Navigating Tax Deeds in Florida: Risks and Legal Insights

Naomi Ayala

4 days ago2 min read

Acquiring real property at a Florida county tax deed auction offers an opportunity to purchase real estate at a fraction of its fair market value. However, this process is not without challenges and responsibilities. To make informed decisions, it’s wise to consult an attorney who specializes in tax deed purchases to help you navigate the complexities.

What Are Tax Deeds?

A tax deed is issued when a property owner fails to pay real estate taxes and related fees. The county tax collector auctions off the property to recover the unpaid taxes. While it may seem like a lucrative way to acquire property, there are critical factors to consider before purchasing.

Can You Resell a Property Acquired Through a Tax Deed Auction?

Reselling property bought at a tax deed auction isn’t as simple as it might appear. Titles obtained through tax deed sales are not automatically marketable. To sell the property, claims from previous owners and any remaining lienholders must first be resolved. Without a clear title and title insurance, finding a buyer willing to purchase the property will be extremely difficult.

Making a Tax Deed Title Marketable

Filing a Quiet Title Action

The most efficient way to make a tax deed title marketable is by filing a Quiet Title Action. Although most liens are extinguished at a tax deed sale, some claims can persist, particularly if proper notice of the sale wasn’t provided. A Quiet Title Action legally removes these issues—known as "clouds"—from the title, ensuring that previous owners or lienholders cannot make future claims. This step is crucial for obtaining title insurance, which is necessary for resale.

The Four-Year Waiting Option

Under Florida law, another approach is to hold the property for at least four years while paying all associated property taxes. After this period, the title may become marketable without a Quiet Title Action, provided the following conditions are met:

The tax deed has been recorded for over four years.
Taxes on the property were consistently paid by the tax deed holder during this time.
Proper notice of the tax deed sale was given to all required parties.
No legal challenges or claims against the property were recorded during the four-year period.

While this option avoids the need for court action, it requires patience and diligence to meet all requirements.

Ensuring Compliance with Tax Deed Requirements

Before purchasing a tax deed, it’s critical to verify compliance with legal and procedural requirements. An experienced real estate attorney can review the county tax deed file, conduct an independent title search, and identify any outstanding issues that may hinder marketability. This proactive evaluation increases the chances of obtaining title insurance and successfully reselling the property.

Key Considerations for Tax Deed Buyers

Investing in tax deeds can be rewarding, but it carries significant risks. Comprehensive research, due diligence, and the guidance of a qualified real estate attorney are essential to avoid potential pitfalls. Whether pursuing a Quiet Title Action or opting for the four-year statutory waiting period, careful planning is the key to a successful investment.

If you’re considering purchasing a tax deed in Florida, reach out to a knowledgeable real estate attorney for personalized advice and support.