How to File a Tax Deed Application

Filing the tax deed application (TDA) on a property is the first step in initiating tax lien foreclosure. If you plan to acquire the property or just collect interest, filing the TDA will begin the final process.

The county requires the lien is transferred into your name before you start the foreclosure process. The timeline for this can vary, but you can expedite the process by providing all the required documentation. When buying on the primary market, ask the county directly what they’ll need from you.

The Process of Initiating a Tax Deed Application

Once the lien is transferred into your name and is out of the redemption period, you can begin the Tax Deed Application. You will have to pay off active certificates to complete the foreclosure. Filing the TDA is beneficial because it triggers the interest rate to increase to 18% annually on the roll-up amount.

The next step in the TDA process is to pay any necessary fees. The TDA fee charged by most counties in an administrative foreclosure state will range from $200-$600. You will not acquire interest on any fees paid for the tax deed application. But the good news is that if you are redeemed on the lien, the county reimburses the fee.

tax deed application

After the Tax Deed Application is Filed

Once you complete the paperwork, the county will notify the property owner that an investor has applied for the tax deed. The property owner has time to pay off their back taxes, usually between 30-60 days. If the property owner decides to pay within that time, you will be redeemed on your investment. In addition, the amount paid to you includes all of the money you invested in the roll-up, fees, and any interest that you’ve accrued.

When the property owner does not pay within 30-60 days, the county schedules the property to go to the tax deed auction. The county charges a fee to schedule the auction and will range from $200-$600. Interest is not earned on the fee amount but will be reimbursed.

My Certificate is Going to Auction. What Do I Do?

At the tax deed auction, the minimum bid price starts at the amount invested to guarantee redemption for the tax lien investor. If the property does not get bid on at the auction, the county will transfer ownership. As a result, the tax lien investor has rights to the property and the opportunity to exercise their preferred exit strategy.

Filing a Tax Deed Application can seem complicated. But, understanding the fundamentals of the process is a surefire way to set yourself up for success.