Posted on: 10th Feb, 2010 07:24 am
I'm wondering how the state of Michigan can assess and record a tax lien six months after a foreclosed property had been sold to a bank (Fannie Mae) at a Sheriff sale. What's the value in having clear title at close if tax liens can be assessed and recorded after the sale of a property? I presently don't know what type of taxes were owed on this foreclosed property, but perhaps if the back taxes are property taxes, such back taxes are attached to the property regardless of who owns the property. Any comments on this topic would be appreciated. Thanks.
Hi margaris,
The state always has the right to put liens on a property if the taxes are not paid. If there are outstanding property taxes, a lien will be attached against the property, even if it has been sold at a sheriff sale. Whoever purchases the property has to pay off the back taxes. Unless they are paid off, the state can place a tax lien, no matter who the actual owner of the property is. Property tax liens are put against the property, not against an individual.
The state always has the right to put liens on a property if the taxes are not paid. If there are outstanding property taxes, a lien will be attached against the property, even if it has been sold at a sheriff sale. Whoever purchases the property has to pay off the back taxes. Unless they are paid off, the state can place a tax lien, no matter who the actual owner of the property is. Property tax liens are put against the property, not against an individual.
Thanks for your post. I went back to the tax lien document and confirmed that the back taxes were income taxes. Can the state still put a lien after the sheriff sale if the back taxes from the former property owner are state income tax?
To John,
If there has been an income tax lien put against the property before the sheriff sale, the lien would not be removed until it is paid off. In such a case, the new owner will have to pay off the lien after purchasing the property at the sheriff sale. However, if the new owner has already purchased the property at the sheriff sale and there was no lien while he purchased it, I dont think the income tax lien could be placed on the property after the sale. After the sheriff sale the ownership of the property changes and the new owner should not be made to pay off the lien for income tax which the previous owner did not pay.
If there has been an income tax lien put against the property before the sheriff sale, the lien would not be removed until it is paid off. In such a case, the new owner will have to pay off the lien after purchasing the property at the sheriff sale. However, if the new owner has already purchased the property at the sheriff sale and there was no lien while he purchased it, I dont think the income tax lien could be placed on the property after the sale. After the sheriff sale the ownership of the property changes and the new owner should not be made to pay off the lien for income tax which the previous owner did not pay.