Recent Developments in Tax Sale Legislation

Meredith A. Devlin of the Law Firm of Bingham Greenbaum Doll LLP published an article on "Recent Developments in Indiana Real Estate Law," including the following excerpt on Tax Sales:

During the 2012 legislative session, the Indiana General Assembly made significant changes to the laws governing tax sale procedure. As a result, taxpayers now have the option of entering into an agreement with the county auditor for the repayment of delinquent real property taxes, an option that was previously only available to taxpayers in Lake County. Prior to this change, a county treasurer could accept partial payments, but the property could not be removed from the tax sale list unless the delinquency (including applicable penalties, interest and costs) was paid in full. Now, if a taxpayer enters into a written agreement with the auditor’s office that meets the guidelines of the statute, the property will not be included on the tax sale list. In order to take advantage of this option, the agreement must require the taxpayer to pay the delinquency prior to the end of the following June.

Additionally, the General Assembly also added a provision that allows the county treasurer to extend the redemption period for property not sold during the tax sale. In most cases, the redemption period is one year. The treasurer may grant an extension if the taxpayer and the treasurer enter into a mutually satisfactory repayment agreement before the redemption period expires. As long as the taxpayer does not default in making the payments required under the agreement, the taxpayer will have up to one year from the date of the agreement to redeem the property.

Finally, the General Assembly also added a new time-limited provision that allows the fiscal body of a county to adopt an ordinance to modify the minimum bid required to purchase real property at the tax sale. Prior to this addition, the treasurer could not accept a bid lower than the sum of the delinquent taxes, the corresponding interest and penalties and other costs. However, a county may now pass an ordinance that allows the treasurer to accept the lesser of:

1. the aforementioned sum; or
2. 75 percent of the gross assessed value of the property. 

To take advantage of this new provision, the ordinance must be passed before July 1 and it may only apply until July 1, 2013.

For the full article:

http://www.bgdlegal.com/pubs/xprPubDetail.aspx?xpST=PubDetail&pub=1167

(Thanks to The Indiana Law Blog (http://www.indianalawblog.com/) for the link)