The attorneys here have been involved with a form of Arizona real estate investment known as Certificates of Purchase (“CP”) or real property tax liens for the past twenty-four years.

Certificates of Purchase evidence liens placed upon real estate for non-payment of taxes. The liens are initially imposed by the county treasurer where the property is located. Liens are secured by the subject real property, and they cannot be eliminated by other foreclosure procedures such as trustee sales or judicial foreclosures. If the taxes remain unpaid for two years, then the county treasurer offers the lien or CP for sale to the public.

A CP is purchased from the County Treasurer by paying the total of the back taxes along with 16% on that amount plus approximately five to ten dollars in miscellaneous purchase fees. This is called an assignment to a private individual whether it is actually an individual or a legal entity.

If the actual landowner, as well as anyone else with an interest in the property, wishes to protect their interest in the subject property, they have the right to redeem the CP within the three (3) years immediately following the date the CP is originally offered for sale to the public. In this situation, the redeeming party is required to pay the amounts paid by the CP holder for the CP plus the percent of annual interest that was bid on that amount.

If the property is not redeemed within the three year period, a judicial foreclosure of the lien is permitted by Arizona statute. If the property is redeemed after the foreclosure proceeding is initiated and the redeeming party is served, the redeeming party still pays the back-taxes, the CP holder essentially pays nothing for the lawsuit and still gets his investment plus interest back.

If the property is not redeemed after the foreclosure proceeding is filed, then the CP holder obtains title to the property via a Treasurer Deed. Under these circumstances, the CP holder (now landowner) pays the costs and attorney’s fees which have been incurred.
Costs generally run $1,500.00 to $3,000.00, which include the costs of litigation guarantees, filing fees, recording fees, investigation services, service of process and publication in some cases. Attorney’s fees are negotiated on a client-by-client basis depending upon the number of foreclosures anticipated. Our normal fees range from $1,250.00 to $3,500.00 per foreclosure action that results in a deed, with lower rates for high volume clients.

The only risks that we have been able to ascertain after twenty-four years of experience in this area of law are (1) that the property value is less than total cost of back taxes and the costs of obtaining a deed, (2) a bankruptcy proceeding by a party with an interest in the property, and (3) another interest presents after filing the lawsuit and is not named or served and ultimately redeems the back taxes. The former can be minimized by judicious selection of the parcels purchased, and the latter is more of a risk to the attorneys as the debt for the costs and attorneys fees is generally the one that is discharged.

In reference to our experience in this area, we have been doing this type of work for the last twenty-four years. We represent some of the largest investors in the state, some of whom have invested millions of dollars. They come to us from all over the country, and include doctors, lawyers, engineers and real estate specialists as well as other professionals.

We would like to thank you for reviewing the above and invite you to call us if you would like to talk about the opportunities discussed above. We would be happy to answer any questions you have or provide you with any additional information you deem necessary.

FREQUENTLY ASKED QUESTIONS ABOUT TAX LIENS