Taxes, Real Property
The Company generally does not insure tax titles unless a judicial foreclosure occurred and the owner and foreclosed lienholders were personally served, or unless you also secure a deed from the owner and release from such foreclosed lienholders. You must confirm that all taxes and assessments that are liens on the land are satisfied or excepted (by general or specific exception).
Possible Retroactive Taxes
Unless all of the land is properly assessed and all the taxes and assessments paid thereon, the Policy when issued will contain the following exception:
“Retroactive assessments for taxes against the land, and all interest and penalties which may accrue.”
Comment: You should use this exception if part of the land or improvements on the land have not been included in assessments (e.g., house not included; abandoned street not assessed).
Payment of Taxes as of Policy Date
The Company requires the payment of all taxes and assessments and any penalties and interest, due and payable at Date of Policy.
Comment: You should use this exception if you will not close the transaction.
Payment of Prior Taxes
The Company requires the payment of all taxes and assessments and any penalties and interest for the year ______ and prior years.
Comment: This is an alternative method to require the payment of all taxes.
Tax Deed - Administrative (Nonjudicial) Tax Foreclosure or Potential Defect in Judicial Proceeding
The interest of _________________ ("Taxpayer") acquired by deed dated ______, recorded ______________, was subsequently conveyed by Tax Deed dated ____________, recorded ________. The Company requires for its review:
(a) quit claim deed from the Taxpayer and discharge or release of lien from all lienholders of record, if any;
(b) quiet title final judgment extinguishing the interests of the Taxpayer and all lienholders of record, if any, together with all proofs of service supporting this court action; or
(c) certification acceptable to the Company confirming compliance with all applicable state laws and due process requirements relating to the tax foreclosure.
At that time, the Company may make additional requirements or exceptions.
Comment: You should raise this requirement if the tax foreclosure was a summary (nonjudicial) sale in order to confirm that all rights of the taxpayer and other lienholders have been extinguished. You should raise these requirements in a judicial tax foreclosure proceeding if there is any question about the propriety of the foreclosure - e.g., notice to the taxpayer - which might cause the foreclosure to be defective. If appropriate, you may modify the initial recital to conform to your jurisdiction's tax foreclosure procedures. For example, you may wish to reference a "Judgment of Foreclosure in favor of a governmental unit" instead of a "Tax Deed" if that is the mechanism used to transfer title from the Taxpayer.
A certification confirming compliance with applicable foreclosure procedures (referenced in section (c) above) may be relied upon to satisfy this requirement only if:
(1) your state has issued a Bulletin authorizing such use, and
(2) the certification is provided by a source acceptable to STGC.
A certification from the following source(s) is/are acceptable:
Tax Title Services
600 Anton Blvd, 11th Floor
Costa Mesa, CA 92626
Phone: (714) 371-4041
Fax: (714) 371-4189
Please refer to the specific Bulletin issued for your state, or contact your state, district or division counsel.
The payments for _____________ assessments are now delinquent. The amount necessary to bring the payments current is: $________ and any penalties and interest, if paid by ____________.
Comment: This requirement describes specific, known delinquent assessments.
Awaiting Tax Report
For Informational Purposes Only: A report on taxes and assessments has been ordered. The Company will send a tax supplement when it is received.
Comment: This note may be used if a tax search has not yet been secured.
Additional Taxes Because of Improvements
Any possible additional tax assessment and any penalties and interest, because of construction and improvements.
Comment: If improvements have not been properly included in the current or prior years’ assessments, you should add this exception.
Subsequent Taxes Because of Change in Use
Subsequent assessments or taxes and any penalties and interest, due to any change in the land usage or loss of exemption.
Comment: You should use this exception if the land has been allowed special taxation or exemption and a change in use would cause retroactive assessments.
Retroactive assessments for taxes against the land, and all interest and penalties which may accrue.
Comment: You should use this exception if the land (or improvements) or a portion of the land (e.g., an abandoned road) has not been included in tax assessments.
The land is in ______________________ district and is subject to the payment of taxes or assessments levied by said district.
Comment: You should use this exception for information if the land is in a district disclosed in the public records.
Taxing District (Refer to Recording Date)
The land is in _________________________ district as reflected by the notice recorded _________________ and is subject to the payment of taxes or assessments levied by said district.
Comment: This is an alternative exception to use for information if the land is in a district disclosed in the public records.
Notice of Postponed Taxes
A lien to secure all sums due for postponed real property taxes and any penalties and interest, on said land, evidenced by a notice of lien recorded ________________.
Comment: You may use this exception if a notice of lien to secure postponed taxes (e.g., because of special use) is recorded.
City and County Taxes
General and Special City and/or County taxes, including any assessments collected with taxes, to be levied for the fiscal year 19___ - 19___ which are a lien not yet payable.
Comment: You may use this exception for city and county taxes if they are not otherwise excepted in a more general tax exception.
Rights of redemption in favor of _______________________ in connection with the suit to foreclose lien reflected by Deed recorded _______________ for a period of __________________ after ______________________________.
Comment: You may use this exception if the Company is willing to insure a tax foreclosure and if redemption rights have not expired.
Note: You may add additional local exceptions here. Please consult with our underwriting personnel in preparing appropriate provisions.
Retroactive or Additional Taxes
Retroactive or additional taxes or assessments, and interest and penalties, which may be imposed by adjustment, reappraisal, reassessment, appeal, amendment to the tax records, or otherwise.
Comment: You should use this exception if retroactive or additional taxes or assessments may be imposed.
See Underwriting Manual, 19.04 Taxes And Assessments.