An Overview of the Tax Sales Process
The City of St. Louis (as well as Kansas City) conduct their tax sales for property encumbered with delinquent real estate tax liens under the Municipal Land Reutilization Law. The Municipal Land Reutilization Law is a powerful and effective tool to clear title to parcels. Unlike tax sales conducted in other counties in the State of Missouri under the Jones Munger Act, tax sales under the Municipal Land Reutilization Law have three primary benefits:
- First, upon confirmation of the tax sale, title vests in the purchaser subject only to federal tax liens and utility rights of way. That is, leases are terminated, state tax liens are extinguished, and deeds of trusts are canceled.
- Second, the confirmation process does not require a secondary suit to be filed such as a quiet title lawsuit to clear title or an unlawful detainer or ejectment action to obtain possession.
- Third, the confirmation process is efficient and relatively inexpensive with attorney's fees, appraisal fees, occupancy permit application fees, and recording fees typically being less than $1,750 per parcel.
Step by Step Process
Step 1 - Obtain a Copy of the Notice of Sheriff's Sale: The Sheriff for the City of St. Louis, Missouri, publishes notice of sheriff's sales in the St. Louis Post-Dispatch on the following dates:
- May 5, 2009 / May 12, 2009
- June 9, 2009 / June 16, 2009
- July 7, 2009 / July 14, 2009
- August 4, 2009 / August 11, 2009
- October 6, 2009 / October 13, 2009
Step 2 - Research the Properties: Prior to the sale, it is important to research the location, condition, and value of the subject properties. It is important to physically review the Assessor's Plats and to view the subject properties. Often, the property address listed on the notice of sheriff's sale or on the property does not match. The reason for this is that the property being sold could be a side lot, rear lot, etc. Also, if there is a billboard on the site, it is important to verify whether the property being sold is the interest associated with the bill board or underlying property.
Step 3 - Obtain Estimate of Fair Market Value of the Property: After verifying the location and condition of the property, it is important to ascertain the estimated fair market value of the property. It may be advisable to consult with an appraiser or experienced real estate professional to obtain an estimated value for the property. After determining a range of value, develop a bidding strategy for the properties listed in the sale in which you have an interest. Even if you intend to only purchase a single property, it is important to have multiple properties identified as some properties will be removed from the sale because of the payment of taxes by the owners. Bidding is extremely competitive at the tax sales with multiple bids on most properties.
Step 4 - Attend Sheriff's Sale: The Sheriff of the City of St. Louis conducts the sheriff's sales for tax delinquent properties at the East Doors (interior) of the Civil Courthouse located at Tucker and Market (10 N. Tucker) starting at 9:00 a.m. on the following dates:
Step 5 - Bidding and Payment: The Sheriff of the City of St. Louis conducts the bid by public vendue or auction with the highest bid being awarded the property. The successful bidder must pay to the Sheriff the full amount of the winning bid by no later than 2:00 p.m. on the date of the sale by cash, cashier's check or money order. If the successful bidder fails to pay the bid amount, the Sheriff then conduct a second sale on the following day. If the sale does not achieve an equal or greater bid, then the Sheriff may seek to recover the difference between the successful bid at the first sale and the successful bid at the second sale from the successful bidder at the first sale.
Step 6 - Confirmation Hearing: The successful bidder at the Sheriff's sale must file a motion to confirm the tax sale in Division No. 29 of the Circuit Court of the City of St. Louis, Missouri (motions were previously filed in Division 2). Notice of the confirmation hearing must be sent to all interested parties who received the original notice of sale from the Collector of Revenue and/or Sheriff. The best practice is to provide notice to all owners of record, lienholders of records, and tenants or occupants. At the confirmation hearing, after providing notice to all interested the parties, the successful bidder must offer evidence on two issues: (1) proof that the notice of the confirmation hearing was sent to all interested parties and (2) evidence in the form of the testimony of an appraiser or other qualified real estate professional to testify that the successful bid amount is equal to the "reasonable value" of the property and represents "adequate consideration" for the purchase of the property. It is important to note that the opinions of value are not based on fair market value. Rather, the opinions of value offered must be based on "reasonable value" under forced sale conditions. It is advisable to retain and employ an attorney to represent the bidder in the confirmation process and to employ an experienced appraiser such as Steve Goldman who is familiar with the valuation standards used in the confirmation process.
Step 7 - Confirmation, Occupancy Permit Application and Recording of Deed: If the Court confirms the bid and sale, the successful bidder must apply for an occupancy permit from the Building Division. Upon receipt of a copy of the confirmation order and a copy of the occupancy permit application, the Sheriff then issues to the successful bidder a sheriff's deed that conveys "absolute estate in fee simple, subject to rights-of-way thereon of public utilities on which tax has been otherwise paid, and subject to any tax lien thereon of the United States of America, if any." The act of confirming the sale clears all prior liens (excepts utility rights of way and federal tax liens). It should be noted that the confirmation of the bid and tax sales doesn't remove the obligation to pay the real estate taxes for 2008 and subsequent years because these tax years and amount were not included in the sale. Upon receipt of the sheriff's deed, you should verify the legal description and then record the deed in the office of the Recorder of Deeds for the City of St. Louis, Missouri.
Step 8 - Obtain Possession: Upon receipt and recording of the deed, you are authorized to take possession of the property. If the property is occupied, you will need to file a motion for the issuance of a writ of possession. The writ of possession is then delivered to the Sheriff and the Sheriff physically evicts the occupants from the property. A licensed and insured mover should be used to remove personal property from the property. After possession of the property is obtained, it is important to secure the property and, if appropriate, obtain insurance on the property.
Step 9 - Release of Sheriff's Lien: The deed issued by the Sheriff will include a lien in the amount of $5,000. The lien can only be released upon the completion of repairs and issuance of the occupancy permit. If the property is transferred prior to the issuance of the occupancy permit, the property is conveyed subject to the lien. Upon the issuance of the occupancy permit, it is import to record proof of the issuance of the occupancy in the office of the Recorder of Deeds for the City of St. Louis to release the sheriff's lien.
Need experienced representation to assist you with the tax sale process (including confirmation of the sale) in the City of St. Louis, Missouri? Contact Ryan Shaughnessy at 314-971-4381 or Michelle Silies at 314-397-3182 who are licensed attorneys and real estate brokers familiar with the tax sale process in the City of St. Louis, Missouri.