Got a letter from the Mohave Count
Treasurer a couple of weeks ago. A bill, actually: $2,216.40 for
subsequent taxes covering two of the three liens I still hold, plus
$5 for fees. So what are subsequent taxes? My liens cover taxes due
for year 2010. If the property owner does not pay taxes for 2011, I
have the right to pay for that to keep my certificates “current.”
Here are details from the Arizona tax
codes:
42-18121. Payment of subsequent
taxes by certificate holder; fee
A. On or after June 1, if a person
who holds a certificate of purchase desires to pay subsequent taxes,
accrued interest and related fees due on the property, the person
shall exhibit the certificate or receipt of registered certificate to
the county treasurer. The treasurer shall enter the amount of the
payment on the certificate and on the record of tax lien sales. The
amount of subsequent taxes bears interest at the rate stated in the
certificate of purchase from the first day of the month following the
purchase of the subsequent tax lien.
B. The county treasurer shall
collect a fee of five dollars from the holder of the certificate for
making the entries.
42-18121.01. Subsequent purchaser;
assignment
A. If a person who holds a
certificate of purchase does not exercise the option to pay
subsequent taxes, accrued interest and related fees due on the
property pursuant to section 42-18121, the county treasurer may
require a person who desires to purchase a subsequent certificate of
purchase on the property to acquire by assignment all currently
outstanding certificates of purchase previously issued on the
property. The county treasurer shall process the sale as an
assignment on behalf of the previous holder of the certificate of
purchase.
B. An assignment made pursuant to
this section vests in the person all the right and title of the
original purchaser with the lien date effective from the original
lien sale date.
So, I had an option:
A.) Pony up the money to keep my rights
and keep earning the interest rate set when I bid for both the
original outlay and the new outlay, or
B.) Give up my rights to forclose in
another two and a half years and just let the next lien purchaser pay
me off (I guess that would be next February).
I decided to pay up. I had the money
from my Tax Lien bankroll sitting in a bank account earning something
like 0.25%, and I am not sure I will be participating in any other
auctions until next year. I did consider paying one and not the other
(one is 6%, one is 5%) so I would learn both sides, but in the end, I
wrote the checks.
Next month: Unless some other news pops
up, I plan to cover the Florida 5% rule in detail.