Mississippi Tax Sales and Tax Liens

Today I want to pick back up on what is becoming a series on Mississippi real estate.  As indicated in Mississippi Probate and Real Estate, the issues of real estate and probate law are so intertwined that to be capable in one requires an understanding of the other.

Last week, I looked at the general topic of adverse possession in Mississippi and a Mississippi adverse possession case.  This week, I want to look at Mississippi’s tax sale statutes. There seems to be an increased interest in this topic at this time of year, in advance of the tax sales in August.  We will begin with a general overview of Mississippi tax liens and tax sales.  Tomorrow, we will take a look at a recent Mississippi tax lien case to see how tax sales play out in real life.

A tax sale occurs when there are overdue taxes on real estate. Mississippi tax sales are typically held the last Monday in August and are well-noticed in local newspapers.  At the tax sale, the taxes are auctioned by competitive bid using an overbid system. The successful bidder will pay the taxes due for the property.  That payment of taxes becomes a lien on the property in favor of the buyer.  The buyer is given a tax lien certificate to evidence his claim against the property.

The original owner has two years to “redeem” the property. Redemption occurs when the original owner pays the amount he owed plus any taxes since paid on the property and interest and fees that are charged by the court. If the original owner is unable to redeem the property, the buyer will be given a sales deed at the end of the two-year period.

Mississippi tax sales are fraught with technical formalities.  And since they are generally disfavored by the court, failure to comply with the formalities usually results in invalidation of the tax sale.  For example, one requirement is that, at the end of the redemption period, the county Chancery Clerk is required to send notice to the original owner that the final sale of the property will take place.[1] Under this statute, the sheriff must make service of notice, and notice must also be sent by registered or certified mail.  Failure to give proper notice could be grounds for invalidating the tax sale.


[1] Miss. Code Ann. § 27-43-3 (Supp. 2009).

 

Comments

  1. says

    There appears to be ample information concerning MS tax lien sales up to the point of purchase. However, there is extremely little info that covers the regulations after the sale. For instance, in my county, the tax dilenquent property is placed in the delinquent tax auction every year after the first buyer has purchased the lien. That means that 2-3 individuals will have tax liens against the same property. (I have such a “first time” lien. When I went to pay the taxes for the second year, I was not allowed to do so. Being informed that the property would again be placed in the dilenquent tax auction next year.) Is that typical??

    • Fred Winingham says

      I purchased a program from John Lane some time ago. “TAx Sales Lists” I live in New Orleans La. I am confused with the Question Billy Starling asked on Nov. 18, 2010. He paid the delinquent Taxes the first year but was not allowed to pay them the 2nd Year?? Could you explain. He was told it had to go back to Auction again??
      When youy bid on a piece of property, is it for just the amount of taxes Due??
      I would really appreciate your response.
      Thank you in advance FRED WININGHAM

      • Michael says

        In Mississippi, there can be subsequent tax lien purchasers, however the first person to purchase such a lien in Year 1 will have the right to a tax deed upon maturity.

    • says

      I reply to Bill Starling’s question and the follow-on comments by Fred Winingham and Michael. Although a number of other tax sale states operate under a statutory schemes which, in one form or another, afford a tax sale purchaser to pay any subsequent (“subs”) delinquent taxes arising on a property where he holds the tax sale for the prior tax year. In those states, as a general rule, the amounts paid on ‘subs’ are added to the total tax lien claim of that tax purchaser on that Property, with statutory interest accruing on the ‘subs’. However, Mississippi’s statutory scheme does NOT provide for such a process. Instead, any “subs’ on a property go right back to the tax sale.
      So, how does Mississippi work: Let’s say that on or about August 28, 2010 you attended the Jackson County, Mississippi and at became the highest and tax sale purchaser for 2009 delinquent taxes on Parcel A. (* As an aside – Keep in mind that in MS real estate ad valorem taxes are paid in arrears, therefore, when you buy at a 2010 tax sale, what you are actually bidding on and purchasers are, are delinquencies taxes for the 2009 tax year; but I digress). Anyway, if your tax sale has not been redeemed before the next tax sale; then chances are that the delinquent taxes on Parcel A for tax year 2010 will also appear and be auctioned at the August 28, 2011 tax sale; but you don’t have any right to just go in before the tax sale, pay that additional delinquent tax amount and simply have it added to your tax lien amount. You may even find yourself at a Mississippi tax sale and hear someone call out “sub” in an attempt to try an assert the existence of such a right; but I can assure you that no such statutory right exists in Mississippi. If and when your tax lien interest matures (which is very unlikely); then at that point, if you wish to protect your interest, and prevent it from maturing to purchaser(s) of subsequent taxes, you can effectuate a ‘redemption’ by simply paying the tax collector or chancery clerk the delinquent tax amounts due. But never do this before the property has in fact matured to and you are vested with tax title to the Property. T. Mitchell Kalom, Esq. M.B.A., JD, LL.M

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