People who own real property have to 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 the homeowner's behalf through an escrow account. But if the taxes aren't collected and paid through this kind of account, the homeowner must pay them directly.
When homeowners don't pay their property taxes, the overdue amount becomes a lien on the property. A lien is a claim against your property to ensure you'll pay the debt; it 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, after you become delinquent in paying the real property taxes on your West Virginia home, the sheriff can hold a tax lien sale and the purchaser can eventually get ownership of the home.
But the winning bidder from the sale can't get ownership of your home right away; you'll get some time to get caught up on the overdue amounts before that happens. If you don't pay off the debt during what's called a "redemption period" after the sale, though, you'll eventually lose the property permanently.
In West Virginia, the first installment of taxes is due on September 1st and becomes delinquent on October 1st. The second installment is due on the following March 1st and becomes delinquent on April 1st. (W. Va. Code § 11A-1-3).
The tax lien, including interest and other charges, attaches to the home on July 1st. (W. Va. Code § 11A-1-2). The sheriff (who collects the taxes) can then sell the lien at a tax lien sale, which is a public auction, sometime after October 14 and before November 23. (W. Va. Code § 11A-3-5). The property is sold to the highest bidder who pays at least the amount of taxes, interest, and charges. (W. Va. Code § 11A-3-14).
The high bidder gets a certificate of sale. (W. Va. Code § 11A-3-14). If no one makes a bid, the sheriff will issue the certificate to the state auditor. (W. Va. Code § 11A-3-5, § 11A-3-8).
The sheriff will send you (the taxpayer), by certified mail, a notice of the delinquency along with the sale date no less than 30 days before the sale. The sheriff must also publish the notice in a newspaper or, if a newspaper isn't available, the sheriff will post the notice in a public place. (W. Va. Code § 11A-3-2, § 59-3-2).
Many states give delinquent taxpayers the chance to pay off the amounts owed and keep the home. This process is called "redeeming" the property.
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, though, the redemption period happens before the sale.
In West Virginia, you can redeem your home at any time before the tax deed is issued (see below). (W. Va. Code § 11A-3-23). People generally get around 18 months to redeem after the sale. Though, your redemption period might be different.
To redeem, you must pay the owed taxes, interest, and various other amounts. (W. Va. Code § 11A-3-23).
At any time after August 31st of the year after the sheriff's sale, and on or before October 31st of that same year, the purchaser has to prepare a list of those to be served with notice of the right to redeem and request the state auditor to prepare and serve the notice. (W. Va. Code § 11A-3-19). The auditor must send you the notice on or before the 30th day following the request. (W. Va. Code § § 11A-3-19, 11A-3-22).
To get title to the home, the purchaser must request a deed. The earliest that the lien purchaser can get the tax deed from the county clerk is April 1st of the second year after the sheriff's sale. (W. Va. Code § 11A-3-21).
Tax liens expire 18 months after being sold. Under West Virginia law, a lien evidenced by a tax certificate of sale can't remain a lien on the real property for a period longer than 18 months after the original issuance of the tax certificate of sale. (W. Va. Code § 11A-3-18). So, generally, if the purchaser doesn't apply for a deed and the lien expires, the purchaser's rights are forfeited, and the purchaser loses the chance to get title to the property. However, in some circumstances, the purchaser can get an extension. (W. Va. Code § 11A-3-18).
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 you lose your home through a tax deed process, mortgages get wiped out. 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 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.
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 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.
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 lien sale in West Virginia and have questions or need help redeeming your property, consider talking to a foreclosure lawyer, tax lawyer, or real estate lawyer.