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Why a Quiet Title Action After a Tax Deed Auction?

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Title insurance companies require a purchaser of properties at a tax deed sale to file a quiet title action prior to insuring a title. A common inquiry from prospective clients seeking a quiet title after purchasing a tax deed sale is why? The answer is relatively straightforward, but prior to explaining why, it may be beneficial to understand the tax deed process in Florida.

Florida’s Tax Deed Process

Florida utilizes a nonjudicial tax deed process, which means that a court case won’t be filed. instead, the county holds a tax certificate auction if taxes on a property become delinquent. The auction is held to purchase the tax deed certificate and the county is paid the outstanding tax obligation.

The winning bidder at the auction pays the county and holds the tax certificate with interest accruing. It is important to note that the property is not sold at this point, just the obligation. The tax certificate becomes a lien against the property superior to nearly any other lien recorded.

After two years, the holder of the tax deed certificate can apply with the county to put the property up for auction to redeem the amount owed. There are, of course, certain notice requirements that need to be completed to notify the titleholder. Then, an advertisement is published in the newspaper disclosing the properties being auctioned, as well as the location and date of the auction.

Quiet Title Action in Florida

The highest bidder at the auction will own the property free and clear of other liens if the bid is high enough to cover the outstanding tax obligation. If the bid amount is insufficient, then the certificate holder obtains title to the property.

The title insurance companies require the winning bidder to quiet the title because a court order hasn’t cleared any other liens that may have been filed against the property. A quiet title action is not typically required after a foreclosure sale because foreclosures in Florida need to follow a judicial process. A judge executes a final judgment ordering or declaring that any inferior liens no longer have any rights to the property.

A quiet title after a tax deed sale is also required to ensure that the proper notice requirements were made to the owner of the property that originally failed to pay the taxes. Again, in a foreclosure the property owner is served with paperwork and has the right to defend the case in court. The key reason a title company requires a quiet title action to be filed after a tax deed sale but does not require a quiet title after a foreclosure auction is because of the different processes each have.

If you are interested in obtaining any information about quiet titles or are seeking to file a quiet title action, contact Powell, Jackman, Stevens & Ricciardi, P.A. today. Our knowledgeable real estate legal specialists have over 70 years of collective legal experience and the resources to effectively represent clients in a variety of legal matters.

Contact Powell, Jackman, Stevens & Ricciardi, (239) 970-6844 to schedule a free consultation.

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