The annual tax certificate sale is a public sale of tax liens on delinquent real property taxes. All procedures of this tax sale are in accordance with Florida Statutes. The site of this year’s tax sale is: http://duval.taxsale.com.
To participate in this sale you must register at this Web site. In order to purchase certificates, you must also place a deposit pursuant to the procedures defined. Please remember, you are not bidding in order to purchase the property. A tax certificate is only a lien on the property. It does not convey title to the land. Tax Certificates sold through this tax sale must be held two years before a tax deed application can be submitted. Bidding is based upon the amount of annual interest to be earned by the certificate buyer.
A tax certificate may be canceled if it is learned after the sale that a pre-existing stay order from the Bankruptcy Court was in effect on June 1. In that case, amount paid for the certificate will be refunded. In the event of a bankruptcy proceeding initiated after the sale of the lien, there are no guarantees – the United States Bankruptcy Court judge will determine the amount, if any, the certificate holder will receive.
Although this is an excellent investment and problems are rare, the best attitude for any investor is always “buyer beware.” All certificates will be sold online on June 1. Certificates will be awarded to the bidder willing to accept the lowest rate of interest on the investment. If there are multiple bids for the same lowest rate, the winner will be selected through a random, computer-generated process. Place your bids very carefully. It will be the bidders’ responsibility to ensure the parcels on which they have bids are the ones wanted. Once a certificate has been awarded, it will not be canceled due to an error, or change of mind, by the bidder. The bidder will be required to pay for all the certificates they have won.
Full payment for the tax certificates awarded, less the amount held on deposit, must be made within 48 hours of the auction close. Payment must be made by wire transfer in the same manner that you made your deposit. Pursuant to Florida law if a bidder fails to pay the amount due all bids for that bidder will be canceled and the bidder’s deposit will be forfeited.
Procedures
Bidder registration
The Duval County Tax Collector’s Office is required by the Internal Revenue Service to obtain the tax identification number and a completed W-9 form at the time each buyer registers as a bidder. For individuals, the tax identification number (TIN) is the Social Security Number (SSN). The individual registering must be the actual “owner” of the SSN. (It cannot be a child’s name with the parents SSN). For most “non-individuals” (i.e., trust, estates, partnerships, and similar entities), the tax identification number (TIN) is the Employer Identification Number (EIN) for the organization.
Please make sure the TIN you use on the Bidder Information form matches the name shown on your social security card or Employer Identification form. Annually we send 1099s – Interest Income Tax Statements to the registered bidder and the Internal Revenue Service. The information is reported for the name and TIN used at registration.
Deposits
Bidders must place funds on deposit in order to participate in the tax sale. A deposit in the amount of 10 percent of the total value of certificates you wish to purchase must be received by the dates stated on the tax sale Web site. For example, if you wish to purchase $150,000 worth of tax certificates, you must place $15,000 on deposit. You will be able to place your deposit by wiring the money from your financial institution. You will need to plan early and have your deposit posted according to the instructions on the sale site. If you do not have the funds on deposit you will not be awarded any tax certificates, even though you may have bid on them. If you place $10,000 on deposit you may be awarded up to $100,000 worth of certificates. If you win $100,000 in certificates any bids you placed on other certificates will not be considered. To ensure sufficient time to process them, the deadline for placing deposits will be several days prior to June 1. Check the procedures on this web site for instructions to place a deposit.
Tax certificate sale online and proxy bidding
Bidders will be able to register online and then bid from any computer that has access to the Internet. Simply go to http://duval.taxsale.com, log in and you’re ready to go. We will also have computers available in the library as well as our main office that we can make available to bidders. Simply call 630-1916, press option four, and make an appointment or send a request to the following e-mail address: [email protected]
The online tax certificate sale uses the concept of proxy bidding. Proxy bidding may be a new term to many of you but in fact it has been around for quite some time. The popular auction Web site, eBay, has used proxy bidding to determine the winner of their auctions.
How does proxy-bidding work? In a live auction, a bidder will lower his bid by quarter percent increments until he is the only bidder left or until the interest goes below his acceptable minimum level, at which point he would drop out. Proxy bidding is a form of competitive sale in which bidders enter the minimum interest rate that they are willing to accept for each certificate. The auction system acts as an electronic agent, submitting bids on behalf of each bidder. The result of the proxy system is that the electronic agent keeps lowering the bid to submit by quarter percent increments until you are either the only bidder left, (in which case you get the certificate at a quarter percent lower than the previous bid) or until you reach the floor you have set.
However, please note that zero percent bids are not treated as proxy bids; they are awarded at zero. If you are the only bidder on a given certificate and your minimum rate is greater than zero percent, the electronic agent will submit a bid of 18 percent on your behalf. In the case of a tie at the winning bid rate, the system awards to one of the tie bidders through a random selection process using a random number generator. In no case will a bidder be awarded a certificate at a rate lower than his specified minimum acceptable rate. Certificates that receive no bids will be awarded to the county at 18 percent. In addition, certificates valued at less than $100 with homestead exemption are awarded to the county and are not available to individual certificate holders.
Amount of purchase
The amounts printed in the newspaper and listed on this web site represent the certificate amount, which includes the unpaid taxes, assessments, and related costs and charges in accordance with Chapter 197, Florida Statutes.
Payment for certificates
The total purchase amount less the deposit must be paid within 48 hours of the close of the auction. The exact date and time will be posted on the sale site. Upon full payment of the purchased tax certificates, the certificate holder will be issued a receipt that indicates the tax certificate number, the amount of each certificate purchased, the property identification number and percentage bid.
All sales are final
Pursuant to Chapter 197.432(6), Florida Statutes, if a person to whom a tax certificate(s) have been sold fails to pay the amount due the tax collector will cancel all bids and the bidder’s deposit will be forfeited.
Certificate holders cannot contact property owners
The holder of a tax certificate may not directly, through an agent, or otherwise initiate contact with the owner of property upon which he or she holds a tax certificate to encourage or demand payment until two years have elapsed since April 1 of the year of issuance of the tax certificate.
Any holder of a tax certificate who, prior to the date two years after April 1 of the year of issuance of the tax certificate, initiates, or whose agent initiates, contact with the property owner upon which he or she holds a certificate encouraging or demanding payment may be barred by the tax collector from bidding at a tax certificate sale. Unfair or deceptive contact by the holder of a tax certificate to a property owner to obtain payment is an unfair and deceptive trade practice, as referenced in s. 501.204 (1), regardless of whether the tax certificate is redeemed. Such unfair or deceptive contact is actionable under ss.501.2075-501.211. If the property owner later redeems the certificate in reliance on the deceptive or unfair practice, the unfair or deceptive contact is actionable under applicable laws prohibiting fraud.
Tax deed process
For an investor to obtain a Tax Deed to the property the investor must hold the tax lien certificate for a minimum of two ears from April 1 the year the certificate was first issued. The selling of a tax deed by the Duval County Clerk of Circuit Court will result in issuance of a tax deed from a property owner to a tax deed applicant or the highest bidder for the deed.
As an example, a 2005 tax certificate purchased at the tax certificate sale on June 1, 2006, would have to be held until April 1, 2008, before the certificate holder could apply to bring the property to a tax deed sale.
Please note: A Tax Deed is not the same as a warranty deed. It is the certificate holder’s responsibility to ensure the legal status of the property. Likewise if it is determined that the process of “quieting title” would need to be done, it is the certificate holder’s responsibility to complete it and pay any associated fees.
Redemption of a tax certificate
Chapter 197.472(1), Florida Statutes states the following:
“Any person may redeem a tax certificate or purchase a county-held certificate at any time after the certificate is issued and before a tax deed is issued or the property is placed on the list of lands available for sale. The person redeeming or purchasing a tax certificate shall pay to the tax collector in the county where the land is situated the face amount of the certificate or the part thereof that the part or interest purchased or redeemed bears to the whole. Upon purchase or redemption being made, the person shall pay all taxes, interest, costs, charges, and omitted taxes, if any, as provided by law upon the part or parts of the certificate so purchased or redeemed.”
Should the tax certificate be redeemed any time prior to the issuance of a tax deed, the investor will receive a refund for the purchase amount, plus the rate of interest bid at the time of the sale.
Expiration of tax liens
Chapter 197.482(1), Florida Statues states the following: “After the expiration of seven years from the date of issuance, which is the date of the first day of the tax certificate sale as advertised under s. 197.432, of a tax certificate, if a tax deed has not been applied for on the property covered by the certificate, and no other administrative or legal proceeding has existed of record, the tax certificate is null and void, and the tax collector shall cancel the tax certificate, noting the date of the cancellation of the tax certificate upon all appropriate records in his or her office.”