Can I sell a property acquired in a state tax sale to the previous owner or a family member of the owner?

I purchased the property a county tax sale. The redemption period has just expired and I was contacted by the brother of the property owner asking to purchase the property from me. A title search shows the property was willed to the current owner, then shows over $70,000 in mortgage fees and a mechanic’s lien. My concern upon speaking with the interested party is that this is something planned by them to get out of the lien(s) and by selling to them i would be committing fraud.

Asked on October 28, 2011 under Real Estate Law, Indiana

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If you purchased property at a tax sale, under state law of all states in this country, all liens, mortgages, and trust deeds were wiped out as a matter of law as the result of your purchase that were recorded on the property.

If the redemption period has expired, you do not have to worry about losing the property to the prior owner.

If you want to sell the property back to the prior owner, there would be nothing wrong if you do so. I just suggest that you retain a real estate attorney to assist you in such a sale.

Good luck.


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