Hi Avani,
When it comes to private liens, I wouldn’t say most, I’d say all of them are extinguished by a county tax deed sale. Tax liens take priority over any lien created through private agreements, including mortgages, judgments, and mechanics' liens. This principle is rooted in the idea that public obligations, like taxes, override private contracts under common law.
That said, always run a thorough title search before bidding. Even though those private liens shouldn’t survive, some lienholders might still try to collect from you. It happens, I’ve dealt with this more than once. That’s why having a good real estate attorney on your side is key. As soon as they respond to these illegitimate claims, most lienholders back off, knowing they’d lose in court and could end up being responsible for your legal costs.
One thing to be careful about is utility bills. Some utility providers are private companies (like FPL), while others are municipal. If a municipal utility lien was recorded before the tax lien, it may survive the sale due to seniority. It’s rare, but it can happen, so it's another thing to check when researching the property.
Regarding governmental liens, yes, state and federal liens, including IRS liens, have priority over even municipal claims. But here’s the key point: if the IRS chooses to exercise its redemption right (which they rarely do due to budget limitations), they are required by law to reimburse you, the winning bidder, for the full amount you paid at the auction. So while IRS liens may look intimidating on paper, the actual risk to you as a bidder is very low.
Hope that clears it up and best of luck!
Yes, your understanding is correct:
Most private liens such as mortgages, judgment liens, and mechanic's liens are typically extinguished by a county tax deed sale.
However, governmental liens, including those imposed by the county, municipal government, or special taxing districts, usually survive a tax deed sale.
Important nuances:
Liens held directly by the county or city, such as code enforcement liens, municipal assessments, or special district charges, generally remain attached to the property after the sale.
Federal liens, such as IRS tax liens, have special redemption periods and rules, and in certain situations, can survive if the IRS isn't properly notified or the lien isn't properly discharged.
Always obtain a preliminary title search or lien search report before purchasing at a tax deed sale to ensure you fully understand any liens or assessments that will remain your responsibility post-sale.
Thank you so much. Just to confirm—does the HOA lien get wiped out?
Yes, Avani, absolutely. In Florida, all HOA liens, unpaid dues, interest, penalties, late fees, and even bad check charges are wiped out by the issuance of a Tax Deed. Once the Tax Deed is recorded, the HOA has no legal right to collect any amounts that were due prior to that date. You're only responsible for any new dues or assessments that come after the deed is issued.
That said, having dealt with HOAs for years, I can tell you, don’t be surprised if they try to come after you anyway. They may send letters, threats, or collection notices to scare you into paying something that legally you don’t owe. Stand firm. The law is on your side, and they know it. They’ll rarely escalate to court because they know they have no standing after a Tax Deed sale.
