to send the redemption notice would be 90 days before the anniversary of the prior year’s sale on the fourth Monday in August–in other words, before the last week of May.
In fairness to county collectors, I should state that at least in the counties of Southwest Missouri where I practice, the customary interpretation of the 90-day redemption period is that it was triggered by the sending of the redemption notice, as affirmed by several appellate court opinions. However, in the Harpagon and Sneil decisions, the Supreme Court specifically rejected this custom, indicating that the court had “grave reservations about the implications of vesting a tax sale purchaser with the authority to set the deadline for a landowner to act to save that owner’s own property by something as subjective and uncertain as the date the purchaser decides to put in a letter.”
The content of the redemption notices need not be elaborate
Sneil, LLC v. Tybe Learning Center erases the claim that the redemption notice must tell the delinquent owner (and others entitled to receive it) of the time period in which they must redeem or lose all interest in the property. The Supreme Court’s summary states that the redemption notice must tell the recipient of the right to redeem, but:
The notice need not inform the owner of the procedures for redeeming the property or the time frame within which he must do so. If the purchaser chooses to provide notice of the date by which the owner must redeem the property, however, the purchaser must provide the correct date or risk violating the owner’s due process rights.
What if the holder of a collector’s deed didn’t give the redemption notice 90 days before the anniversary of the August sale?
This category probably includes a large chunk of those who obtained property with collector’s deeds. One who is eligible to apply for a collector’s deed must do so within two years of the purchase of the tax certificate. Fortunately for them (and their sweating and swearing lawyers), the right of a property owner to challenge a collector’s deed expires three years after the date of the recording of the collector’s deed, according to section 140.590 RSMo.
But what about those who purchased at the August 2011 sale, who followed the collector’s suggestions and didn’t send the redemption notices before the last week of May? Will the collector issue the deed anyway or simply tell the purchaser that his money has been thrown away? The purchaser of the tax certificate doesn’t get a second chance to send the redemption notice once the 90-day period in advance of the August anniversary has passed.
How did the Missouri Supreme Court do?
In these decisions the court unanimously resolved some important questions affecting property rights, protecting owners of tax-delinquent properties from forfeiting their property without due process, without placing purchasers of tax certificates in the position of giving legal advice to the recipients of redemption notices. The decisions are written clearly and are based on strict interpretation of statutes. Sneil contains a nice summary of how the procedure of tax sales and issuance of collector’s deeds is supposed to work.
In addition, these decisions point out that appellate courts and the public have been faced with trying to understand statutes that have been tweaked by the legislature dozens of times, probably in response to complaints from (a) persons who lost their properties and (b) county collectors seeking relief from angry and confused citizens. In addition, some of the legislative tweaks have been in response to appellate court decisions.
I wish these decisions would have come down several years ago, before so much expense went into all the past lower court decisions that have now been overruled and before I advised clients to follow the collectors’ instructions.
Ozarks Law & Economy 
I purchased a tax certificate at our county tax sale auction in Aug 2012. The County Collector told me the day of the sale that she herself would take care of sending out notices at the 90-day period, checking for liens and notifying the previous owner what was going on, etc. My one-year waiting period is now up, and the lady who NOW works in the Collectors office has told me that I was supposed to send those out myself … (!!), although sadly she was unable to answer most of my questions and I will have to call back to speak with someone else soon. Are there some counties or individual collectors who do this paperwork, notification, and lien-checking themselves, or what in the world happened? Should I be extremely worried at this point?! Because I am …! Not to mention upset that I was mislead as to my responsibilities in this process.
Ashlee,
While county officials in Missouri operate under the same statutes, interpretations of those statutes is far from uniform. Nor do courts always interpret Missouri statutes uniformly. Situations arise that are not described in statutes.
I’m sorry that you feel that were misled. Experienced real estate attorneys would have given you better advice in this situation.
I have a collectors deed now from a sale that occurred August 2012. My title company says it is a clear title, but they won’t issue me any title insurance on it. I want to take down the old junk house that is their and build a new one. However, If a bank won’t back me without title insurance I’m not sure I’m going to invest anything in this lot. I’m afraid I bought a junk title, paid the title company for nothing, and jumped through the loops the way the collector told me. What are my rights on this property? Seems like the only right I have is to mow it.
Jason and Lora,
Nobody should buy property at a tax sale without understanding that title insurance and loans will not be available without a successful quiet title suit.
You paid the title company for a report that showed you who was entitled to notice of your application for a collector’s deed.
When people contact me before purchasing at a tax sale, I explain the challenges that you now face, so that they can make an informed decision.
I think this article was informative, as I’m currently between the title search requirement and redemption notices. You state that the notices do not need to elaborate. Can you direct me to where I could find a ‘template’ or ‘sample’ notice that I might use as a guide?
Kevin,
I don’t know the location of any template. As I lawyer, I would read the statute and the various court cases that have discussed the content of the notices. Each time that I’m asked to prepare notices, I have to review the statute, which is frequently amended, and the decisions of appellate courts that interpret the statute.
Could you please tell me what amounts need to be paid in order to redeem a tax certificate besides the back taxes, interest and costs? If there had been a “surplus” amount paid by the purchaser is the owner also responsible to pay that before redemption? If the purchaser has completed a title search, does the owner also need to pay for that? Finally, is this process affected by the death of the owner before the tax certificate has been redeemed? Thank you.
Assuming you’re in Missouri, the redemption statute (section 140.340 RSMO) says “full amount of the purchase price.” I would check with the collector to see if the collector interprets this as including a surplus amount.
Regarding this and other issues, you need to consult with a real estate attorney in your community.
When you buy property at tax auction when can you go on property?
Whitney, if you’re asking about Missouri property, and all you have is a certificate of purchase, you have no right to go on the property. Once you get a collector’s deed, you have the right of possession.
Hello i purchased a house in the aug 2015 sale . i now have a court administrators deed in my name. A title company said it has a deed of trust from countrywide from 2007 and it was sold twice and is now with federal home mortgage corporation apoinnted in 2011 . its now feb 29th . i just recieved the court administrators deed .. Whats next ???
Oh snd im in kansas city missouri jackson county . can you help ?
Steven, you need to get a lawyer in the Kansas City area. You will need to get a title report and send out redemption notices no later than mid-May. The lawyer can assist you with determining who is entitled to receive the redemption notices and the manner in which they are delivered.
Can you tell me if a third year over the counter sale does the collectors deed wipe out any special assessments such as lien for demolition by the city or mowing assessments or federal tax liens
Hello, I am thinking about buying from a tax sale. What types of liens will I need to pay? For example IRS liens. What is the estimate cost for a quite title? How much do you charge to send the notices out? I am looking at St. Charles, St. Louis, Warrenton, or down south. Thank you.
HI, I have purchased a property thru tax sale in St.francois county missouri. I have filed for a title search. when that comes back and I have the names and addresses for the people with interest in it, I will then send a certified letter and a first class letter to them stating what is required law statute. I have done some research and found that the 2 owners that are listed on the tax sale are now deceased. What would be my next step?
My practice is to make an attempt to identify persons who are likely to be heirs and to send redemption notices to them. I usually find them listed in obituaries, which I find online. When it comes time to file a quiet title suit, after the collector’s deed is issued, the court can be asked to determine the identity of the heirs, which helps to make the title stronger. Sometimes you can obtain quitclaim deeds from these heirs.
We received a Collectors Deed for 2 narrow strips abutting our lake property in 1998. Put the property up for sale in 2016, only to find out the title company would not insure those strips with just the collectors deed. We were told we had to file a Quiet Title suit. We did. No objections or claims, so judge ruled in our favor about 50 days later. Now insurer says we must wait another full year before they will insure the property! Is that a State law, or an the in
Surers policy?
The title insurers make some of their own rules. However, this rule is based on Missouri law, which allows judgments to be set aside for one year, if the person asking for the judgment to be set aside can show that he would have had a meritorious defense and provide some excuse for not having responded in the quiet title suit.
Harry, We purchased a parcel at the 3rd tax sale & attempted to notify the owner of record to the letter of the statute & was issued a Collector’s Deed after the required redemption period (90 days for 3rd tax sale). We heard that if you don’t pay an attorney for a suit to quiet title, that after 7 years you can now buid on it with title & lenders insurance? Is that true? Thank you!
Harry, We purchased a parcel at the 3rd tax sale & attempted to notify the owner of record to the letter of the statute & was issued a Collector’s Deed after the required redemption period (90 days for 3rd tax sale). We heard that if you don’t pay an attorney for a suit to quiet title, that after 7 years you can now buid on it with title & lenders insurance? Is that true? Thank you!
No liens were present when the title work was ran after our 3rd tax sale winning bid. Some friends that work at a local title company (unofficially) think that after 10 years of no further contention, that a lender might loan on the property without a Suit to Quiet Title? I read through the MO Statutes but couldn’t find it. Thanks!
Missouri statutes do not address this situation. It is up to a title insurance company to decide the conditions on which it will issue insurance. As for a title insurance commitment and you’ll get the answer. A real estate attorney can sometimes negotiate with the title insurance company to eliminate requirements or exceptions, once the commitment has been issued.
I purchased at a “Post 3rd Sale” (10 years back) in Stone County performed by a private auctioneer on June 25, 2021. The Stone County website indicated I would receive a “Collectors Deed” and the auctioneers website indicated I would receiver a “Quit Claim Deed”. Can you please clarify the difference? Is the procedure the same when filing a Quiet Title suit?
Also – I purchased this in an HOA / POA community. At what point am I responsible for paying the monthly HOA/ POA? And do I owe any of the back HOA/POA?
PS – I read the entire RSMO chapter 140 and I had a hard time understanding the chapters that seemed to contradict other chapters.
Thank you in advance.
A collector’s deed extinguishes most liens and encumbrances. A quitclaim deed provides no assurances of that the grantor owned the property and no warranty of title. You will need to obtain the services of an experienced real estate attorney to give you specific advice.
what about 140.590? It states that no on can challenge a collectors deed after three years. Does that make the title marketable?
Unfortunately, it doesn’t make your title marketable, because title insurance companies still won’t issue title insurance without a quiet title suit. The purpose of the quiet title suit is cure any defective notices given by the county collector and the party that obtained the collector’s deed. Because of the possibility that a person entitled to notice of redemption might be a minor or under a disability, title companies simply won’t accept the risk.