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.