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Explaining Tax Liens and Their Implications

June 21, 2012 | Comments: 0 | Views: 143

Tax liens are like government restrictions on certain properties. These so called restrictions are usually imposed on specific lands and properties that are usually delinquent in the loan or mortgage payments. In reality, the owner of the land that has gone under the restrictive imposition of the government agency can still catch up with the delayed or missed payments. When these have been done, the lien will then be lifted. The government is usually very generous when it comes to giving notice to the owners of properties under loan or mortgage. Notices of delinquent payments are usually given months before any tax liens are imposed on the owners and there are many other chances for the holders of the deeds to make up for their delinquencies. The taxes that may be missed vary depending on what is linked to the property and its owner, such as income taxes and possibly even property taxes.Implications

Once the restrictions are in place, it may be more difficult for the current owner of the land to catch up on the payments. This is because the government usually expects the owner to pay the delinquencies including any other interests that may have been incurred during the non-payment duration. The amount that has been accrued may even be the total amount that the agency expects the landowner to pay in full in order to lift the restrictions on the property. If there is no progress on the part of the people who owns the land, the government is obliged to auction off the tax liens to interested investors. In these auctions, the county in which the property belongs to will announce an auction to interested parties. There are certain rules and regulations that come with bidding and winning the bid for property under these conditions. When interested parties bid for these properties, it is understood that the current owners are still given enough time to pay back the delinquent payments that they owe the government through the party that has made a winning bid for the property. Certain conditions do apply and some of the owners will not be able to pay off what they owe. When this occurs, they transfer the deed of the property to the winner of the bid and hand the property to them after a specified period of time. It is also possible that the property might have other entities after it due to the fact that the owner might owe other people some money as well. Usually, the government takes precedence in cases like these and the tax liens are issued to the government agency.

For buyers of these kinds of properties, they have to stand by the rules and regulations that govern these transactions. If the current owners can pay the taxes and monies that are owed, then they have to give back the rights to the property. Once there is no movement to pay on the side of the current owner, then the winner of the bid can collect the deed after a specific period of time.

Learn more about tax liens  at: Source: EzineArticles

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