What Happens If I Don't Pay Property Taxes in Alabama?

If you default on property tax payments in Alabama, you could lose your home in a tax sale or foreclosure.

If you are delinquent on your property taxes in Alabama, you could eventually lose your home through the tax lien sale process. In the alternative, the Land Commissioner might foreclose on your home. Below you can learn what notice you’ll get before an Alabama tax lien sale, how the tax lien sale process works, whether you can get your home back after the sale, and how a Land Commissioner foreclosure works.

Property Tax Lien Sales in Alabama

If you don’t pay your property taxes in Alabama, the delinquent amount (including the past-due taxes, interest, penalties, and costs) becomes a lien on your home. Once there is a tax lien on your home, the taxing authority may hold a tax lien sale. (If you are struggling to pay your property taxes, learn about your  options to avoid a tax sale.)

Notice of the Tax Sale

In order to hold a tax lien sale, the tax collector must first get a “court decree” from the probate court, authorizing it to hold a sale. You’ll receive two notices before the sale, one before and one after this court proceeding.

Notice before the probate court proceeding.  Ten days before the probate court proceeding, the tax collector must serve you with a notice by:

  • personally handing you a copy of the notice
  • leaving a copy of the notice at your residence or place of business, or
  • mailing you a copy of the notice by certified mail (Ala. Code § § 40-10-4, 40-10-11).

If the tax collector cannot get notice to you in any of these ways, it can publish the notice in a newspaper or post it at the county courthouse (Ala. Code § 40-10-4).

The notice will tell you to show up at the hearing and demonstrate, if you can, why the court shouldn’t allow the tax lien sale (Ala. Code § 40-10-4).

Notice prior to the tax sale.  If the court authorizes the sale, the tax collector must give notice of the sale (including the time of sale) at least 30 days before the sale by:

  • publishing a notice in a newspaper for three weeks, or
  • posting a notice at the county courthouse and in a public place for at least three weeks (Ala. Code § 40-10-12).

Your Right to Appeal the Probate Court Decision

You have 30 days after the court authorizes the sale to appeal the decision to the county circuit court. If you lose, the lender's costs of fighting the appeal will be added to the tax lien (Ala. Code § 40-10-25).

The Tax Sale

In Alabama, the high bidder at the sale doesn’t actually get title to the property. Instead, he or she gets something called a tax lien certificate. This gives the high bidder the right to collect the tax debt. But first, the sale must be confirmed.

  • Within ten days after the sale, the tax collector files a report with the probate court asking it to confirm the sale (Ala. Code § 40-10-13).
  • You have five days to object to the report. If the court doesn’t agree with your objections and it finds that the tax collector followed the correct legal procedures in the sale, it will confirm the sale. The tax collector will then give the high bidder a “certificate of purchase” (Ala. Code § 40-10-13).

Who Gets Possession of the Home After the Sale

The holder of the certificate of sale is entitled to possession of the home.

Right of the state to possession of the home.  If the State of Alabama is the high bidder at the sale, it is entitled to possession of the home as soon as the judge signs the certificate. To actually obtain possession, the state must first demand possession of the home from you. If you don’t move out within six months after the sale date, the state can start an eviction action against you (Ala. Code § 40-10-73).

Right of a purchaser (other than the state) to possession of the home.  If another party is the high bidder at the sale, that party is entitled to possession of the home as soon as he or she receives the certificate. To obtain possession, it must first make a demand that you give up possession of the home. If you don’t move out within six months of the demand, that party can start an eviction action against you (Ala. Code § 40-10-74).

Even if the high bidder from the sale takes possession of the home, you can still get it back by redeeming it.

Your Right to Get the Home Back After the Tax Lien Sale in Alabama

Under Alabama law, you can generally get your home back within three years after the tax lien sale by reimbursing the holder of the certificate of purchase for the full amount he or she paid at the sale, plus interest and certain costs (Ala. Code § 40-10-120). This is called redeeming the home. (An owner who retains possession may redeem without a time limit.) (Ala. Code § 40-10-82).

If you don’t redeem, the holder of the certificate of purchase gets title to the home (Ala. Code § 40-10-29). (Learn more in  Getting Your Home Back After a Property Tax Sale in Alabama.)

Land Commissioner May Foreclose Instead

If you fall behind in your property taxes, you might face foreclosure instead of a tax lien sale. This is because in Alabama, the Land Commissioner (the official that has control over all property acquired by the state through tax sales and tax foreclosures) may declare the delinquent tax amounts due and payable and file a foreclosure lawsuit on behalf of Alabama (Ala. Code § 40-10-141).

If this happens, the foreclosure will proceed just as if your mortgage lender is foreclosing judicially. The court will determine the total amount you owe, enter a judgment, and order the home sold. (You can find more detailed articles on various aspects of Alabama foreclosure law in Nolo’s  Alabama Foreclosure Law Center.)

If no one bids a sufficient amount for the home at the sale (that is, enough to cover the full amount of the judgment), the state of Alabama gets a deed to the home (Ala. Code § 40-10-141).

Finding Alabama’s Tax Sale Laws

The citations to Alabama’s tax sale statutes are: Alabama Code § § 40-10-1 to 40-10-198.

You can find the Alabama Code on the Alabama legislature’s website at  http://alisondb.legislature.state.al.us/acas/ACASLoginfire.asp. (If you need help finding the statutes, see Nolo’s  Legal Research FAQs & Basic Info  area.)

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