Hi, first time posting here, sorry if its the wrong sub. My husband rents an industrial property from someone who has neglected the property for years (~10 years renting). My husband has been upkeeping the property out of necessity and has not been paying rent because there are no utilities after the owner failed to use specifically alloted utility money to pay the bills after the LAST time they had utilities shut off. The spot is very important to my husband's business, which is mobile but requires large space for storage. In short, it would be very difficult to find another similarly sized and zoned property for decent rent in the same area.
We just found out the property is scheduled for tax auction this year and the owner has not mentioned it at all (we found out through our own research regarding some compliance issues the city brought up during a recent inspection, which my husband had to prepare the property for because the owner didnt care). What we want to know is, aside from winning the auction as the highest bidder, is there any way that my husband, as the current tenant, could bypass the auction and take possession of the property by paying the taxes and filing something? He's afraid that if it goes to another owner they won't let him stay or would repurpose the property. The owner has already lost 2 properties under similar circumstances, and supposedly one was by the tenant who paid taxes but kept it from going to auction somehow. Any advice is appreciated, state is CA.
Rental property is going to tax auction, can we take ownership another way?
byu/thelife0fZ inRealEstate
Posted by thelife0fZ
3 Comments
Decent rent… like zero dollars? Smh
He can only bypass the auction by making a deal with the seller, to either buy it outright, or to pay the back taxes before the auction. But that would be him making another financial gift to the seller. It would give him no rights to the property. The only way to get rights to the property is be the highest bidder at the auction (and California is a little different than many other states, I’m not an expert on how tax auctions work there but you do get more than lien rights as I understand).
I’d highly suggest he gets the seller to agree to sell him the property outright, if he needs it that badly.
There may be a way to craft a contract that gives him more rights than he would have as a tenant, if he cannot buy it outright at the moment (or the seller refuses to actually sell it). You’d need to see a local real estate attorney. In California that is not cheap, but if it’s that important, that would be your path, IMO.
Just spitballing, but a land contract or contract for deed. Your husband agrees to pay the expenses like the taxes and utilities (because obviously the seller is not paying them) and the seller agrees to sell for some amount, at some future point, if they won’t sell it outright at the moment.
Making a deal with the owner to pay off their tax debt in exchange for the title. You’re probably going to have to sweeten the deal a little bit to get him to budge.
I would suggest reaching out to the owner, then also reaching out to the taxing authority that’s having the auction.
In most situations the only thing he needs to do to avoid the auction is to pay the tax debt.