Mortgagees: Don’t Lose Collateral — Take Action To Ensure You Receive Notice Of Pending Tax Deed Sales

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Summary: Mortgagees and other lienholders whose proper address does not appear in a recorded mortgage or lien may not receive notice of a pending tax deed sale and may therefore lose collateral. A recent Florida court held that the clerk of the court does not have a duty to locate the mortgagee or lienholder if they fail to provide notice of their proper address. Mortgagees and lienholders should take affirmative action to notify the proper authorities of their correct addresses. Mortgagees and lienholders, particularly those who acquired their interest through merger, assignment or otherwise, are advised to provide notice to the county tax assessor, tax collector, and clerk of the court, to ensure they receive notices of tax deed sales.

County tax collectors are authorized to sell tax certificates on real property to collect unpaid ad valorem real property taxes. A certificate holder can later apply for a tax deed, which triggers notice requirements to both the property owner and interested parties whose lien rights in the property may be adversely affected by the tax deed sale. This is because a properly conducted and noticed tax deed sale results in the successful purchaser receiving title to property free and clear of any previously recorded lien (except for a lien of record held by a municipal or county governmental unit, special district or community development district).

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