A delinquent tax sale is a last resort effort made by a city or county to collect past due property taxes. In Tennessee, counties may sell properties at public auction to collect taxes owed if the property owner fails to pay them the reasonable amount of time. Anyone wishing to purchase a tax sale property must meet certain requirements set forth by Tennessee law and each county’s tax sale policies.
Before an Auction
The city or county in which a tax delinquent property is located usually advertises an upcoming tax sale one to three weeks before an auction is set to take place. The cost of tax sale preparation, including advertising fees and all court and legal costs become a lien against the property. It is a potential buyer’s responsibility to locate the property, assess its condition and research its title prior to placing a bid.
The county offers no warranty as to the condition, use, location or other any other aspect of the property. The delinquent taxpayer may stop the proceedings at any time prior to the auction of the property by paying the tax due and any expenses incurred by the county while preparing for the tax sale.
Bidding at Auction
Some Tennessee counties require that a bidder be present to participate in a tax sale. Others may allow another individual to place a bid on the purchaser’s behalf if informed beforehand. Contact the county in which the property is located to inquire about its bidding policy and determine whether you need to complete a buyer registration form if interested in purchasing a tax sale property.
The Opening Bid
A tax sale property’s opening bid must meet the delinquent property tax, all other city or county liens against the property and any accrued penalties, interest, court costs and attorneys' fees.
Purchaser's Responsibility after the Sale
All property tax sales are final. Accepted payment methods and full payment due dates vary by county. Failure to pay the full balance due on the property within the required time period may result in added interest or legal action.
The purchaser won't receive the deed to the property until the previous owner’s one year right of redemption has expired. If a delinquent taxpayer redeems the property, the winning bidder will receive a refund of the purchase price plus 10 percent interest.
Upon receiving a signed decree confirming the sale of the property after the right of redemption has expired, it is up to the purchaser to contact the Clerk of Court to request the deed and record it with the Register of Deeds office. The county may include the property in another tax sale if a buyer fails to record the deed.
Right of Redemption
A delinquent taxpayer, his heirs and any creditors holding a lien against a property have one year from the date the Chancellor signs an order confirming the sale to redeem a property sold at a tax sale auction by paying the winning bid amount plus 10 percent interest to the court. The redeeming party must hold equitable or legal interest in the property.
Tax Sale Property Re-bids
Anyone may increase the last bid placed on a tax sale property within 10 days of auction’s close provided the new bid is at least 10 percent higher than the last bid. The county may schedule a second auction for a re-bid property to take place within 30 days of the first one.
When a Property Doesn't Sell
If a tax delinquent property doesn't sell at auction, the county must hold the property until the taxpayer's right of redemption expires.
- Knox County, TN: Tax Sale
- Tennessee Trustee: Frequently Asked Questions
- Bristol, Tennessee: Delinquent Tax Sale
- Chancery Court Clerk & Master: Delinquent Tax Sale Information
- Plumas County California. "FAQs - Tax Sale." Accessed Sept. 27, 2020.
- Leon County, Clerk of the Circuit Court and Comptroller. "A Guide to Tax Deeds." Accessed Sept. 27, 2020.
- California State Controller. "County Tax Collectors’ Reference Manual - Chapter 8000: Sale of Tax-Defaulted Property." Pages 52 and 53. Accessed Sept. 27, 2020.
- Texas Constitution and Statutes. "Title 1. Property Tax Code. Subtitle E. Collections and Delinquency. Chapter 34. Tax Sales and Redemption. Subchapter A. Tax Sales." Accessed Sept. 27, 2020.
- Justia. "O.C.G.A. 48-4-5 (2010) 48-4-5. Payment of excess." Accessed Sept. 27, 2020.
- Idaho Legislature. "Idaho Code Sec 63-1007. Redemption - Expiration of right." Accessed Sept. 27. 2020.
- Justia. "IA Code Sec 447.9 (2014): Notice of expiration of right of redemption - county right of redemption." Accessed Sept. 27, 2020.
Bree Johnson began writing professionally in 2004, penning articles for Internet SEO companies before breaking into copywriting in 2008. Since then, she has written ad copy for some of the world's most lucrative Halloween costume retailers, including Halloween Adventure and New York Costumes. Johnson majored in medical sonography at Forsyth Technical Community College and real estate while living in Myrtle Beach, S.C.