If you own real estate in Wisconsin, you are familiar with the annual property tax bills that arrive in the mail each December. You are also aware that you are required to pay your tax installments to the County Treasurer by January 31st and/or July 31st of each year. When a landowner does not pay property taxes for that year, the local County Treasurer will issue the landowner a tax certificate for the delinquent taxes.
Generally, the landowner has a two-year period to pay delinquent taxes and redeem their property from the County. After those two years have passed and a landowner has failed to pay taxes to redeem the property, the County may obtain the property by 1) recording a tax deed with the Register of Deeds, 2) foreclosing the tax certificate, or 3) foreclosing the tax liens against the property. During each of these processes, the landowner has another chance to reclaim the property. Under the first process, the owner may reclaim the property any time before the County Treasurer records the tax deed. Under the second process, the owner may reclaim the property before the property is sold at a foreclosure sale. Under the third process, the owner may reclaim the property within eight weeks after the County Treasurer publishes notice of the foreclosure of the tax liens in the newspaper.
If the owner misses any of these opportunities to reclaim the property, the County will acquire title to the property through one of the three above-described processes. Once the County acquires the property, the County may sell the property to a willing buyer. At this point, the owner’s very last option to reclaim their property is to purchase it back from the County.
But is that really the last chance? If the County acquires the property by recording a tax deed, the owner has an additional three years from the date of recording to commence an action to reclaim the property. The original owner would need to be successful in obtaining a judgment against the County, which can involve a long and costly litigation process.
So, what does this all mean for buyers who purchase unredeemed property from the county? Buyers should be aware of the risk that the original owner has three years to commence an action to recover the possession of the property, even after the buyer purchases the property from the County. Although the likelihood that an original owner would go through the time and expense of commencing a civil action is very low, buyers must be aware of the three-year risk and should consider the risk as they decide to purchase the property.
