ALL ABOUT MARYLAND TAX SALES
The Process in General
In Maryland, when property taxes or other municipal liens on a property are unpaid each county "sells" the property to the highest bidder and issues a "tax sale certificate." The bidder must pay the back taxes or liens at the time of the sale, along with a "high bid premium" if the bid is above a certin percentage of the assessed value. The high bid premium is deposited with the municipality, does not gain interest, and is credited toward the bid purchase price should the tax sale holder complete a tax sale foreclosure before an interested party makes a redemption of the delinquent taxes. The premium is refunded if a redemption is made.
Foreclosing on the Tax Sale
Recent changes to Maryland's tax sale laws have added further notice requirements to the already very technical tax sale foreclosure process. In general, a tax sale foreclosure cannot be filed until six months after the tax sale auction, and until two months after special notices are mailed via regular and certified mail to the property owner and mortgage lenders of record. Once the foreclosure is filed it takes 6 months to a year to complete all of the service and notice requirements, obtain a tax sale judgment, and then obtain a deed for the property from the municipality. At any time before judgment, any interested party may make a redemption of the tax sale.
Did You Know?
- If you do not get personal service on all of the Defendants, you may not be able to get insurable title to the property, even though you have a Deed from the municipality. In other words, you own it but you can't sell it.
- If there are any technical mistakes in the case, an interested party could come back years later and strike your judgment and your Deed.
- The tenant or occupant of the property is entitled to notice, even though they do not own the property, and also has a right to redeem the delinquent taxes.
- Maryland law "caps" the maximum amount of attorney fees and costs that a tax sale holder can charge to the property owner upon redemption.
- The municipality often makes mistakes in the tax sale process that could invalidate your tax sale lien, even after you have filed your foreclosure, which means that you have to "eat" all of the court costs, attorney fees, etc., that you have expended, and only get your principal back.