Q. What is a Tax Sale? A. The legal process of selling property for the unpaid taxes is commonly called "Tax Sale." A Tax Sale is held at a time, place and location ordered by the Chancery Court and it is a public auction. Q. Is there public notice of a Tax Sale? A. Yes. A tax sale notice describing the property to be sold and advertising the time, place and location of the sale is published in a local newspaper no less than twenty (20) days before each tax sale. Q. Do I have to attend the Tax Sale to buy the property? A. Yes, the tax sale is a public auction, so you have to attend the auction to bid on and buy the property. Q. What is the minimum bid amount? A. The minimum bid amount is different for each property. The minimum bid amount includes the total amount owed to the City of Memphis for taxes and charges, and will also include a Court Commission. Q. Will the property have any liens against it? A. Yes. The property is sold "subject to" any existing Shelby County tax liens. Also, the property may be sold subject to the current year City of Memphis taxes (if they are not included in the minimum bid amount). The terms of the sale for each specific parcel are listed in the Order for Sale. All other liens are dismissed from the property through Tax Sale. Q. How much will the property cost at Tax Sale? A. The final sale price depends on the bidding. Bidding begins with the minimum bid amount. After bidding starts, the Court Clerk continuously offers the property at successively higher bid amounts until the bidding stops. The highest bidder buys the property. Q. What are the terms of the Sale? A. Cash, and subject to the equity of redemption (one year). Q. Can I pay the Court Clerk with a personal check? A. No. The Court Clerk only accepts cash, cashier's checks or money orders. The Court Clerk requires full payment within 24 hours of the tax sale. If you made a deposit with the Court (sent with an application), that deposit is credited to your purchase. Bring your deposit receipt to the Tax Sale. Q. What if the current owner pays the delinquent taxes before the tax sale? A. If the current property owner pays the delinquent taxes before the tax sale then the property can not be sold at tax sale. The applicant will receive his/her money back from the Court, without interest. Q. What if the Court does not sell the property I want? A. You will get your money back (without interest) from the Court Clerk. You will need your deposit receipt from the Court Clerk when requesting a refund. Q. What proof will I receive of deposit from the Court Clerk? A. The Chancery Court Clerk will either mail or give you a receipt for your payment. You must keep your receipt as proof of payment. You will present the receipt (or a copy) when requesting your refund. Q. Is there a "Redemption Period" for tax sale properties? A. Yes, the prior owner has the right to redeem the property for one year after the entry of the Order Confirming the Tax Sale. Q. When does the redemption period begin and end? A. The redemption period begins on the date of the Order Confirming the Sale. It ends a year after that date. If you succeed in purchasing land at tax sale, an attested copy of the Order Confirming the Sale will be sent to you via US Mail, the day after it is entered at Court. The date of the Order can usually be found under the Chancellor's signature at the bottom of the Order. Q. Will I get my money back if the property is redeemed? A. If property is redeemed, the purchaser at tax sale is to receive his or her purchase money back (ie: amount paid at tax sale) plus interest on the purchaser price at the rate of ten percent (10%) per annum on the entire purchase price paid at the tax sale. Interest is computed from the date of the sale. [T.C.A. § 67-5-2703]. Q. How long does the redemption process take? A. It varies. You may want your attorney to be involved. Required steps include: the filing of a Petition by the prior owner; notification by the Court to the Purchaser of the Redemption; an Agreement by the Purchaser agreeing to the Redemption; a Hearing about the Redemption; and an Order for Redemption. The process takes longer if there are reimbursement claims. Q. How will I know a Redemption Petition has been filed with the Court? A. After the prior owner files a Petition to Redeem with the Court, the Court Clerk will send the purchaser a notice about the redemption. [TCA § 67-5-2704.] Q. How will I get a Tax Sale Deed? A. You can apply for a Deed with the Chancery Court Clerk. A Tax Sale Deed can be issued after the Order Confirming the Tax Sale, Divesting and Vesting Title is decreed by the Court. Application for a Tax Sale Deed is made to the Chancery Court Clerk, 140 Adams Avenue, Memphis, Tennessee 38103, Attn: Bookkeeping. The fee is $20.00 paid with cash, cashier's check or money order. It is a good idea to register all deeds with the Shelby County Register, 160 N. Main, Memphis, Tennessee 38103. Q. When is property the subject of a tax lawsuit? A. The City of Memphis files a new tax lawsuit in Chancery Court each Spring on property taxes more than a year delinquent. Each year of taxes has it's own lawsuit. Each lawsuit is a "tax sale" lawsuit. Property can be sold at tax sale based on any unpaid year. Q. How will I know if my property is being sold at tax sale? A. Both the prior owner and the prospective purchaser will receive a final notice in the mail, advising them of the time, date and place of the tax sale of the affected property, and the minimum bid amount. Q. Can the current property owner avoid tax sale foreclosure? A. The current property owner can avoid tax sale foreclosure by paying his/her delinquent taxes prior to the tax sale. Once a property tax is delinquent and sued on in Court, it is already part of a tax sale suit and can be sold at any time (even without a request). Each tax year owed is included in a different "Tax Sale" lawsuit. Payment of all delinquent taxes for all tax years will ensure that a property will not be sold at tax sale. Q. At what rate do interest & penalties accrue on taxes? A. Interest & penalties accrue at 18% per annum on the base tax amount. Interest & penalties are added at the beginning of each month, and begin accruing as soon as the taxes are delinquent. Q. What are the lawsuit charges and when are they added? A. An attorney fee of 10%; court costs of 10% plus $15; and an administrative fee of $30 are added March 1 when the delinquent tax lawsuit is filed, a year after the taxes are delinquent. Title search (currently $100) and publication charges (varying amount) are added about two months before the tax sale. A court commission, ranging between 2% - 5% and not to exceed $500, is added about one month before the tax sale. Q. What is "TRD"? A. "TRD" is an abbreviation for Tax Rule Docket, which is the legal court docket under which tax suits are filed in Chancery Court. Q. What is "Exhibit"? A. "Exhibit" is the exhibit number assigned to a particular parcel owing delinquent taxes under the Chancery Court legal proceeding. Q. What is "Classification"? A. "Classification" is the type of use for the property as determined by the Shelby County Assessor, usually residential or commercial. This information is independent of the City Attorney's office and is being made available with the understanding that the writers are not engaged in rendering legal services and the content and comments conveyed herein are provided for educational purposes and general distribution and not intended to apply to a specific set of facts or circumstances to which this information may relate. Please consult the counsel of your choice prior to relying on any information contained herein.