Kentucky Tax Liens

Kentucky Tax Liens
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In 2009, the Kentucky legislature passed a bill changes the law regarding tax liens and made it much less competitive for larger institutions to bid on tax liens and put alot of the noticing requirements onto the purchaser.

Kentucky Tax Lien Certificates

Tax liens in Kentucky earn a 12% simpler interest rate which is accrued at 1% per month.  In addition to the interest, the tax lien investor can collect expenses related to collecting on the liens including a $100 administrative fee, pre-complaint attorney fees (capped by lien size) and all attorney fees regarding foreclosure.

Kentucky puts a large burden on the tax lien investor to notify the delinquent taxpayer and all parties of interest.  My advice would be to hire an experienced tax lien attorney early on in the process since most of their fees will be recovered if and when the tax lien redeems.

Kentucky Noticing Requirements

First, you’ll need to get the current address from the county on the owner of record.  They will charge you a couple dollars for this information.  You’ll then need to send a first class letter out (be sure to keep a proof of mailing receipt) within 50 days.  After one year, you can begin foreclosure.  However, 45 days before you actually have your tax lien attorney file this foreclosure, you will need to send out another noticing letter informing the owner that you intend to foreclose on their property.

 Kentucky Auction Format

Why is Kentucky great for individual investors?  Because they hold a lottery-style auction.  This means that everyone has a fair chance to bid on the available liens.  Furthermore, one bidder cannot represent more than one bidding entity and one entity cannot be represented by more than one bidder.  In other auctions, some investment firms will flood the auction with many bidders giving them a huge advantage.

The sales are normally held in July and August and will be announced about a month prior by the county clerk. If you own a prior lien on the property, you will have priority to purchase these subsequent taxes before it is available to other bidders.

 

 

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