The Right Way To Pay Off A Tax Lien?

A few weeks ago, I received a letter from a law firm representing a man who claims to hold a lien sale certificate sold by the City of Miami approximately 3 years before I purchased the property at a tax deed auction.

As far as I can tell, the certificate itself is legit... but the only thing really backing up its holder's claim is his own word, and the fact that an established, respectable law firm is representing him. The certificate itself was originally sold to a local bank, and was issued in the name of an employee (or possibly a lawyer from the law firm representing the bank).

At the moment, I'm assuming it did, in fact, survive the tax deed auction since it arose from a "Governmental" lien (even though the certificate itself is held by a private investor), and ultimately needs to be paid. The questions is, how should I go about paying it to ensure that the certificate's holder keeps up his end of the deal and promptly records its satisfaction?

Likewise, what can I do to ensure that he really IS the legitimate holder of the certificate? Does the law firm representing him have any affirmative duty to verify that he is, in fact, the legitimate certificate holder? If his claim ended up being fraudulent, and the real holder went unsatisfied, would I have any recourse against the law firm that represented him (since frankly their good reputation, and presumed screening of their clients, is the only thing I have at this point backing up the claim)?

Finally, I read somewhere that I might be able to make payment directly to the county tax collector's office. Would THIS be an ideal solution that would get the certificate promptly recorded as "satisfied", and let me offload the burden of verifying that he really does have a legitimate claim? Or if it COULD be done, would it more likely cause a bigger mess -- money in limbo, lien not recorded as paid, and interest still accruing because ultimate disbursement hadn't been made to the lien holder?

did you get or try to purchase title insurance when you got the property?

Miamicanes:

The county Treasurer (or, perhaps, the City Treasurer, if they were the one who sold the lien originally) is where you would pay off a property tax lien.

You can probably find out with phone call.

It sounds as if the current lien holder is preparing to foreclose on the property and is notifying you .

How much total are we talking about.

~$600 for the original lien, ~$600 interest, $500 in legal fees, and $140 for the alleged title search. So as you can see, if there's any legal way I can avoid paying the legal fees & title search fee they want to charge, I'll be saving a nontrivial amount of money.

If you had title insurance when you bought the property, you may have a claim with the title company - if so, I'd call them.

No title insurance... it was bought at a tax deed auction.

Anyway, I just had an afternoon from hell in downtown Miami. God, what a mess. Now I know why so many Miami (the City, not the metro area in general) residents were so eager to have the State abolish the City 10 years ago (back when Xavier Suarez was mayor, the City's municipal bonds were rated as junk bonds, and the City itself was bankrupt). The long and short of it is, the City used to sell lien certificates, but didn't bother to record them. A lawsuit sometime around 2003 forced them to get their act together and literally dump truckloads of lien sale certs (including the one sold for my lot) on the Clerk of Court, who dutifully filed them as "John Doe" records. That's why a certificate sold 3 years before the tax deed auction didn't get included in the file... it wasn't even recorded until after the sale took place. And you probably thought New Orleans had government problems...

Anyway, here's a quick summary of my afternoon:

* Dade County Tax Collector's office, information desk -- "It's a City lien, so you have to go settle it with the City of Miami's finance department."

* City of Miami Finance Department -- "It's out of our hands. We sold the certificate and have our money." When pressed, they said it's an official tax lien sale certificate, issued by Dade County.

* Dade County Tax Collector's office, customer service agent -- "We have no record of any unpaid taxes. Yes, we issued the certificate, but we're not responsible for its collection." (when asked how it was that Dade County was able to ignore the plain language of Florida Statute 197.472 ("Redemption of Tax Certificates"), she first said it wasn't a tax certificate, just a mere lien (completely contradicting what I was told by the City of Miami's Finance Department)

I then decided to try and find the department responsible for tax lien foreclosures, in the desperate hope that they might have some useful insight into the matter. So... I traipsed over to the East Courthouse building (~3 blocks away from the Tax Collector's building), and was told that they were only responsible for recording documents & was sent back to the tax collector's building.

At that point, I headed up to the 14th floor of the tax collector's building (as directed by the building directory), only to find a big sign by the elevator saying the department moved (~3 years ago) down to the first floor -- in other words, the department I went to earlier. I found the information desk, and pestered them until they checked their computer and grudgingly told me to try the 15th floor.

On the 15th Floor, I finally did get in touch with someone who seemed to have a clue... but her firm opinion was that it's a "lien sale certificate", not a "tax lien certificate", and that I'm wasting my time trying to find anyone in Dade County's government who'll let me redeem it directly. There was ONE bright spot, though... I finally got a straight answer as to why the tax deed office won't release the funds. Apparently, my attorney dropped the ball yet again, and SHOULD have had the judge order the surplus funds' release as part of the final motion to quiet title. Sigh. Now, I just need to figure out whether I should try and get that lawyer to amend the final motion, try to amend it myself pro-se, or try to find a new attorney to finish the job right.

Grrrrr. Anyway, I seem to be back to square one with respect to paying the lien. Nobody in the City or County will accept responsibility for accepting payment, so my plan to pay the face value & interest, and tell the cert holder to sue me in small claims court if he genuinely believes Florida Law allows him to collect legal fees as well, seems to have gone down the toilet. I suspect that if I send the law firm a check for only the cert's face value and interest, they'll simply refuse to accept it and will proceed to initiate foreclosure proceedings.

Any other ideas?

Whew!......what a mess!

Could you just offer to sell the the certificate to them(suggesting that it may be less time consuming for them in the long run)?

Donate it to a charitable organization (tongue-in-cheek on this idea)?

Sell it on EBay?

When you say "refile the motion to release surplus funds" are you talking about money being reinbursed to you or to cover the extra liens as money allows? I would assume the state gets to keep any surplus from the tax deed sale.