Tax Lien Foreclosure Timeline

Many homeowners are surprised to find out their property is in tax lien foreclosure. Furthermore, they did not realize that they had tax liens or that the tax lien holder has the power to foreclose on the property for the taxes owed. The full process of a tax lien foreclosure takes years to complete. Most often, properties which are foreclosed on by the tax lien holder are properties forgotten by heirs who were to inherited the property.

The tax lien foreclosure process starts with unpaid property taxes. In Arizona, property taxes are billed in August. The first half of the year’s taxes are due October 1st. The second half is due March 1st of the following year.

In February of the following year, if the taxes remain unpaid, the tax lien is sold to the investor. This is because county governments rely on property taxes for revenue. An example of the timeline so far is as follows:

Taxes for the year 2014 are billed in August. The first half of the taxes are due October 1st, 2014. The second half is due March 1st, 2015. If the 2014 property taxes are still unpaid in February of 2016, the 2014 tax lien is sold to a lien holder.

The lien holder must hold the lien for 3 years before they can open a tax lien foreclosure. This means that the 2014 tax lien, which was purchased in 2016, can be foreclosed upon in 2019 if the lien has not been paid by the owner of the property. When the lien holder decides to open a foreclosure, they send a Notice of Intent to File to the property owner.

If the taxes remain unpaid, a Les Pendens is filed. This is the opening document for the tax lien foreclosure. A tax lien foreclosure goes through the court system.

A summons is sent to the homeowner informing them that there is a pending law suit to foreclose on the property. Homeowners have 20 days to respond if they are in state, 30 days if they are out of state.

Once the time to respond has past, if the tax lien is still not paid, an Entry of Default is filed. This signals the beginning of the end. Now, the hearing to grant the property to the lien holder is scheduled.

At the Default Hearing, if the tax lien is still not paid, the property owner’s right to redeem the taxes is lost and the tax lien holder is issued a Treasure’s Deed to the property.

Facing a tax lien foreclosure and not sure what to do? Call our office today at (480) 304-5614 to get more information.

See the full Tax Lien Foreclosure Timeline …