Florida tax deed sales are getting risky.

• Author: Quinn, Robert M.

Each year tax collectors and circuit court clerks across the state conduct tax deed sales to collect unpaid ad valorem real property taxes. Occasionally, successful bidders at these sales acquire tax deeds to valuable properties worth far more than the taxes owed against them. But some of these fortunate purchasers may be in for a rude surprise if the notice of sale failed to actually reach the former owners of the property. Two recent decisions applying due process protection to tax deed sales have imposed more stringent notice requirements than have prevailed in prior years, (1) tilting the playing field to the advantage of property owners challenging tax deed sales due to a lack of notice.

Notice of Tax Deed Sales

Under Florida law, a parcel of real property becomes eligible for a tax deed sale when ad valorem property taxes become more than two years past due. The Florida Statutes divide responsibility for giving notice of tax deed sales between a county's tax collector, who must identify the persons entitled to notice, and the clerk of the circuit court, who sends the notices. (2) The tax collector must search the county's official real estate records to identify legal title holders of record, mortgagees, and other persons who are entitled to receive notice that their property is about to be sold for unpaid taxes. (3) The tax collector must also review the property appraiser's latest assessment roll to identify the person to whom the property in question was last assessed, who is also entitled to notice. (4)

Once the tax collector determines who is entitled to notice, he or she must prepare a statement identifying those persons and their addresses, then deliver the statement to the clerk of the circuit court. (5) The clerk must send notice of the upcoming tax deed sale by certified mail return receipt requested to each of the persons listed on the tax collector's statement. (6)

In the past, Florida courts routinely upheld tax deed sales despite challenges brought by property owners who never actually received notices mailed by the clerk. If the tax collector prepared the required statements and the clerk mailed notice to the persons so identified, courts upheld the sale, even if the notices were misdirected due to errors by the tax collector or were sent to outdated addresses still reflected on the property appraiser's rolls. (7) In these cases, the courts focused on the fairness of the statutory scheme generally and upon the information available to the clerk at the beginning of the process. Courts also made frequent reference to the duty imposed on every property owner to know that his or her property is subject to ad valorem taxes that become due and payable each year, as additional support for upholding sales where notice had failed to reach the property owner.

In fact, courts upheld tax deed sales even when the clerk received returns from the postal service clearly stating that the notice had failed to reach the property owner who was about to lose his or her property. (8) Thus, even when the clerk conducting the sale was fully aware the notice had failed to reach the property owner, courts upheld the sales, holding that the notice satisfied the Florida statute and also met the basic requirement of due process that notice be "reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action." (9)

When Notice of Sale Is Returned Undelivered

A property owner's prospects for overturning a tax deed sale due to lack of notice improved dramatically in 2006, however, with the Supreme Court's decision in Jones v. Flowers, 547 U.S. 220 (2006). There, the court squarely rejected the premise that merely sending notice of a tax deed sale satisfied due process if that notice is returned undelivered before the sale occurs. (10)

Faced with a property owner's challenge to an Arkansas tax sale, the court granted certiorari to determine "whether the due process clause...