Frequently Asked Questions

Tennessee Tax Sale Process

Getting Started







Tax Sale Process



What does a tax sale confer to the tax sale purchaser?

A tax sale confers on the tax sale purchaser full ownership of the tax sale property, free of ownership and other interests, claims or encumbrances held by all duly notified persons subject to the right of redemption. Tax sale properties are sold to the public for the amount of delinquent taxes due, plus any accrued interest, penalties, costs and other statutory impositions.


Who knows about the tax sale?

Pursuant to T.C.A. 67-5-2502, a diligent effort is made to give actual notice of the tax sale proceedings to all interested persons, as identified by the searches described by the Tennessee Code. The tax sale is also announced to the public through publication in a local newspaper of general circulation.


How does a tax sale work?

Properties having tax delinquencies are offered at auction to the public, with the total amount delinquent due as the opening bid. The property is sold to the highest bidder. The delinquent taxpayer has a specified time within which to redeem the property. At any time within the specified redemption period from the date of the order confirming sale, any person with a legal or equitable interest in the property sold at tax sale may “redeem” that property by paying all charges which have accrued on it (delinquent taxes, interest and penalties, court costs, and court ordered charges), as well as interest on the entire purchase price paid by the purchaser of the parcel at tax sale. The interest shall be at the rate of twelve percent (12%) per annum, which shall begin to accrue on the date the purchaser pays the purchase price to the clerk and continuing until a motion to redeem is filed.



Can the political subdivision remove properties offered from the auction?

Yes. The political subdivision reserves the right to withdraw from the auction any property listed at any time prior to the closing of the auction.
If the political subdivision determines that the tax sale should not have occurred due to circumstances outside of its control, it reserves the right to rescind the sale prior to the confirmation of the sale or following the confirmation of the sale reserves the right to petition the Chancery Court to rescind the sale and refund the tax sale purchaser the tax sale purchase price.




What happens if an online bidder does not make the highest bid?

As expected the property will be sold to the highest bidder. The political subdivision makes the opening bid. If that opening bid is not at least matched by an online bidder, or the Shelby County Commission has instructed the political subdivision not to bid, the property will be sold to the political subdivision.


How do I identify vacant lots?

A parcel with a "0" street number and a street name is a vacant lot; however some parcels with an actual number and a street name are actually vacant lots.


Bidding Process


When

You may bid on all properties only during auction hours.


How

Bidding on properties is accomplished via the full property description and details page. Users must have a valid bank account registered to bid on properties.


Type

This is an open bidding process. Participants will submit bids with knowledge of the value of the competing bids on the property. Additionally, if you placed a bid on a property and are outbid, you will be notified by email or by text.


Questions by Investors Before Purchasing


How do I know which properties have been sold?

All properties will be available for sale until the close of the auction.

However, the political subdivision reserves the right to withdraw from the auction any property listed at any time prior to the closing of the auction. If a property is withdrawn from the auction, it will be indicated as such on its full property description and details page.




How can I view a property?

Properties can be viewed from the home page or from the property's full description and details page.
For additional information for "Memphis City Taxes" searches should use the property location or the owner name.
For "Shelby County Taxes" searches should use the parcel number, owner name or property location.


What payment methods are accepted?

Payment must be made via ACH using a registered bank account. Please call us to arrange a wire transfer. A processing fee will apply per additional wire, if not paying in one installment.


Questions by Investors After Purchasing



Does payment have to be one installment?

Yes. Payment is made by one installment within 1 business day of the close of the auction. Wire transfers may be made in more than one installment, but a fee will apply for each additional installment.



When is the sale final?

Insofar as bidding is concerned, bids cannot be received after conclusion of the auction. Insofar as transfer of title to the real estate sold is concerned, title does not pass to the Buyer until the order confirming the sale has been entered by the Court that ordered the sale.








What happens if the property still has a mortgage? Do I assume the mortgage?

No. The tax sale purchaser is not responsible for any mortgage on the property. The mortgage holder has been given notice that the property has overdue taxes and the mortgage holders has the right to redeem the property.

You should obtain legal advice as to your rights and obligations as a tax sale purchaser.






What Type of Document is Issued and Registered Following Purchase of Shelby County Property at Tax Sale?

Tennessee Code Annotated §16-1-109 states that the decree of the Court (i.e., Order) has the same force and effect as a conveyance by the party, and shall be registered. Due to upcoming changes in Tennessee law, the Chancery Court Clerk and Master will no longer honor requests to issue Clerk and Master Tax Deeds following sale. Preparation and issuance of these deeds will be discontinued starting with properties sold at tax sale in 2017. In its place, Chancery Court will record for the purchaser in the Office of the Shelby County Register a signed Order Confirming Sale for their individual parcel. As purchaser, your separately-signed Order Confirming Sale will be in your name with a reservation for a stated redemption period allowed by law. If the property is later redeemed before the expiration of the redemption period, an Order of Redemption will likewise be issued and registered in the Office of the Shelby County Register to denote the transfer of the property back to the delinquent taxpayer.


Questions by Investors Regarding Redemption



Do I have to make repairs to the property?

See T.C.A. 67-5-2701 for those situations that may require action to immediately bring the property into compliance with applicable building codes or zoning regulations or situations to avoid permissive waste of the parcel. Always obtain legal advice before making a decision that you have to make repairs to the property.


How long does the previous owner have to redeem their property?

See T.C.A 67-5-2701. The redemption period is established by the number of years of taxes due and owing. The greater the number of years of taxes due and owing, the less time a delinquent taxpayer is given to redeem the property. Each property carries its own redemption period. At any time within the specified redemption period from the date of the order confirming sale, any person with a legal or equitable interest in the property sold at tax sale may “redeem” that property by paying all charges which have accrued on it (delinquent taxes, interest and penalties, court costs, and court ordered charges), as well as interest on the entire purchase price paid by the purchaser of the parcel at tax sale. The interest shall be at the rate of twelve percent (12%) per annum, which shall begin to accrue on the date the purchaser pays the purchase price to the clerk and continuing until a motion to redeem is filed.


When will I be reimbursed in the event the previous owner redeems the property?

As noted above, at any time within the property’s specified redemption period from the date of the order confirming sale, any person with a legal or equitable interest in the property sold at tax sale may “redeem” that property. However, the redeemer must submit all charges which have accrued on it (delinquent taxes, interest and penalties, court costs, as well as court- ordered charges submitted by the purchaser, if any), as well as interest on the entire purchase price paid by the purchaser of the parcel at tax sale. When the order pertaining to redemption becomes final, the clerk shall make such disbursements as are provided in the order.


Questions by Owners Before the Sale



What can I do to keep my property from being sold at tax sale?

You can only prevent your property from being sold at a tax sale if you (1) are a member of the United States military on active duty and notify the Trustee/collector of your active military status, pursuant to 50 U.S.C. § 561; (2) pay the overdue taxes and/or liens no later than the day before the opening of the tax sale; or (3) file for bankruptcy.


Questions by Owners If Your Property Was Sold




Tax Sale Definitions


Ad valorem tax

(Latin for "according to value") means a tax based on the value of real estate or personal property.


Minimum bid

means the bid to be accepted in tax sales shall be at least equal to the taxes, interest, penalties, costs and fees as set forth in the Order Ordering Sale; otherwise, the Clerk and Master shall bid in tax sale to the property for the political subdivision.


Bid

means, for the purposes of tax sale, an offer to acquire property at a tax sale.


Bidder

means, for the purposes of tax sale, a person making a bid.


Certified funds

means a form of payment that is guaranteed to clear or settle by the company certifying the funds.


means, in computing, a small piece of text stored on a user’s computer by a web browser.



Governmental lien

means all liens imposed by law upon property in favor of any political subdivision.


Interested person, person owning an interest in a parcel and "owner"

means a person, including any governmental entity, that owns an interest in a parcel and includes a person, including any governmental entity, that holds a lien against a parcel or is the assignee of a holder of such a lien. "Interested person" also includes a person or entity named as nominee or agent of the owner of the obligation that is secured by the deed or a deed of trust and that is identifiable from information provided in the deed or a deed of trust, which shall include a mailing address or post office box of the nominee or agent. However, a person named as a trustee under a deed of trust, contract lien or security instrument, is not included in such definition unless the person has a separate interest in the parcel.


means the giving of a formal opinion regarding the substance or procedure of the law by an officer of the court, such as an attorney.


Lienholder

means the person or entity having a lien against the tax sale property. Such person or entity can include but is not limited to a mortgagee or judgment lienholder or another taxing authority.


Open bidding

means, for the purpose of tax sale, the ability for competing bidders to see the prevailing winning bid amount.


Owner

means a person who holds an ownership interest.


Political subdivision

means any of the following to the extent it has the power to levy ad valorem taxes and conduct tax sales for failure to pay ad valorem taxes: (a) The state. (b) a county. (c) Any incorporated municipalities.


Property

means, for the purpose of tax sale, tax sale property.



Register of Deeds

means the office that records all legal instruments that affect the transfer of real estate property.


Redeem

means performing the act of Redemption.


Redemption

means the legal mechanism in which a property owner may pay the Chancery Court Clerk the tax sale purchase amount, plus interest and any other amount as provided by the Chancery Court as a condition for the property owner to reacquire title to the tax sale property.


Redemption period

means the period in which a person may redeem property as provided in TCA 67-5-2701. The redemption period commences on the date the Order Confirming the Tax Sale is entered by the court.


Send

means either of the following: (a) To deposit in the mail or deliver for transmission by any other commercially reasonable means of communication with postage or cost of transmission provided for, and properly addressed to any address reasonable under the circumstances. (b) In any other way to cause to be received any written notice within the time it would have arrived if properly sent.


Successful bidder

means, for the purpose of tax sale, the individual who bid the highest amount on a tax sale property.


Tax Collector

means the Shelby County Trustee or, where applicable, the City Treasurer.


Tax sale

means the sale property pursuant to TCA 67-5-2401 et seq.
A tax sale is the sale of properties that have delinquent taxes due and owing the political subdivision. These properties are sold for the amount of delinquent taxes due, plus any accrued interest, costs and other fees. If a property is sold at tax sale, the property owner has the right to redeem the property from the purchaser as defined in TCA 67-5-2701.


Tax sale property

means property for which tax sale title is sold pursuant to TCA 67-5-2701 et seq.


Tax sale purchase price

means, for the purpose of tax sale, the total amount paid or to be by the winning bidder at tax sale.


Tax sale purchaser

means the purchaser of tax sale property, his successors, and assignees.


Total delinquent amount due

means, for the purpose of tax sale, the total tax, interest, penalties, costs and fees due by the property owner to the political subdivision causing the property to be offered at tax sale.


Winning bid

means, for the purpose of tax sale, the highest bid at the conclusion of the bidding process.


Disclaimer


Statement

The foregoing questions and answers are not intended as legal advice. While the information provided is believed to be accurate, auction participants are advised to educate themselves and/or to obtain the advice of an attorney as to the law and their legal rights. Property owners of auctioned property are advised to obtain the advice of an attorney as to their legal rights and obligations.