An area that we have extensive experience in is buying properties that are have delinquent taxes. The processes regarding taxes in the state of Arkansas are not necessarily common knowledge to the public, so we can really assist those that are in this scenario. I’ll share how the process works :
When a property is in default with property taxes, the county that the property resides in will give the owner 2 years to pay it. If the owner does not pay the taxes within that 2 year period, then the county will ‘turn the property over’ to the Commissioner of State Lands office.
Here’s an important thing to know: Arkansas is a tax deed state. This means that instead of placing a ‘tax lien’ on the property, the state actually takes possession of the property and deeds the property to the state!!!
The good news is that once this happens, the Commissioner of State Lands office will still hold the property (in the State) for 2 additional years . So the owner can still go to the state’s office and pay the taxes to get their deed back (re-obtain possession).
However, IF the owner never pays the taxes and the property is 4 years due in back taxes, then the property will be added to the state’s tax auction list. Each county has its own auction date, and at this time the properties that are on the list will be offered for sale to the public, in a live bidding auction. This is where the owner can lose their property for pennies on the dollar.
Very important: But wait, there’s still good news! An owner has one final chance. There is actually a redemption period of 10 days after the auction, where the prior owner can go to the states office after the auction and pay the taxes to re-obtain their deed / ownership. Again, this is only a 10 day period .
This can get very stressful. I have actually been to the state’s office on the 10th day, with only a little over 1 hour left in the day to pay the taxes and get the property back. Often times we have been down to the wire in buying properties that are in tax delinquency. Often times there is another issue with the title or some other lien that must be satisfied when purchasing, so what happens is the combination of tax delinquency along with other title issues can become very challenging.
But with that said, this is what we do! We have purchased many properties that are tax delinquent, and got money in the hands of the owners before their property was lost to the state auction.
I don’t recall any testimonials from our previous sellers that mentioned or admitted having a tax delinquency, but just know that it is very common for us to buy and assist those that are. (see testimonials link below)
One final note on tax delinquent properties: Have you ever heard of overages? Well, I have a final piece of good news for owners whose property got sold in the auction: IF the property sold for more than the tax bill, then the owner can go to the state and request their overage funds! The owner can receive any funds above the tax bill. (up to the auction sale price).
Unfortunately with overages the owner must wait for 1 full year before they can apply for them. And of course, the overage amount may not be that much because tax auctions are known for selling at big discounted prices.
I hope this helps understand the tax delinquency process in Arkansas. Disclaimer: I am no attorney and I urge you to do your own research by checking out the Commissioner of State Lands office yourself. I have found that they are extremely helpful .
If you have a property facing back taxes issues, give us a call. We are more than happy to assist you.