Caveat Emptor
Know before you bid: Florida Tax Deed insights
A series of articles helping prudent tax deed investors maximize profit through essential pre-sale research of Florida tax deeds before bidding at auction. Even though due diligence may not uncover everything, going into a sale unprepared is highly risky.
This article in our series looks at Special Considerations for Properties that are part of an Association. Condominimum associations, Homeowner’s associations, and Property owner’s assosications all can come into play in Florida property.
Even though Association liens for past due assessments are extinguished with the tax deed sale, you will be responsible for those dues and assessments accruing from the date of the sale forward, including possibly special assessments that are due postclosing for luti-year special assessments. Investors should factor ongoing assessments and potential special assessments into their maximum bid.
The declaration of condominium and/or HOA bylaws are sometimes recorded and can be very helpful in determining which restrictive covenants are actively in place. For example, many HOAs and Condo associations prohibit renting units within the first year or two of ownership.
There is a new potential issue regarding the Association liens that has not been litigated yet but is likely on the horizon based on Structural Integrity Reserve Studies (SIRS) and traditional reserve studies mandated in recent years.
- It is well settled the tax deed purchaser is not liable for any amounts incurred prior to the tax deed sale. The prior obligation is wiped out.
- For example, a lump sum fee or assessment, which was due prior to the tax deed sale.
- What is not so clear is how these associations will handle these new large scale Special Assessments, which are being assessed over multiple years.
- Usually these are recorded in the Official Records, so a prudent investor should be aware of them before the sale.
BE INFORMED and HAPPY BIDDING!
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You may also like other posts this series:
Considering the physical aspects of a property
Assessing publicly available records
And take a look at this post if you are buying Vacant Land:
Don’t Buy Vacant Land at Tax Deed Auction Before Reading This!