Q1.  What is a “tax certificate?”

A tax certificate is a document that allows a County to generate tax revenue on those properties where the owners have been delinquent in paying their taxes.  A certificate generates a lien upon the property that must be cleared prior to the property being sold or any sort of building permit being issued.  It does not convey any ownership rights to any property and provides no privileges normally associated with land ownership to the certificate owner.

[back to the index]

Q2.  Do all States have the same procedures for obtaining tax certificates?

There are no doubt similar procedures in nearly every state and subdivision where property taxes are mandated and collected; however, FLATTC, LLC, is only concerned with those procedures defined by the laws of the State of Florida.

[back to the index]

Q3.  What does a tax certificate cost?

The cost for obtaining a tax certificate is generally the cost of the delinquent taxes plus a small administrative and advertising fee, typically no more than 5%.

[back to the index]

Q4.  Once the Company buys a tax certificate does that mean it owns the property?

No - ownership still belongs with whomever has a current ownership right to the property. The Company may, through the “tax deed process” (described later), obtain ownership of the property.

[back to the index]

Q5.  How does the Company obtain tax certificates?

Certificates can be obtained via two methods:

• The first method, which will yield the better quality certificates, is through the auction process specified in the Florida Statutes.  This process calls for a public auction of tax certificates during the latter part of May for those properties with delinquent taxes for the last year.  The auction is somewhat different from a normal auction in that the bidders do not bid dollars but bid interest rates they are willing to accept for the certificate if and when it’s redeemed. The bidding starts at 18% and can go to zero; however, even with a bid of zero percent the certificate holder is guaranteed a minimum of 5% simple interest for each year the certificate is held.
• The second method allows certificates to be obtained on a first-come-first-served basis for all certificates that may not have been purchased at the May auction.  The interest rate for these certificates is automatically set at 18% simple interest per year.  Certificates obtained via this method will generally be of lower quality than those obtained via the auctin method described above.

[back to the index]

Q6.  How will the Company know which properties have certificates available?

Under current Florida law, the County must advertise the certificates available for the three consecutive weeks prior to the May auction in a widely read publication.  In Hernando County, the publication is done through both the Tampa Tribune^© and The St. Petersburg Times^© newspapers.

Note:  At the time of this writing, the Florida Legislature is considering legislation that would reduce the number of times the list is published to once. 

Additionally, Hernando County provides automated web access to the County tax records and searches can be performed to identify properties with delinquent taxes.

[back to the index]

Q7.  What is the “tax deed process” you mentioned in answering Q4?

After a certificate is held for two years, the certificate holder may start the process of obtaining ownership of the property.  This is done by applying to the County for a tax deed, consolidating all the outstanding certificates, and paying an administrative fee to the County of approximately 5% of the consolidated amount.

The County issues a consolidated certificate at an interest rate of 18%, begins the title search process, and notifies all interested parties that the land will be sold for taxes. These parties may include the current property owner, any mortgage holder, any other lien holder, adjacent property holders, etc. This process takes approximately 6 months while the certificate accrues value.

The auction is a normal auction where the reserve price is set at the price of the outstanding certificate. As the certificate holder, the amount of the outstanding certificate is applied against any bid we may make. The other bidders must cover the price of our certificate, plus accrued interest, with their bid. For example, if the property sells for $3000 and the certificate value is $2500, we only pay the difference of $500 for the property.  Any other winning bidder will pay the full $3000 of which we’ll get $2500 plus the accrued interest.

[back to the index]

Q8.  Why “FLATTC?”

Florida Land Acquisition Through Tax Certificates

[back to the index]

[Home] [About Us] [FAQ Index] [FAQ] [News] [Calendar] [Business Plan] [Links]