Tax Sales – St. Louis County

If you are like many budding real estate investors, you are interested in purchasing properties via tax sales or tax liens. This can allow investors like yourself to purchase properties at large discounts, and our firm can help you navigate the complexities to help you get the property you want and deal with the title issues that often result.

There are actually two different processes for the sale of properties with unpaid taxes in Missouri. The City of St. Louis follows a judicial process under the Municipal Land Reutilization Law (“MLRL” – RSMo. 92.700, et. seq.). However, most counties in Missouri – including St. Louis, St. Charles, and Jefferson Counties, operate under the non-judicial formula prescribed by the Jones-Munger Act (RSMo. Chapter 140). Tax sales under the Jones-Munger Act occur on the fourth Monday of August each year and are held by the County Collector’s office. The Collector’s office will prepare a list of the properties with delinquent taxes to be sold at the auction, and this list will be published in a local newspaper for three consecutive weeks, starting about five weeks prior to the tax sale. The list can also be obtained at the Collector’s Office.

Properties being auctioned at tax sale can be auctioned up to three times (i.e., once per year for three years). If a property does not sell at the first auction, it will be re-auctioned a second time the following year, and if still not sold, it will be re-auctioned a third and final time the year after that. If it does not sell at that point, title to the property will revert to the County.

When a successful bidder pays for the property, the Collector will issue a Certificate of Purchase which will be recorded with the recorder of deeds. The Certificate of Purchase does not prove ownership or title to the property because the current owner still has a right to redeem the property by paying the taxes owed.

• If the investor successfully bids on the firstor second sale, the current owner has at least 12 months to redeem the property.
• If the investor successfully bids on the thirdand final sale, the current owner has only 90 days to redeem the property, provided the proper steps are taken.

In order to complete the process and receive a deed, the investor must provide Notice of the Right of Redemption by sending a certified letter to each party with an interest in the property. The letter must be sent no earlier than 90 days prior to the date the investor is eligible to receive a deed.  We strongly advise having an attorney help you identify the proper parties to receive notice and sending notice to them.

If a property is redeemed, the investor will receive a refund of their purchase price and allowed expenditures (e.g., the cost of the title report and certified mail). In addition, the investor will receive 10% annual interest on the delinquent tax portion of their bid (but no interest on the surplus portion of their bid).

If a property is not redeemed, the investor must apply for a Collector’s Deed by providing a copy of the title report, the Notice letters, and the certified mail receipts to the Collector’s office. Upon review and confirmation that the process was properly followed, the Collector will issue and record the Collector’s Deed.

Once you have a Collector’s deed to the property, you are considered the owner of that property, but that still does NOT mean you have clear title to the property. Most reputable title companies will not provide title insurance at this point due to concerns that this process might not have been perfected. These concerns are outside of the scope of this article, but we hope to provide additional information in future blog posts.

Investors might need to take additional steps in order to obtain clear title, obtain title insurance, and then be able to successfully sell the property at a profit. These options most often include a Quiet Title lawsuit, obtaining written releases from prior owners, or allowing the passage of ten years (the amount of time required to obtain adverse possession if certain requirements are met).

If you are wanting to invest in tax sales or need quiet title on a property, please reach out to us and take advantage of the flat fee pricing we can usually offer in this area.  Contact us today by clicking here, or by calling us directly at 314.862.2237.