Real Estate Tax Certificates

By James Neumann

TAX CERTIFICATES

The sale of Tax Certificates by the County Treasurer has been allowed under Ohio Revised Code Section 5721 for a number of years. Tax Certificates have been sold by a number of County Treasurers in various parts of the State of Ohio. The Morrow County Treasurer has begun selling Tax Certificates and the Crawford County Treasurer is considering doing so as well.

The sale may be by auction or negotiated sales. The tax parcel must be on the County Delinquent List. A certificate purchase price is determined and the certificate interest rate is disclosed on a Tax Certificate.

The interest rate for the certificate can be up to 18% figured as provided under Ohio Revised Code 5721.41. The Certificate may be for a period up to six years; however the buyer of the tax certificate may not file a foreclosure until after a one year period from the date of the Tax Certificate, unless except for a county reutilization corporation.

Ohio Revised Code Section 5721 sets forth the terms and conditions for the purchase, redemption, foreclosure and other matters for Tax Certificates.

This article is being provided merely to bring attention to the fact that Tax Certificates are or may be sold in the counties in this area. They represent a means for a county to obtain real estate tax proceeds in another manner if they are delinquent.

One concern that needs to be addressed is once the tax certificate is sold, taxes may appear as paid on the Auditor’s website. Upon further investigation one can discover that a lien was sold and a Certificate may be on record in the office of the Recorder. The knowledge that past due taxes and interest maybe due can be important in determining a purchase price or negotiating a short sale or other type of transfer.

The property owner is supposed to receive notice of the sale from the county; however the buyer of the tax certificate cannot contact the property owner for a certain period and cannot begin foreclosure proceedings until after the time period noted above. Thus the property owner may not be aware of the circumstance until too late.