Information on Tax Sale Process
The following information does NOT constitute legal advice. Anyone interested in bidding on properties is urged to seek independent legal advice regarding his or her rights and obligations. This information describes the general activity in a delinquent tax sale auction.
During the course of a tax sale lawsuit, various costs will be incurred. These include, but are not limited to, costs for title searches, advertising and service of process. In addition, interest, penalties, attorney fees and court costs are also added to the amount of delinquent taxes. These additional costs and fees cannot be waived. All of these costs will be added to the taxes owed and the entire amount is a lien against the property. This will be the minimum which must be paid for any property.
On the day of the sale, the Clerk and Master of Chancery Court will conduct an auction on behalf of the Knox County, 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 2009 tax year, plus interest, penalty, fees, and other costs associated with the sale. This bid will ALSO include any delinquent taxes and costs due to the City of Knoxville. It will not include the 2010 and 2011 taxes, plus all interest, penalty, fees and costs for these years due, to Knox County and the City of Knoxville. It will also not include the 2012 taxes owed to Knox County and the City of Knoxville which are a lien against the property, but not yet due and payable. Thus, the sale of each property is made subject to all these additional taxes interest, penalty, fees and costs. Since interest, penalty fees and other costs will continue to accrue on the2010 and 2011 taxes, the purchaser should pay these other taxes as soon as possible and keep the receipts so that the expense can be reimbursed to the purchaser if the property is redeemed (see information on redemption below).
Likewise, the bid made by the County will not include the cost of repairs, alterations or improvements, of vacating and closing, or removal or demolition as made by the City of Knoxville where a parcel of property is unfit for occupation or use, and thus the sale of these properties may also be subject to any and all such costs to the extent applicable.
If you are interested in a parcel, it is your responsibility to determine its actual location, condition and ownership. The property is sold subject to its current condition AS IS and WHERE IS without any warranty of any kind. Knox County, the City of Knoxville and the Clerk and Master of the Chancery Court make NO WARRANTIES, expressed or implied, relative to the title, ownership, condition, use, acreage, improvements, boundary lines or any other matters involving any property in this sale or any other sale. Each property description was taken from a 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 description.
The successful bidder for a parcel at a tax sale 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 execute a promissory note for the remaining balance which shall be due thirty (30) days from the sale date without 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, as required by the Clerk and Master, in his discretion.
In accordance with state law, anyone who wishes to increase the last and highest bid at a tax sale has ten (10) days to contact the court and raise the 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 referenced 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. The re-auction will be held near the entrance to the City-County Building in the corridor adjacent to the Large and Small Assembly Rooms. Anyone may bid at the re-bid sale. The highest bidder at the re-bid sale will be the purchaser.
At the sale or re-bid sale, immediately after each parcel is sold, the high bidder must give his or her name to the designated deputy clerk or deputy trustee present at the sale and complete all arrangements for payment on the day of the sale.
After a sale is complete, the court will issue an Order Confirming Sale as to each parcel. The previous owner (who lost property due to delinquent taxes) has one (1) year from the date of the Order to redeem the property in accordance with State law (Tennessee Code Annotated 67-5-2701 through 2706). This law requires the owner to pay the amount of the successful bid or re-bid plus 10% to the court. The redeeming party may also be liable for other expenses as permitted by law. The applicable period of redemption begins to run when the Chancellor signs the Order Confirming Sale. This date will not necessarily coincide with the date of the sale or payment, due to paper work that must be completed following the sale to facilitate entering the Order. Paper work cannot begin until payment is made in full by the purchaser; therefore, payment made as soon as possible would be to the purchaser’s advantage.
After the one year period of redemption expires, it will be necessary for the purchaser to call the Clerk and Master’s office (215-2555) to request that a deed be made. The form of conveyance will be a Clerk and Master’s Deed. It is the responsibility of the purchaser to contact the Clerk and Master 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 and Master.
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 means 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 or other notice.
Any issues regarding personal property left on the premises by the original owner shall be settled between the new owner and the former owner. Similarly, any issues regarding any person remaining on the property shall also be settled between the new owner and the former owner. Any improvements to the property during the period of redemption discussed above are made at the risk and expense of the purchaser. If the new owner has questions regarding these matters, that new owner should consult an attorney.
For more information please contact:
Robin Benton, Tax Sale Coordinator
Knox County Trustee’s Office