The occupant improved the property during the redemption period and is now claiming a lien for those costs.

This one sits squarely in legal territory, so the first thing I'd say is: get a real estate attorney licensed in that state before you respond to the occupant or put anything in writing. What I can do is lay out the vocabulary so the conversation with that attorney is useful rather than confusing.

A few terms to anchor this:

Redemption period means the window after a tax deed sale where the original owner can pay what's owed and reclaim the property. In a two-year state, that window runs 24 months.

Equitable contribution / unjust enrichment is a legal theory where someone argues that you benefited from something they paid for, and a court should make you compensate them even if no contract exists. It doesn't automatically win, but it isn't frivolous either.

Title policy is insurance you buy at closing that pays out if someone later makes a claim against your ownership. The critical question your attorney will ask is what that policy covers. Many title policies stop at the moment the deed was recorded, meaning a claim that arose during the redemption period may fall outside the covered window entirely.

The permitted-versus-unpermitted distinction matters because an open permit creates a public record a judge can point to. A receipt alone is easier to dispute.

The state's post-foreclosure occupant rights statute is the controlling document here, and it varies significantly. Some states give occupants no recourse for improvements made after a tax deed sale is confirmed. Others leave more room.

Everything I've written is a starting point, not a legal conclusion. The answer turns on the specific statute, the title policy language, and whether that permit was closed.

What state did this happen in? That would help narrow down what others here have seen.

The checklist a careful operator runs starts before the auction, not after the deed arrives. Confirm whether the state's occupant rights statute creates any lien right for improvements made during redemption, because a handful of states do give occupants a subrogation-style claim and the auction catalog will not tell you that. Pull the permit record for the property going back at least three years, because if the occupant had a pattern of permitted work, month fourteen starts looking less like a goodbye renovation and more like a documented improvement claim with inspection sign-offs attached. Verify that your title policy extends to post-issuance occupant claims and not just chains of title defects existing at the moment of recording, since most standard deed policies stop exactly there and an endorsement covering post-foreclosure possessory claims costs real money to add but costs more to discover you skipped. Run the unjust enrichment exposure as a number before you spend anything on the property: if the roof added $14,000 in market value and the occupant paid $18,000 for it, a court weighing enrichment to you versus loss to them is working with $14,000 as the ceiling, which may be a negotiated exit rather than a litigation fight. The question I would want answered here is whether that roof permit is open or closed, because a closed final inspection means the work is in the public record as a completed improvement and that changes the posture considerably from an unverified invoice sitting on your doorstep.

Permitted work is the part that actually changes the calculus here. An open permit with a passed inspection is a public record, which means your title search should have surfaced it, and if it did not, that is a conversation with your title company not the occupant. I had a Burlington County lien I was tracking last fall where the property had a bathroom permit pulled mid-redemption and nobody flagged it in the preliminary chain. The standard title policies I have seen on deed purchases carve out "matters created or suffered by the insured after the policy date," which is useless language when the matter was created by the occupant before the deed issued. So you are sitting on a gap either way.

What I want to know is whether the occupant pulled that permit in their own name or the property address. Because if it is address-only, some contractors do that, the attachment theory gets murkier and an unjust enrichment argument gets harder to run when the claimant did not even formally own the improvement.