|PROPERTY TAX SALE
Summary of Tax Sale Process and General Information
Tax sale dates are determined by court proceedings and will be listed accordingly.
The purpose of tax auctions is to collect delinquent revenues and put properties back into productive use. Although the majority of property owners pay their taxes on time, the five or six percent that do not force us to take extreme measures. This is the last resort available to collect real estate taxes.
Persons wishing to find investment properties, or perhaps purchase a home may benefit from attending the auction. Anyone interested in property described on the following pages should be aware, however, that there are restrictions and requirements involved in purchasing a property for delinquent taxes.
Information on Tax Sale Process
The following information does NOT constitute legal advice. Anyone interested in bidding on properties are urged to seek independent legal advice regarding his or her rights and obligations. This information describes typical activity in a delinquent tax auction.
Once a property has been scheduled for tax sale and published, the cost of the tax sale preparation and publication is attached to the property. These additional fees cannot be waived.
On the day of the sale, the Clerk and Master of Chancery Court will conduct an auction on behalf of the City of Knoxville, selling each property individually. The Clerk and Master will open the bidding process with the total due on the property for delinquent taxes through the 2011 tax year, interest, penalty, fees, and other costs associated with the sale. This bid will NOT include any delinquent taxes due Knox County, nor will it include the 2012 or the 2013 taxes due to the City of Knoxville; thus, the sale of each property is made subject to these additional taxes. Since penalty and interest continue to accrue on the taxes, the purchaser should pay them as soon as possible and keep the receipts so that the expense can be reimbursed to the purchaser if the property is redeemed.
If you are interested in a parcel, it is your responsibility to determine its actual location and condition. The property is sold subject to its current condition AS IS without warranty. The City of Knoxville and the Clerk and Master of the Chancery Court make NO WARRANTIES, expressed or implied, relative to the title, condition, use, or any other matters involving any property in this tax sale or any other tax sale. No new surveys of the properties were made. Each property description was taken from the appropriate deed recorded in the Register's Office for Knox County and there is no representation or warranty made with regard to the accuracy of the descriptions.
The form of conveyance will be a Clerk and Master's Deed. It is the responsibility of the purchaser to contact the Clerk to request the deed, as provided in the Order of Confirmation. It is also the responsibility of the purchaser to record the deed in the Knox County Register of Deeds Office. The purchaser should be prepared to record the deed at the time it is delivered by the Clerk.
The successful bidder must make payment in full in cash or cashier's check or other form suitable to the Clerk and Master or pay thirty percent (30%) down in cash or cashier's check or other form suitable to the Clerk and Master and make a note for the remaining balance which shall be due in thirty (30) days from the sale date and shall not bear interest. The Clerk and Master may accept personal checks. Corporate checks and notes must be co-signed and/or guaranteed by an individual or individuals.
In accordance with state law, anyone who wishes to increase the final bid has ten (10) days to contact the court with the higher bid. This is referred to as a 're-bid'. Any bid made after the auction has stopped on the day of the sale, but within the 10 days after the sale must be at least ten percent (10%) higher than the previous bid. If any property has a re-bid, it will be subject to an additional auction approximately thirty (30) days following the first auction. The re-auction will be held near the entrance to the City-County Building in the corridor adjacent to the Assembly Rooms.
After a sale is complete, the court will issue an Order Confirming Sale on each parcel. The previous owner (who lost property due to delinquent taxes) has twelve (12) months from the date of the Order to redeem the property in accordance with State law (Tennessee Code Annotated 67-5-2701 through 2706). This requires the owner to pay the amount of the bid plus 10% to the court. The applicable period of redemption begins to run when the Chancellor signs the order Confirming Sale. This data will not necessarily coincide with the date of payment, due to paperwork that must be completed following payment to facilitate entering the Order. Paperwork cannot begin until payment is made; therefore, payment made as soon as possible would be to the purchaser's advantage.
After the applicable period of redemption runs, it will be necessary for the purchaser to call the Clerk and Master's office (215-2555) to request that a deed be made. If there are code violations or safety concerns requiring repairs or improvements, the bidder can make those improvements and an owner redeeming the property will have to reimburse those expenses, as well. The cost for additional improvements beyond those required for safety will not be reimbursed.
If you bid on a property, you will be required to honor the bid. If you inadvertently bid on the wrong parcel, or bid on a property that you have not seen, or if you change your mind about purchasing the property, the Court will use whatever processes that are necessary to effect compliance with your bid. The Clerk and Master also reserves the right to confirm the sale to the next highest bidder who agrees to comply with the bid if there is a default, without the necessity of republication.
The new owner of the property will not receive a deed to the property until one year after the Order Confirming Sale. The deed is called a "Clerk and Master's Deed." Any issues regarding personal property left on the premises by the original owner shall be settled between the new owner and the former owner.
Tennessee's law regarding abandonment of personal property may apply. Similarly, any issues regarding any person remaining on the property shall also be settled between the new owner and the former owner. Tennessee's law regarding trespassers or holdover tenants may apply.
An old lease will be terminated by the sale, and the new owner may collect rent or evict the occupant(s) if the rent is not paid. A new owner may sell the property immediately, but the property he or she sells will have all the restrictions that the property had in the new owner's hands.
If the new owner has questions regarding these matters, that person should consult an attorney.