Property Tax Liens In Delaware
Property Tax Liens In Delaware are “redeemable deeds”.
The state has three counties and the rules change according to the county in which you are investing.
Therefore, you will be dealing with Sussex County, Kent County or New Castle. They conduct “monition sales”. Delaware offers “tax deeds” to investors as opposed to “tax liens”.
The Sheriff conducts the tax sales. If you purchase a “tax deed” at a monition sale you are the owner of the property.
However, it is subject to the property owner being able to redeem his or her property. They have 60 days from the day the court approves the sale to redeem their property.
In the alternative, State statutes allow the three counties a method to conduct a tax sale without an original judgment. If you bought a tax deed in this manner the property owner has a one year redemption period.
In counties, that conduct a tax sale as a result of first getting a judgment they have to wait a one year period prior to the sale.
Pay attention to how the tax sales are conducted. If pursuant to a court judgment which gives the property owner a 60 day redemption period you are entitled to a 15% penalty should the property be redeemed.
The county could possibly conduct the alternative method sale. In this situation the property owner gets a full year to redeem and you would earn a 20% interest rate should they redeem.
Sometimes a sale is overturned by the court. Therefore, you will be refunded ONLY your bid amount WITHOUT a penalty.
The Sheriff conducts the tax sales in Sussex County on the third Tuesday or every month at 9:30 AM at the Sheriff’s Office.
The tax monition sales are typically done pursuant to a judgment. This also gives the property owner only a 60 day redemption period.
There is no pre-registration. But you must register the morning of the sale and requires a $4,000.00 deposit to get a bidder’s number. 20% of the sales price is due immediately and the $4,000.00 deposit goes towards your purchase. You have until 3:00 PM that very day to pay the balance.
New Castle County sales differ in one respect. The full amount of the purchase price is due at the sale. Thus, you have no time to obtain the remaining funds. They conduct their sale pursuant to a judgment and the property owner has 60 days to redeem.
In Kent County, they typically conduct tax sales every three months. They require a $2,000.00 deposit by cash or certified check FOR EACH property purchased at the time bidding closes but do allow time to pay the balance by 2:00 PM that same day.