Quick Read Summary (TLDR)

While Florida law grants tax deed purchasers immediate ownership and the right to possession, selling the property immediately is rarely practical. The lack of marketable title and the inability to obtain title insurance create significant barriers to resale.

Investors must either file a quiet title action, wait four years, or pursue alternative certification methods before most buyers will consider purchasing the property.

Attempting to “go it alone” without an attorney can result in procedural errors and additional costs for the property investor.

Reach out to the real estate attorneys and full-service title agency at South Florida Law for legal advice and representation at (954) 900-8885 or via our contact form .

Purchasing property at a Florida tax deed auction can seem like an attractive investment opportunity. Buyers often acquire real estate at prices well below market value, leading many to wonder whether they can quickly flip the property for a profit. The answer to whether a tax deed property can be sold immediately is both yes and no—and understanding the nuances involved is critical for any investor entering this market.

Understanding Tax Deed Ownership in Florida

When a property owner fails to pay property taxes in Florida, the county eventually sells a tax certificate on that property. If the certificate remains unredeemed for at least two years, the certificate holder may apply for a tax deed sale. The property is then auctioned to the highest bidder at a public sale conducted by the Clerk of Court.

Under Florida Statute 197.562, any person or entity that receives a tax deed is entitled to immediate possession of the property. The recorded tax deed makes the purchaser the legal owner. If the previous occupant refuses to leave, the new owner may apply to the Circuit Court for a Writ of Assistance to gain possession.

However, legal ownership and the ability to sell the property are two very different things.

Why Tax Deed Properties Cannot Be Sold Immediately

While a tax deed conveys ownership, it does not convey marketable title. Title acquired at a tax deed sale is not immediately marketable because claims from prior owners and potential lienholders must be extinguished before the title can be insured. Without title insurance, finding a buyer willing to purchase the property is highly unlikely in today’s real estate market.

Most lenders require title insurance before financing a property purchase, and most buyers—even cash buyers—want the protection that title insurance provides. This creates a significant obstacle for tax deed investors hoping for a quick turnaround.

Florida law provides two primary paths to obtaining clear, insurable title: filing a quiet title action or waiting out the four-year statute of limitations.

The 4-Year Statute of Limitations on Tax Deeds Explained

Florida Statute 95.192 establishes an important protection for tax deed purchasers. According to this statute, when a tax deed has been issued and held for four years, no action shall be brought by the former owner of the property or any claimant under the former owner.

For this protection to apply, several conditions must be met. First, the tax deed must have been properly recorded for more than four years. Second, the tax deed grantee or their successor must have paid property taxes during that entire period. Third, proper notice must have been furnished to all required legal title holders, mortgagees, and lien holders as required by Florida Statute 197.502(4). Finally, there must have been no adverse claim asserted of record and no possession adverse to the tax deed grantee.

Based on this statute, many title insurance underwriters are willing to produce a title commitment for tax deed property that has passed the four-year mark without requiring a quiet title action or other title certification process. However, this is not always the case. Special circumstances may still require additional title work, and some title agents or attorneys advise their clients to proceed with a certification process out of an abundance of caution.

It is important to note that while challenges to the sale can no longer be made after four years, other title defects might exist that can prevent immediate insurability. These include conveyance errors in the chain of title, incorrect legal descriptions, or liens that have not been properly released.

Quiet Title vs. Tax Title Certification: Which Is Faster?

Tax deed investors who do not want to wait four years have options to clear title more quickly. The two most common approaches are filing a quiet title action or obtaining a tax title certification.

A quiet title action is a lawsuit filed in the circuit court where the property is located. The purpose is to eliminate all claims to title that might prevent a title insurance company from issuing a clear policy. The plaintiff must notify all potential claimants, and if no valid objections are raised, the court issues a judgment confirming ownership. Simple quiet title cases might be resolved in as little as 30 days, while more complex disputes can take over a year to settle. The cost typically ranges from $1,500 to $5,000 or more, depending on the complexity of the case.

Tax title certification is a newer alternative that some investors prefer. This process involves a specialized title company or attorney reviewing the tax deed file and certifying that the sale was conducted properly. While certification can sometimes be faster and less expensive than a full quiet title action, it may not be accepted by all title insurance underwriters. Some situations still require a traditional quiet title lawsuit regardless of certification results.

Investors should consult with an experienced Florida real estate attorney to determine which approach makes the most sense for their specific situation and timeline.

How to Get Title Insurance on a Florida Tax Deed

Obtaining title insurance on a tax deed property requires demonstrating that the title is clear of competing claims. There are essentially three ways to accomplish this goal.

The first option is to file and win a quiet title action. A successful quiet title judgment allows a title insurance company to write a policy insuring title to the property, provided all necessary parties were named in the action and properly served. This is the most direct method to make a tax deed title marketable.

The second option is to wait four years while paying taxes and maintaining the property. After the statute of limitations expires under Florida Statute 95.192, many title companies will insure the property without requiring a quiet title action. However, a title search should still be conducted to identify any other potential defects.

The third option is to obtain a tax title certification from a qualified provider, then work with a title company that accepts such certifications. This can sometimes provide a middle ground between the expense of litigation and the lengthy wait of four years.

Liens That Survive Tax Deed Sales

Prospective buyers should also understand that certain liens survive tax deed sales. Under Florida Statute 197.552, governmental liens held by municipal or county governmental units, special districts, or community development districts survive the issuance of a tax deed if they are not satisfied from the sale proceeds. These liens remain against the property and become the responsibility of the new owner.

Private liens such as mortgages and most judgment liens are typically extinguished by the tax deed sale, assuming proper notice was provided. However, investors should always review the ownership and encumbrance report in the tax deed file before bidding.

“…investors should always review the ownership and encumbrance report in the tax deed file before bidding.”

The Importance of an Attorney

Given the complexities of Florida tax deed law and the significant financial stakes involved, property purchasers should strongly consider working with an experienced Florida real estate attorney before and after acquiring property at a tax deed sale. Professional legal guidance can help investors navigate the title clearance process efficiently and avoid costly mistakes.

South Florida Law

If you are a tax deed property investor looking to resell a property soon after purchasing it in an auction, you will need both legal advice and an experienced title agency. South Florida Law is both a title agency and a real estate law firm with extensive experience in Florida real estate matters. With us, you get the best of both worlds: legal advice on your real estate matter and full title agency services including the issuance of title insurance.

If you need to clear the title of a tax deed property you purchased, reach out to South Florida Law at (954) 900-8885 or via our contact form.