Who do I actually have to serve before the certificate turns into a deed?

Question

I have a certificate approaching the end of the redemption period and I'd rather not spend the money to get to a deed that a judge can undo.

Numbers: $6,800 all in with two years of subs, parcel assesses around $190,000, vacant single family in decent shape from the street. The title search I paid $325 for turns up an owner of record who died, no probate filed that I can find, a 2011 mortgage that was never released even though the balance looks paid, a municipal water lien, and an old judgment against someone with the same last name as the owner. An attorney quoted me $3,500 to $5,000 to take it through.

My question is the notice list. I get that the owner of record and the mortgage holder have to be served. What I can't work out is how far I have to chase the heirs of a dead owner with no probate, whether a mortgage that looks satisfied but was never released still has to be noticed, and what happens if I do everything the statute lists, get my deed, and an heir shows up in two years saying they were never told. Is the deed void, or is my exposure capped at losing the property and getting my money back? Those are wildly different outcomes for a $6,800 bet on a $190,000 house.

Rena Expert · Accepted Answer

Serve everyone with a recorded interest plus everyone you have reason to know holds an unrecorded one, and document the search that produced the list. The mortgage that was never released still gets notice. A satisfied-but-unreleased lien is a recorded interest until it's released of record, and guessing about the balance is not your call to make. The water lien holder is a municipality and usually gets served as a matter of course. The judgment against a similar name gets noticed too, because the cost of including a party who turns out to be irrelevant is one certified mailing, and the cost of omitting a real one is your deed.

The dead owner is the expensive part. With no probate, the interest passed to heirs by operation of law in most states, and those heirs are the parties whose due process rights matter. Courts have held that when mail comes back undelivered and you know it, publication alone can fall short of what's required, so skip tracing and address verification are the record you build to survive a later challenge. Whether that record is enough is a question for an attorney licensed in that state, and the notice statute, the redemption period, and the remedy for defective notice all differ by state.

On your last question, the outcomes in play range from a deed voided outright to a deed left standing with the omitted party allowed to redeem, and which applies is statutory. Ask your attorney to tell you the specific remedy in that state before you spend the $3,500. One more thing to price now: a valid deed is not marketable title to most title insurers for some period after issuance, so if your exit is a retail sale rather than a rental, add a quiet title action to the budget rather than treating it as a surprise.

luis_carrera · Answer

The piece I got stuck on when I read into this is that mailing to the last known address and having it come back undeliverable isn't necessarily the end of your obligation. There's a due process line of cases saying that once you know the notice didn't arrive, you're expected to take additional reasonable steps rather than shrug and publish in the newspaper. So the returned envelope is the trigger for more work, not proof that you did enough. Skip tracing an heir runs maybe $50 to $150 through the services I've priced.

jessreyes12 · Answer

The thing I'd have been too embarrassed to ask in person: doesn't the county do this for you in some places? I was reading about a state where the county files the foreclosure itself and the certificate holder just pays a fee and waits for a deed. Is that a real thing or did I misread a county website that was describing the deed sale process instead?

aaron_fitz10 · Answer

compass, it's real in some judicial-foreclosure states, but you're still paying the fees and the attorney is still the county's, not yours.

jordan_ellis2 · Answer

The quiet title cost is what changed my model most after six months of reading. Every attorney I've called quotes $2,500 to $6,000 depending on how many parties need serving, and two of them said their local title underwriters won't insure a tax deed for a period after issuance regardless of how clean the notice file looks. On keystone's numbers that's fine, $5,000 of legal work against a $190,000 parcel. On the $12,000 parcels I was originally excited about, the legal cost is most of the deal and I'd basically be buying a lawsuit.

gregpowell66 · Answer

Nobody's mentioned the house. Vacant single family for two years with the water off means I'd assume a failed roof penetration somewhere and possible freeze damage in the supply lines, and you can't get inside to check until you have a deed and a right to possession, which is a separate step from title in most states. I've walked into vacant properties that looked fine from the curb and found $40,000 of interior work.

Also if an heir has been sleeping there some of the winter, you're looking at an ejectment or eviction process on top of the quiet title, and that clock runs on the court's schedule. Your $6,800 could be $6,800 plus $5,000 legal plus a year of holding before you can even scope the repair.

Who do I actually have to serve before the certificate turns into a deed?

6 replies