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Broward County Tax Certificate Sale Frequently Asked Questions
Certificate Buyers need to be aware that there are inherent risks involved in purchasing tax certificates. Broward County Revenue Collection does not guarantee the condition of any property or title with respect thereto. The risks are borne by the certificate holder. Do your research before investing and purchasing.
Please also note - Broward County DOES NOT guarantee eventual payment of tax certificates.
This information has been compiled to answer the most frequently asked questions about delinquent real estate taxes and the sale of tax certificates on the Internet.
| 1. | What is an internet auction? |
| 2. | What are "tax certificates"? |
| 3. | How does someone acquire a tax certificate? |
| 4. | Who may participate in the tax certificate sale? |
| 5. | Where and when will the auction be advertised and how often? |
| 6. | What equipment or software do I need to be able to participate? |
| 7. | Who will show me how to use the internet auction system? |
| 8. | What is a batch? |
| 9. | What is proxy bidding? |
| 10. | How does the bidding proceed? |
| 11. | When are my bids due? |
| 12. | When do the bidders have to pay the amount due for their purchases? |
| 13. | What is an ACH debit? |
| 14. | What happens to my security deposit if I don't win any certificates in the auction? |
| 15. | Can interest rates be changed after the bid? |
| 16. | Why would a certificate be cancelled or reduced? |
| 17. | What is the "life" of a tax certificate? |
| 18. | Are tax sale certificates transferable? |
| 19. | How do I get paid? |
| 20. | What is the redemption period of a tax certificate? |
| 21. | Can I pay the taxes and own the property? |
| 22. | Can I borrow the keys or make an appointment with Revenue Collection to view the property so that I can look at it before I buy? |
| 23. | Do liens follow the property? |
| 24. | Are tax certificates always a good investment? |
| 25. | Does Broward County guarantee payment? |
| 26. | Can I contact the property owner and convince him/her to pay? |
1. WHAT IS AN INTERNET AUCTION? top
An auction in which bids are transmitted and received through the Internet using a computer and a web browser.
2. WHAT ARE "TAX CERTIFICATES"? top
An interest bearing first lien representing unpaid delinquent real estate property taxes which are offered for sale by Broward County Revenue Collection through competitive bid to pay delinquent taxes. Tax certificates are not recorded liens nor are they reported to any credit bureaus. They are a "first" priority lien.
3. HOW DOES SOMEONE ACQUIRE A TAX CERTIFICATE? top
Tax certificates are sold to the bidder who offers to purchase at the lowest rate of interest in the public auction of such certificates which is conducted on or before June 1st of each year. That auction is called a Tax Certificate Sale.
4. WHO MAY PARTICIPATE IN THE TAX CERTIFICATE SALE? top
Anyone. To participate in the sale a bidder must register with Broward County Revenue Collection office via the BidBroward.com web site. A bidder number is assigned for identification purposes during the sale. Bidders are required to make a deposit via ACH Debit on the BidBroward.com Payments Page that is 10% of the estimated amount they intend to purchase. The deposit may be increased any time prior to the close of the auction. Registered bidders must provide their Federal Taxpayer Identification number or Social Security number. Only one bidder per Taxpayer ID/Social Security Number will be allowed to register.
The name on the EIN/TIN document (SS-4) or SSN form must be identical to what is entered on the W-9 form, without exception.
If an agent is acting on behalf of one or more investors, he/she must put everything in the name of the holder of the social security number (SSN) or Employer Identification Number (EIN) for each individual investor. The Agent’s name cannot appear on any documents.
All interest earned will be reported to the IRS on form 1099-int.
5. WHERE AND WHEN WILL THE AUCTION BE ADVERTISED AND HOW OFTEN? top
The listing of unpaid taxes is published in the Daily Business Review on or about May 1. The list is published three times in May. The Daily Business Review can be contacted at: 633 South Andrews Avenue, Fort Lauderdale, FL 33301 Phone: 1-800-777-7300 or 954-468-2600 or via the internet at www.dailybusinessreview.com.
6. WHAT EQUIPMENT OR SOFTWARE DO I NEED TO BE ABLE TO PARTICIPATE? top
A bidder must have a computer with Internet access and a web browser (recommended: Internet Explorer 5.0 or higher on Windows 98, Me, NT, 2000, or XP; Netscape 7.1 or higher; or Mozilla FireFox 0.8 or higher). If you do not have access to a computer, the Broward County Revenue Collection will supply computers in the office at 115 S. Andrews Avenue, Room A-100, FL. Additionally, all Broward County libraries have computers that are available for public use. You may contact Broward County Revenue Collection at 954-831-4000.
7. WHO WILL SHOW ME HOW TO USE THE INTERNET AUCTION SYSTEM? top
Users are encouraged to participate in a Self Demo, Trial Auction or a Guided Demo prior to bidding.
- Self Demo - Please log in with your ID and password, and click "Auction Demo" under Auction Site Training Tools. The instructions are designed to lead users through the auction process.
- Trial Auction - Please log in with your ID and password, and click "Trial Auction" under Auction Site Training Tools. The Trial Auction is a simulation of a real auction, in which bidders practice bidding and, subsequently, viewing auction results.
- Guided Demo - Please contact Auction Support to receive a Guided Demo (which is available only after user completes the Self Demo). Auction Support will guide the user through the auction process on the website over the phone at 800-410-3445.
A Batch is an auction subgroup of the Advertised List that serves as a means of organizing tax certificates for the purpose of facilitating bid submission. Each tax certificate in each Batch is auctioned independently of every other tax certificate and arranged in sequential order with a unique auction closing time for each Batch. In each batch, the properties are listed in the order they are listed in the advertisement which is the order they appear on the tax roll. This order cannot be changed.
9. WHAT IS PROXY BIDDING? top
In a live auction, a bidder will lower his bid by quarter percent increments until he is the only bidder left or until the interest goes below his acceptable minimum level, at which point he would drop out. Proxy bidding is a form of competitive sale in which bidders enter the minimum interest rate that they are willing to accept for each certificate. The auction system acts as an electronic agent, submitting bids on behalf of each bidder. The result of the proxy system is that the electronic agent keeps lowering the bid to submit by quarter percent increments until you are either the only bidder left, (in which case you get the certificate at a quarter percent lower than the previous bid) or until you reach the floor you have set.
Zero percent bids will not be treated as proxy bids. They will be awarded at zero.
If you are the only bidder on a given certificate and your minimum rate is greater than zero percent, the electronic agent will submit a bid of 18% on your behalf.
In the case of a tie at the winning bid rate, the system awards to one of the tie bidders through a random selection process using a random number generator.
In no case will a bidder be awarded a certificate at a rate lower than his specified minimum acceptable rate.
Certificates that receive no bids after all batches are closed will be struck to the county at 18%.
10. HOW DOES THE BIDDING PROCEED? top
Each parcel is auctioned in the order listed in the publication. The bidding begins at 18% (the maximum rate) and is bid down. The "winning" bidder's number and rate of interest are recorded. Any item not bid upon is "struck" to the County.
11. WHEN ARE MY BIDS DUE? top
Bids can be submitted on the web site once the Advertised List is published on the Internet, usually in early May. The advertised list will be divided into 12 batches. Bids can be withdrawn or altered at any point up to the closing of the Batch on the day of the sale.
12. WHEN DO THE BIDDERS HAVE TO PAY THE AMOUNT DUE FOR THEIR PURCHASES? top
Bidders will receive an email invoice on May 27, 2009 indicating the total amount due, if any. All payments must be made via ACH from the Payments Page of the BidBroward.com website no later than 5:00 p.m. on Friday, May 29, 2009.
Failure to pay for all certificates by that date will result in the loss of the deposit and forfeiture of all the certificates. The certificates will be re-sold at a later date.
13. WHAT IS AN ACH DEBIT? top
An ACH debit is an electronic funds transfer from your bank account, initiated by the Tax Collector with your prior authorization. Debits entered on the web site will be submitted immediately for processing.
Funds must be drawn from a US financial institution. Some types of money market, brokerage, and/or trust accounts cannot accept ACH debits. Please check with your financial institution prior to initiating payment on the web site.
For more information on ACH, please visit the NACHA, the Electronic Payments Association at www.nacha.org.
14. WHAT HAPPENS TO MY SECURITY DEPOSIT IF I DON’T WIN ANY CERTIFICATES IN THE AUCTION? top
Refunds for unused portions of the deposit will be issued by check within 4 weeks of the conclusion of the tax certificate sale.
15. CAN INTEREST RATES BE CHANGED AFTER THE BID? top
When a certificate is redeemed and the interest earned is less than 5%, a mandatory charge of 5% is due. This applies to all certificates except those with an interest rate bid of 0%. If a certificate should be canceled or reduced, the interest earned will be 8% per year, simple interest or the rate of interest bid at the tax certificate sale, whichever is less on the canceled or reduced amount. Bankruptcy rulings may also affect interest rates.
16. WHY WOULD A CERTIFICATE BE CANCELLED OR REDUCED? top
When the Property Appraiser issues corrections for errors, omissions, or double assessments; or when ordered by a court.
17. WHAT IS THE "LIFE" OF A TAX CERTIFICATE? top<</a>
Certificates are dated as of the first day of the sale and are null and void seven years from the date of issuance. When two years have elapsed since April 1 of the year of issuance, the holder of a tax certificate may submit a Tax Deed Application to Broward County Revenue Collection.
18. ARE TAX SALE CERTIFICATES TRANSFERABLE? top
Certificates may be transferred by completing an endorsement form and paying the applicable fees. Note: Not all certificates can be transferred. Some examples include those properties that where a tax deed application has been submitted. If the certificate is eligible for transfer, the seller of the certificate must complete the required paperwork which requires notarization.
The new buyer must be a registered buyer. If the buyer is not a registered buyer, he/she will be required to complete and file form W-9 "Payer's Request for Taxpayer Identification Number and Certification" (TIN) for each buyer number assigned as all interest will be reported to the Internal Revenue Service. A single buyer number will be assigned for each Social Security Number (SSN) or Employer Identification Number (EIN) provided and must be identical to the name provided on the W-9 form.
Any change to a tax certificate will constitute a transfer and will be subject to the appropriate fees and paperwork for each certificate bought under that number. The transfer paperwork must be presented to Broward County Revenue Collection along with the fee of $2.25 per certificate before the transfer is valid.
19. HOW DO I GET PAID? top
When a certificate has been redeemed (owner, title company or mortgage company pays the outstanding taxes) to Broward County Revenue Collection, the certificate holder is entitled to the face value plus whatever interest the certificate has earned. Proceeds are remitted weekly to the certificate holder. The certificate holder is never paid directly unless it is from a Bankruptcy Trustee. If that happens, the certificate holder must notify Broward County Revenue Collection when he/she is paid in full and request that the certificate be cancelled.
20. WHAT IS THE REDEMPTION PERIOD OF A TAX CERTIFICATE? top
The property owner can redeem a certificate at any time until the property is sold at a tax deed sale OR until the certificate has expired (7 years after the date of issuance).
21. CAN I PAY THE TAXES AND OWN THE PROPERTY? top
NO. You have not purchased property. A tax certificate is an investment. This investment does not convey any property rights or ownership to the certificate holder. A certificate holder is an investor and the purpose of purchasing certificates is to earn interest on your investment not to get the property.
22. CAN I BORROW THE KEYS OR MAKE AN APPOINTMENT WITH REVENUE COLLECTION TO VIEW THE PROPERTY SO THAT I CAN LOOK AT IT BEFORE I BUY? top
Revenue Collection is NOT a Real Estate Agency, DOES NOT have the keys to the property and knows nothing about the condition of any property. Do your own research! The Property Appraiser’s office and their website have USE codes and maps. Revenue Collection can only tell you about the taxes that are due. Remember: You are trespassing if you go onto the property.
23. DO LIENS FOLLOW THE PROPERTY? top
Government liens always follow the property. It is important to research the payment history and type of property before you bid on certificates.
24. ARE TAX CERTIFICATES ALWAYS A GOOD INVESTMENT? top
The following possibilities, though not inclusive are some of the non-cost recoverable circumstances that could affect the amount of interest you earn on your investment and/or the amount of your investment:
- Owner files bankruptcy (interest could be reduced and/or Trustee will send you $x per month, etc.)
- Department of Revenue correction on the taxes
- Court orders the omitting of taxes
- Assessed value on the property by the Property Appraiser may be in error and not subject to retroactive correction when the problem is discovered
- Parcel may have had an assessed structure or wood frame home that is subsequently burned down or condemned
- Parcel may have had a mobile home on it at the time of the tax certificate sale which has been removed or destroyed, leaving the property vacant
- A condo that is part of a group of buildings that are later condemned or destroyed.
Broward County DOES NOT guarantee eventual payment of tax certificates. Risks Exist! You must do your research.
26. CAN I CONTACT THE PROPERTY OWNER AND CONVINCE HIM/HER TO PAY? top
A certificate holder who initiates, or whose agent initiates, contact with the property owner upon which he or she holds a certificate encouraging or demanding payment may be barred by the tax collector from bidding at future tax certificate sales. Unfair or deceptive contact by the holder of a tax certificate to a property owner to obtain payment is an unfair and deceptive trade practice according to law, regardless of whether the tax certificate is redeemed. Such unfair or deceptive contact is actionable under applicable laws prohibiting fraud.
Neither a certificate holder nor an Agent, can take any action against the property and/or the property owner (direct or indirect) until he or she has held the certificate for twenty-two (22) months. After that period of time, an Application for Tax Deed can be made, which forces the owner to pay the back taxes or the property is sold at a public auction to the highest bidder.
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