What happens to tax liens if property is foreclosed on?
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What happens to tax liens if property is foreclosed on?
I have a tax lien on my house. Now it is going to a foreclosure sale. What happens to the lien when it forecloses?
Asked on September 29, 2011 under Real Estate Law, Arizona
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Under the statutes of all states in this country, a property tax lien is senior as a matter of law as to all recorded liens by lenders or judgment creditors on a person's property. meaning, if you lose your home in a foreclosure and you owe unpaid property taxes upon it, the person or entity foreclosing upon the mortgage (trust deed) who later gets legal title to the property is obligated to pay off all unpaid property taxes and to keep the property taxes assessed as to the property current.
However, any junior recorded liens on the property to the lien that is foreclosing upon the property would be eliminated and wiped out as a matter of law in the event of a successful foreclosure sale.
Good question.
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