When you purchase property, normally you would get title insurance. When you purchase property at a tax deed auction or a foreclosure auction, there is no title insurance. I know several situations where someone didn’t get what they bargained for because of easements.
My dad recently purchased a tax deed in Inverness, Florida. It’s a 40-acre parcel of land. After he purchased it, he realized that there is a conservation easement on the entire property. Evidently, a conservation organization bought the property at a tax deed auction a few years ago. Once they owned it, they granted a conservation easement to a different conservation organization that they are affiliated with. The following year, they didn’t pay the property taxes. The tax certificate goes up for auction and eventually Dad bought it at the foreclosure auction. The conservation easement survives the foreclosure auction.
Dad should’ve seen the easement before he purchased the property. It was just an oversight. The easement was in the legal description. The legal description said, “…subject to the conservation easement…”
Twenty years ago, my Dad told me a similar story of a student of his who bought property behind a Lowe’s Hardware store. After this person bought the property, he realized that Lowe’s had an easement on the entire property rendering the property fairly useless for anyone other than Lowe’s.
Often, when property is for sale in either a tax certificate auction or a tax deed auction, the owner is trying to get rid of the property. No one will buy the property in a regular sale, so the owner quits paying taxes. Eventually, the property is owned by someone else. That doesn’t mean you should never buy property in a tax deed auction. It means you should do careful research before you purchase it.
If you want to learn more about tax deeds, foreclosures, and a lot of other basic information about real estate, consider getting your real estate license. For information about real estate classes in Orlando, Florida, check out Demetree School of Real Estate.
Please note that Karen Climer has no affiliation with Climer School of Real Estate. Her father, Ron Climer, sold Climer School of Real Estate in 2014. It has since been involved in several mergers and acquisitions and is owned by a large investment company. Karen owns Demetree School of Real Estate in Orlando, Florida.
