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

If you're delinquent on property taxes in Oklahoma, you could lose your home.

People who own real property must pay property taxes. The government uses the money that these taxes generate to pay for schools, public services, libraries, roads, parks, and the like. Typically, the tax amount is based on a property's assessed value. If you have a mortgage on your home, the loan servicer might collect money from you as part of the monthly mortgage payment to later pay the property taxes. The servicer pays the taxes on your behalf through an escrow account. But if the taxes aren't collected and paid through this kind of account, you must pay them directly.

When homeowners don't pay their property taxes, the overdue amount becomes a lien on the property. A lien effectively makes the property act as collateral for the debt. All states have laws that allow the local government to sell a home through a tax sale process to collect delinquent taxes. Accordingly, in Oklahoma, if your property tax payment is three or more years delinquent, you could potentially lose your home to a tax sale.

Fortunately, a tax sale usually only happens if you don't respond to notice from the county treasurer about getting caught up. But if you let the tax sale go through, you'll most likely lose ownership of your property. So, if you want to keep your Oklahoma home, it's essential that you take steps to deal with the unpaid taxes before the sale is finalized.

What Happens If You Don't Pay Oklahoma Property Taxes

In Oklahoma, under normal circumstances, if you don't pay your property taxes for three or more years, the county treasurer can sell your home to satisfy the unpaid debt. (Okla. Stat. Ann. tit. 68 § 3105, § 3125).

Notice of the Tax Sale

The county treasurer will send you (the record owner of the property) a notice by certified mail at least 30 days before the sale. The county treasurer must also publish notice of the sale in a newspaper once a week for four weeks. If the county doesn't have a newspaper or if it refuses to publish the notice, the information must be posted at the courthouse. (Okla. Stat. Ann. tit. 68 § 3127).

How Tax Sales in Oklahoma Work

The tax sale consists of a public auction where the county treasurer sells the home to the highest bidder. The winning bid must be at least equal to the lesser of:

  • two-thirds of the property's assessed value or
  • the total amount of taxes, penalties, interest, and costs due. (Okla. Stat. Ann. tit. 68 § 3129).

If no one bids the minimum amount, the treasurer bids off the property in the name of the county, and the county gets the home. (Okla. Stat. Ann. tit. 68 § 3129, § 3131). After the sale, the high bidder or the county gets a deed (title) to the home. (Okla. Stat. Ann. tit. 68 § 3131).

Redeeming the Property After a Tax Sale

In many states, the homeowner can redeem the home after a tax sale by paying the buyer from the tax sale the amount paid (or by paying the taxes owed), plus interest, within a limited amount of time. Exactly how long the redemption period lasts varies from state to state, but usually, the homeowner gets at least a year from the sale to redeem the property.

In other states, the redemption period happens before the sale.

Right to Redeem in Oklahoma Happens Before the Sale

In Oklahoma, a redemption must happen before the county treasurer executes the deed to the new owner. (Okla. Stat. Ann. tit. 68 § 3113). So, most homeowners in Oklahoma don't get the right to redeem once the new owner gets a deed to the property.

Limited Right to Redeem Following a Tax Sale in Oklahoma

Only under very limited circumstances will you get some additional time to redeem: Minors and incapacitated (or partially incapacitated) persons may redeem within one year after the expiration of such disability. (Okla. Stat. Ann. tit. 68 § 3113).

Does a Mortgage Survive a Tax Sale in Oklahoma?

Property tax liens almost always have priority over other liens, including mortgage liens and deed of trust liens. (For purposes of this discussion, the terms "mortgage" and "deed of trust" are used interchangeably.) Because a property tax lien has priority, if your home is sold through a tax sale, the sale wipes out any mortgages. So, the loan servicer will usually advance money to pay delinquent property taxes to prevent this from happening. The servicer will then demand reimbursement from you (the borrower).

The terms of most mortgage contracts require the borrower to stay current on the property taxes. If you don't reimburse the servicer for the tax amount that it paid, you'll be in default under the terms of the mortgage, and the servicer can foreclose on the home in the same manner as if you had fallen behind in monthly payments.

Your Servicer Might Set Up an Escrow Account

After demanding repayment of the amount it paid for the taxes, penalties, plus interest (and assuming you repay this tax debt), your servicer will probably set up an escrow account for the loan. Each month, you'll have to pay approximately one-twelfth of the estimated annual cost of property taxes—and perhaps other expenses, like insurance—along with your usual monthly payment of principal and interest. This money goes into the escrow account. The loan servicer then pays the cost of the taxes and other escrow items on your behalf through the escrow account.

The downside to having an escrow account is that you'll have to make a bigger payment to the servicer each month. On the positive side, having an escrow account saves you from having to come up with a large amount of money when tax bills, and perhaps other bills, are due.

Getting Help

If you're having trouble paying your property taxes, you might be able to reduce your tax bill or get extra time to pay. If you're already facing a property tax sale in Oklahoma and have questions or need help redeeming your property, consider talking to a foreclosure lawyer, tax lawyer, or real estate lawyer.

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