A Look at Florida Tax Deeds and Auction Sales

In the following article, Florida probate attorney Bruce A. McDonald discusses the state’s laws regarding tax deed sales of real property and how it affects not only the duties of circuit court clerks but also the feasibility of tax deed sales in Florida.

Another Problem for Tax Deeds

by Bruce A. McDonald

Some days it must be no fun being a circuit court clerk, I’m sure. You have to watch all these statutory requirements in all kinds of cases, and you do your best to follow the law precisely. Then the supreme courts of Florida and the United States hand down decisions that invalidate a lot of judicial sales you’ve conducted carefully under a statute by declaring the statute unconstitutional as applied. That must be like a contractor following the plans and specs to the letter, only to be told that they were given the wrong address for the house. Not your fault but still not a good feeling.

Changes in the Florida Law

That’s what Florida clerks are experiencing with tax sales under chapter 197, Fla. Stat. Until 2005, successful bidders in tax sales in which the former owner was not given actual notice could rely on Alwani v. Slocum, 540 So. 2d 908 (Fla. 2d DCA 1989), rev. denied 548 So.2d 662 (Fla. 1989), which rejected a challenge to a tax deed issued after notice was sent to the wrong address, but was sent according to the statute. Alwani has been followed in other cases, including Kidder v. Cirelli, 821 So.2d 1106 (Fla. 5th DCA 2002).

However, Judge Charles M. Harris, dissenting in Kidder, correctly predicted the constitutional cliff over which reliance on the tax deed statute was going to fall: “The majority holds that the owner’s failure to know and to notify the tax collector that the tax collector’s records reflect a defective address for the owner of a particular piece of property forfeits such owner’s constitutional right to notice in the event a tax sale is scheduled.”

That same Fifth District changed its tune in the en banc decision in Rosado v. Vosilla, 909 So. 2d 505 (Fla. 5th DCA 2005), in which it followed Judge Harris’ argument in Kidder and held that statutory notice did not meet due process standards. It certified conflict with Alwani.

U.S. Supreme Court Weighs In

However, in April, 2006, before the Rosado-Alwani conflict could be resolved, the U.S. Supreme Court issued its opinion 5-3 in Jones v. Flowers, 547 U.S. 220, 164 L.Ed.2d 415 (2006), holding that when a mailed notice of a tax sale is returned unclaimed, the state, as a matter of due process, must take additional reasonable steps to attempt to provide notice to the property owner before selling the property, if it is practicable to do so. Justice Roberts, writing for the majority, wrote:

“[W]e do not think that a person who actually desired to inform a real property owner of an impending tax sale of a house he owns would do nothing when a certified letter sent to the owner is returned unclaimed. If the Commissioner prepared a stack of letters to mail to delinquent taxpayers, handed them to the postman, and then watched as the departing postman accidentally dropped the letters down a storm drain, one would certainly expect the Commissioner’s office to prepare a new stack of letters and send them again. No one “desirous of actually informing” the owners would simply shrug his shoulders as the letters disappeared and say “I tried.” Failing to follow up would be unreasonable, despite the fact that the letters were reasonably calculated to reach the intended recipients when delivered to the postman.”

An Update from the Florida Supreme Court

When the Jones v. Flower opinion was issued, the Florida Supreme Court was nearing the end of its deliberation on resolving the conflict between Rosado and Alwani. Justice Pariente, writing for a unanimous state Supreme Court, relied in heavy part on the Jones decision, quoting the postman language quoted above. The opinion affirmed the ruling of the Fifth District in Rosado, finding that strict application of the notice statute by the clerk of court under the facts of that case did not meet due process scrutiny.

“We conclude, as did the Fifth District, that the notice sent to the Rosados was not reasonably calculated to apprise them of the tax deed sale. Under the “practicalities and peculiarities” of this case, . . . due process required that the clerk of court take additional reasonable steps to notify the Rosados of the tax deed sale prior to selling their property, such as checking to determine whether a change of address had been submitted. As in Jones, the fact that due process required the clerk of court to take additional reasonable steps to provide notice is measured against the backdrop of such a significant and irreversible prospect as the loss of a house.”

What “Reasonable Steps” Do the Court Clerks Have to Take?

So now the law is clear, which is that the duty of the court clerks is very unclear. Clearly, they cannot rely on the statute, but they must exercise “reasonable steps” to give notice to the owner. What are those? In Rosado, the fatal flaw was the failure of the clerk to check the current tax roll for the updated address (which the tax collector also failed to do). But while the clerk is checking that online, why can he or she not take a few more minutes to search as would one “desirous of actually informing” the owners, to use Justice Roberts’ words? In this era of impressive online databases (including those of the State of Florida), internet searches and people-finding firms, what exactly are “reasonable steps” to find the current address of a taxpayer who is about to lose his or her property to a tax sale? When can a clerk safely say “enough is enough” and proceed with the sale?

Effects of Ruling on Florida Tax Deed Sales

Tax deed sales appear to be declining in popularity in Florida, as evidenced by the growing number of tax certificate holders who simply sit on their investment and take no action within the seven-year life of their certificate. Partially that is due to the universal requirement of a quiet-title lawsuit by the tax deed holder in order to gain a marketable title. Partially it is due to the throngs of bidders who tend to show up at judicial sales, having bought the books and tapes on how to make money in such real estate sales and whose presence lessens the chance of any real “bargain” purchase.

Now that the holders of tax deeds have seen them invalidated in cases such as Rosado and Jones, potential tax sale bidders have the added worry as to whether their tax deed will “hold up” if the defendants in the quiet title action counter-sue and attack the validity of a process that did not give them actual notice of the tax deed action.

Could we actually see a tax deed sale of valuable property at which no one bids anything? That type of fiasco might put some pressure on the legislature to adopt some clear notification procedure that passes constitutional scrutiny.

Speak with Our Florida Probate Attorneys

As demonstrated above,  our probate attorneys are familiar with the Florida laws regarding tax deed sales and how they can be challenged. Our lawyers can apply this knowledge to probate administration cases, especially those involving real property and tax issues.

At Statewide Probate, we offer reasonable probate administration fees, which are often lower than the statutory rate in the state. Don’t spend more than you have to when dealing with probate property. Schedule a free estate consultation today. We proudly serve probate administration clients in Pensacola, Fort Lauderdale, Tallahassee, Miami, West Palm Beach, and throughout Florida.