Get rich with no money down. The ultimate and perfect business plan.  One small problem.  The devil is in the details.  Investors at Land Tax Sales want to save a buck, so they go through the process themselves and find new ways to screw it up.  The latest tax sales trouble came when the purchaser of the property at the tax sale failed to give notice to all interested parties to the property.  The result was predictable.  The court set aside the tax sale.

In the Matter of Foreclosure Liens for Delinquent Taxes v. Parcels of Land, Case No. SC93982, the Supreme Court of Missouri affirmed the lower court decision to set aside the sale because the property was encumbered by two mechanic’s liens, and a properly filed mechanic’s lien is a substantial property interest that is subject to due process.  So, the lienholder was entitled to personalized notice by mail.  The Court reasoned that the lienholder’s name and address were reasonably ascertainable thus placing the burden on the purchaser at a tax sale to give notice.

Judge Wilson of the Supreme Court clarified the Court’s ruling by saying that this type of notice only applies to a mechanic lien claim for which a judgment has been obtained.   So the ruling would not then apply to a lienholder who has only filed a mechanic’s lien or a subsequent mechanic’s lien petition.  It is curious to me why the court would not require notice for someone who is prosecuting his claim under the law and according to the prescribed statutes.  The purchaser can easily determine the name and address of the person who filed the lien or who filed the lawsuit to enforce the lien.  So why not give him notice?  I often tell my client’s not to try and make sense of the law.

In closing,  good luck to all investors at tax sales who want to go it alone to save a buck.

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