COMPREHENSIVE GUIDE TO UNDERSTANDING KENTUCKY TAX

COMPREHENSIVE GUIDE TO UNDERSTANDING

KENTUCKY TAX SALES

June 4, 2020

By: Randall L. Saunders, Esq.

Megan L. Ware-Fitzgerald, Esq.

Nelson Mullins Riley & Scarborough LLP

949 Third Avenue, Suite 200

Huntington, West Virginia 25701

[email protected]

Matthew A. Abee, Esq.

Nelson Mullins Riley & Scarborough LLP

1320 Main Street, 17th Floor,

Columbia, SC 29201

[email protected]

TAX SALES IN KENTUCKY

Kentucky’s counties strictly abide by the statutory code outlined in KRS Chapter

134 when conducting tax sales. However, under section 156b of the Kentucky

Constitution, Kentucky is a “home rule” state. This means that the Kentucky

Constitution authorized the Kentucky General Assembly to grant broad “home rule”

powers to cities. Thus, the Kentucky General Assembly granted broad home rule

authority to all classes

of cities by adopting KRS 82.082. Therefore, the home rule cities

of Kentucky can effectively self-govern. Lexington is a home rule city but maintains all

responsibilities and privileges under its urban county statutes.

These self-governing

laws make it critical to determine who the selling entity within the jurisdiction is and the

procedures it follows.

To understand tax sales in Kentucky, it is important to understand the statutory

codes and procedures associated with the counties and home rule cities. Therefore, both

will be addressed below.

Disclaimer:

This publication is designed to provide accurate and authoritative information in regard to the subject

matter covered. This publication does not constitute legal advice. Should you need assistance, retaining

experienced legal counsel is recommended.

As of 2015, Louisville is the only “first class city” remaining in Kentucky. Although classified

as a first class city, Louisville opts to have the sheriff collect its taxes and the county clerk collect

delinquent taxes and proceed with tax lien sales. Chapter 91 of the Kentucky Revised Statutes is

the statutory authority for first class cities.

https://www.klc.org/InfoCentral/Detail/2/classification

KENTUCKY REAL PROPERTY TAX LIEN SALES,

“TOLLING PERIODS,” REDEMPTIONS

AND JUDICIAL FORECLOSURES

In Kentucky, delinquent real property taxes are sold as tax lien certificates

(“certificates of delinquency”) at an annual public auction. One year following the date

of delinquency, a purchaser can initiate a suit to foreclose on the lien.

COUNTIES IN KENTUCKY

REAL PROPERTY TAX LIEN SALES

I. Real Property Delinquent Tax Liens

Kentucky real property taxes are due on or before December 31 each year and are

considered delinquent on January 1

. 134.015; 134.119. If delinquent property taxes go

unpaid, a lien attaches to the property and continues from the time the taxes become

delinquent until the taxes are paid, up to 11 years from the date the taxes become

delinquent. 134.015; 134.420. Such a lien is only defeated by sale to a bona fide purchaser.

134.420. The delinquent tax lien includes all interest, penalties, fees, commissions,

charges, costs, attorneys’ fees, and other expenses delineated in KRS 134.420 incurred by

the delinquency or in the process of collecting on the delinquency. 134.420.

II. Sheriff’s Collection of Delinquent Taxes

The taxpayer, or other parties, may pay the sheriff delinquent taxes owed. 134.119.

Upon the written notarized request of the taxpayer, a party may pay taxes on the

taxpayer’s behalf. 134.119; 134.121. That person will be treated as a “transferee.” 134.121.

Additionally, certain persons or entities do not need a written request from the taxpayer.

Counties in Kentucky comply with Chapter 134 of the Kentucky Revised Statutes.

134.119. Those persons/entities are (1) any person holding a legal or equitable estate in

the property upon which the delinquent taxes are due

; (2) a tenant or lawful occupant of

the real property; or any person having a mortgage on the real property or a security

interest in the real property upon which the delinquent taxes are due. Id. The

aforementioned interested parties, upon written request to the sheriff, are treated as

transferees. 134.119. A transferee receives a certificate of transfer from the sheriff which

must be recorded. 134.121. Failure to record the certificate of transfer will result in a loss

of the lien on the property. Id.

III. County’s Collection of Delinquent Taxes

On April 15, or three months and fifteen days from the date the delinquent taxes

were due if operating under an alternative collection schedule

, the sheriff files all tax

claims on real property remaining in his/her possession with the county clerk. 134.122.

After filing with the county clerk, the real property tax claim becomes a certificate of

delinquency and the Department of Revenue (“Department”), as opposed to the sheriff,

is then responsible for collecting the amounts due. Id. Payment for a certificate of

delinquency includes (1) the face amount of the tax due; (2) a ten percent (10%) penalty;

the sheriff’s commission and a ten percent (10%) sheriff’s “add-on”

. Id. Certificates of

This is other than a person whose only interest in the property is a lien resulting from ownership

of a prior year certificate of delinquency. Id.

If the regular collection schedule is delayed, the Department of Revenue may establish an

alternative collection schedule, where taxes must be due two full months from the date the tax

bills are mailed. 134.015.

The sheriff’s additional compensation is an amount equal to ten percent (10%) of the total taxes

due plus ten percent (10%) of the ten percent (10%) penalty for all delinquent taxes. 134.119. This

fee is added to the total amount due. Id.

delinquency are assignable. 134.126. If payment is made by a person other than the

person liable on the certificate of delinquency, the person making such payment may

request that the payment constitute an assignment. Id. The county clerk is paid ten

percent (10%) of the amount due each taxing unit for each certificate of delinquency and

that fee is added to the amount of the tax claim and will be paid by the person paying for

the certificate of delinquency. Id. The same persons/entities that may pay the sheriff in

the stead of the taxpayer for a certificate of delinquency under 134.119, may also pay the

county clerk for the certificate. 134.127. However, any person may pay the total amount

due on the certificate after 90 days have passed from the filing of the tax claim with the

county clerk. Id.; 134.128.

IV. Sale of Certificates of Delinquency to Third Parties

The sale of certificates of delinquency by county clerks to persons other than the

delinquent taxpayer or those persons/entities with an interest in the real property as

codified in KRS 134.119 and 134.127, are conducted in accordance with KRS 134.128.

Under KRS 134.128, the Department must establish an annual statewide schedule for the

sale of certificates of delinquency in each county and such schedule is published on the

Department’s website at least ten days before the first sale. The sale is conducted by the

county clerk and must be scheduled at least 90 days, but not more than 135 days after the

unpaid tax claims are filed with the county clerk. 134.128.

a. Requirements of Third Party Purchasers Prior to Sale

Any third party purchaser holding a certificate of delinquency on a parcel of

property from a prior year has first priority and is allowed to submit a priority list and

purchase any priority certificates of delinquency to which the third party purchaser is

entitled. 134.128. Third party purchasers are required to submit a list of priority

certificates of delinquency to the county clerk up to ten days before the annual sale so

that the clerk may identify and allocate priority certificates of delinquency to third party

purchasers before the annual sale. Id. All priority certificates of delinquency allocated to

third party purchasers must be removed from the annual sale. Id. Priority is given to the

third party purchaser holding a certificate of delinquency from the most recent tax year

if there are more than one holding an outstanding certificate on a parcel of propery. Id.

Those third party purchasers who intend to participate in the sale must register at least

one week in advance with the county clerk. Id. Any person who, in any calendar year,

pays or intends to pay more than five certificates of delinquency statewide, more than

three certificates in any county, or invests or plans to invest more than $10,000.00 in the

payment of certificates statewide, must register with the Department of Revenue

134.128; 134.129.

b. Pre-Sale Notice of the Tax Sale

At least 30 – but not more than 45 – days before the sale date, the county clerk must

publish notice of the sale in a newspaper of general circulation within the county

conducting the sale. 134.129. A fee of $5.00 for each certificate of delinquency advertised

is added to the amount owed for the certificate. Id. Then, on or before June 1, the

Department publishes on its website a consolidated list of certificates of delinquency by

An application is available on the Department’s website – http://revenue.ky.gov/property+tax.

county. 134.131. Thereafter, beginning in mid-July, county clerks conduct sales of

certificates of delinquency to third party purchasers.

https://revenue.ky.gov/Property/Pages/Delinquent-Property-Tax.aspx. The sales run

through the latter part of October, however, the majority of the sales are conducted from

mid-July through the end of August. Id.

c. Sale Procedures

Kentucky uses a premium bid method. The counties starting bid includes back

taxes, penalties, interest, and any administrative costs. Investors will bid up the price of

the lien and the highest bidder will receive the certificate of delinquency. Certificates of

delinquency are sold by the county clerks in a predetermined lot size.

https://revenue.ky.gov/Documents/PotentialThirdPartyPurchasersManual.pdf. The

selection order is determined by a random drawing at the beginning of the sale. Id. The

Department has a system for how the certificates are sold, depending on lot size. Id. In

counties with 500 or fewer certificates of delinquency to be sold, the certificates may be

sold in lots of up to 5; in counties with more than 500 and less than 1,000 certificates of

delinquency to be sold, the certificates may be sold in lots of up to 10; in counties with at

least 1,000 and less than 2,500 certificates of delinquency to be sold, the certificates may

be sold in lots of up to 25; in counties with at least 2,500 but not more than 7,500

certificates of delinquency to be sold, the certificates may be sold in lots of up to 50; and

if a county has more than 7,500 certificates of delinquency available for sale, the

certificates may be sold in lots of no more than 50 for the first 4 rounds. For all subsequent

rounds, the certificates may be sold in lots not to exceed 2% of the total number of

certificates of delinquency available to be sold. Id. After the tax sale, the remaining

certificates of delinquency may be purchased at any time by any third party purchaser so

long as they meet the registration requirements. Id.

d. Post-Sale Notice of the Tax Sale

If a third party purchases the certificate of delinquency, the delinquent taxpayer

must then work with the third party to satisfy the delinquency. Id. Within 50 days after

delivery of a certificate of delinquency to the third party purchaser, the third party

purchaser is tasked with sending notice to the delinquent taxpayer by first-class mail with

proof of mailing. 134.490. The notice must include a statement that the certificate of

delinquency is a lien of record against the property; that the certificate accrues simple

interest at the rate of 1% per month; a statement that if the certificate is not paid it will be

subject to collection which may include foreclosure, a list of the total due as of the date of

the notice, and if the purchaser was required to register with the Department, a statement

that the taxpayer may make a written request for an installment payment plan. 134.490.

Additionally, until the third party purchaser institutes a foreclosure action, the third

party purchaser must continue sending notice, at least annually, to the delinquent

taxpayer. Id.

e. Fees Third Party Purchaser is Entitled to Collect

If the taxpayer, or someone on behalf of the taxpayer, seeks to “redeem” or satisfy

the certificate of delinquency, the third party purchaser is entitled to a multitude of fees,

such as the amount paid for the certificate of delinquency, interest calculated at 12% per

year on the amount paid to the county clerk from the date of purchase of the certificate

of delinquency until the same is paid, and prelitigation attorneys’ fees.

134.452.

ONE YEAR “TOLLING PERIOD”

AND JUDICIAL FORECLOSURES

I. One Year “Tolling Period”

Kentucky has a one year “tolling period” for purposes of initiating a lawsuit.

134.546. In Kentucky, a purchaser cannot bring an action to collect any amounts due on

a certificate of delinquency until one year from the date the taxes became delinquent has

passed. Id. Therefore, because taxes are considered delinquent on January 1 of each year,

a lawsuit cannot be commenced until January 1 of the following year. Additionally, no

action can be brought within 11 years of the date when the taxes became delinquent

. Id.

II. Foreclosure/Enforcement Actions

Any time after the expiration of the one year tolling period – but before 11 years

following the date of delinquency – a third party purchaser may institute a foreclosure

action to collect on the amounts owed under the certificate of delinquency or to enforce

the lien created by the certificate of delinquency. 134.546. Under KRS 134.546, a third

party purchaser may (1) institute an action against the delinquent taxpayer to collect the

amount of the certificate of delinquency to enforce the debt; (2) institute an action to

enforce the lien represented by the certificate of delinquency; or (3) institute one action

including both types of the aforementioned actions. Id. Any property owned by a

See KRS 134.452(1)(c) for specific amounts eligible for collection regarding attorneys’ fees.

Said another way, a purchaser has 10 years following the expiration of the tolling period to

initiate an action.

delinquent taxpayer is subject to foreclosure or execution in satisfaction of a judgment

against the property or the person, or both, to enforce the obligation. Id.

a. Notice Required Before Instituting Any Action

The third party purchaser must send the taxpayer notice by first-class mail with

proof of mailing, at least 45 days before instituting the action. 134.490. The notice must

inform the taxpayer that an enforcement action will be taken. Id. To send notice, the

purchaser must obtain the most recent address for the property owner from the office of

the property valuation administrator (“PVA”) of the county in which the real property is

located. Id. The purchaser need not send notice to any other party other than the owner

of record as provided by the PVA

. Id. Within 20 days of receipt of a notice returned as

undeliverable, notice must be re-sent by first-class mail with proof of mailing addressed

to the “Occupant” at the address of the subject property identified in the certificate of

delinquency. Id.

The notice of institution of an action must include:

(1) a statement that the certificate of delinquency is a

lien of record against the property evidenced by the

certificate of delinquency;

(2) a statement that the certificate bears interest at the

rate of 12% per annum;

(3) a statement that if the certificate is not paid, it will

be subject to collection as provided by law, and that

collection actions may include foreclosure;

(4) a complete listing of the amount due, as of the date

of the notice, broken down as follows:

a. purchase price of certificate;

If a third party purchaser is aware of a more recent or accurate address for the delinquent

taxpayer that is different from the address provided by the PVA, the purchaser must send notice

to the updated address and notify the PVA of the updated address. 134.490.

b. interest accrued after purchase of

certificate; and

c. fees imposed by the third party purchaser;

(5) for purchasers required to register with the

Department due to volume of purchases, and for

certificates purchased after June 1, 2012, a statement

informing the taxpayer that upon written request

and payment of a processing fee, the purchaser will

offer a payment plan; and

(6) information detailing the provisions of law relating

to the third party purchaser fees and charges.

Id.

b. Installment Plans

As mentioned above, those persons or entities that pay or intend to pay more than

five certificates of delinquency statewide, more than three in any county, or invest or

intend to invest more than $10,000.00 in payment of certificates statewide in a calendar

year, must provide a monthly installment payment plan to a taxpayer. 134.128; 134.490

The taxpayer and purchaser must sign an agreement detailing the terms of the

installment plan and the purchaser may impose a processing fee, not to exceed $8.00 per

month for administrative costs. 134.490. Upon default on an installment plan, the

purchaser retains all amounts paid – applied to the outstanding balance due – and the

purchaser is not required to offer the taxpayer another opportunity for an installment

plan. Id. A purchaser who is not required to register with the Department for volume of

purchases, may still voluntarily offer an installment plan to the taxpayer. Id.

The Department of Revenue has developed a payment plan calculator that is posted at

http://revenue.ky.gov/property+tax.

III. Redemption

A foreclosure action is initiated in the circuit court of the county where the

property is located. The Master Commissioner then has the property appraised and sets

a time for the foreclosure sale. The third party purchaser can actually bid at the sale and

if it is the high bidder, can become the new owner of the property. But if property is sold

pursuant to a judgment of foreclosure, and it does not bring two-thirds (2/3) of its

appraised value, the taxpayer (Defendant) and his or her representatives may redeem the

property within six months from the day of sale. 426.530. To redeem, the

defendant/taxpayer must pay the original purchase money, 10% per year interest, and

any reasonable costs incurred by the purchaser after the sale for maintenance or repair of

the property, utility expenses, insurance, association fees, taxes, etc. Id. The

defendant/taxpayer pays the redemption amount to the clerk of the court where the

judgment was rendered or the order of sale was made. Id. Upon payment by

defendant/taxpayer, the Master Commissioner conveys the property to the

defendant/taxpayer. Id. When the right of redemption exists, the purchaser will receive

an immediate writ of possession and deed containing a lien in favor of the

defendant/taxpayer, reflecting the defendant/taxpayer’s right to redeem during the

statutory period. Id. If there is no purchaser at the foreclosure sale, the Master

Commissioner then issues a deed to the owner of the certificate of delinquency and that

person has a pro rata interest per the amount of their certificate(s). 134.546.

IV. Sales of Certificates of Delinquency Owned by the State, County, or Taxing

Districts

If the state, county, or a taxing district owns a certificate of delinquency, it not only

has the right to commence an action for amounts due on the certificate of delinquency,

but it also has the right to distrain and sell any property owned by the delinquent

taxpayer. 134.546. After the state, county, or taxing district obtains the real property, the

agent of the commissioner may advertise and sell at a public sale, any of the lands and

the commissioner may convey the lands by deed to the purchaser. 134.549. The sales are

advertised by notice posted at the courthouse door for 15 days before the date of sale and

by publication in the newspaper of general circulation. Id. Any real property acquired

by the state, county, or taxing districts may be redeemed at any time before the

commissioner gives a deed to the purchaser. Id. To redeem, the taxpayer must pay the

county clerk the amount due when the property was acquired, plus subsequent costs and

interest at the rate of 12% per year. Id.

HOME RULE CITIES IN KENTUCKY

REAL PROPERTY TAX LIEN SALES

I. Real Property Delinquent Tax Liens in Home Rule Cities

Any city in Kentucky may elect to have all city property taxes, including

delinquent taxes, collected by the county sheriff. 91A.070. If the city elects to have the

county sheriff collect its taxes, the sheriff collects the property taxes, including delinquent

Home rule cities comply with Chapter 92 of the Kentucky Revised Statutes. Chapter 91A

provides additional guidance. Should the specific city choose to have the sheriff collect taxes on

its behalf, the relevant statutory guidelines are contained in Chapter 134.

taxes, in the same manner as the county taxes are collected, as provided in KRS Chapter

134 and outlined above. Id. Alternatively, if a city does not elect to have its taxes collected

by the county sheriff, the city must establish its own procedures for the collection of

property taxes. Id. The city’s ordinance for its tax collection procedures must specify:

(a) the date the city property taxes are due and payable;

(b) the manner of billing;

(d) discounts, if any, for early payment;

(e) any penalties and interest for late payment or nonpayment; and

(f) any other necessary procedures related property tax administration, so

long as the procedures do not conflict with state law.

Id.

For the cities that elect to create their own property tax collection procedures, real

property taxes are considered delinquent if they are not paid by the due date created by

that city’s ordinance or statute. Id. Just like the county tax liens, the city tax liens are

superior to all other liens, except for state taxes. Id. The city may enforce the lien by

action in the name of the city in the Circuit Court as provided by statute and it may also

obtain a personal judgment against the delinquent taxpayer for the tax, penalties, interest,

and costs of the suit. Id. Any city that establishes penalties and interest for late or

nonpayment of property taxes may also provide an amnesty program for forgiveness or

reduction of a taxpayer’s accumulated penalties and interest in previous tax years. Id.

II. City’s Collection of Delinquent Taxes and Actions to Collect or Enforce

a. Individual Action

A city in Kentucky can use different methods to collect on its delinquent taxes. A

city can enforce its lien through individual action 91A.070; 134.546. This method is

consistent with the method used by third party purchasers in the counties. 134.546. The

city sues in the Circuit Court and/or asserts an action to obtain a personal judgment

against the delinquent taxpayer for the tax, penalties, interests, and costs of the suit.

91A.070.

b. Mass Foreclosures

Another method for collecting on the delinquent taxes, is to conduct “mass

foreclosures.” 91.487-91.527; 92.810. If the delinquent taxes remain unpaid for six

calendar months from the date they became due, the collector of the taxes can sue in the

Circuit Court against the land or lots to enforce the city’s lien. 91.487. A defense to an

action for recovery of taxes against real property is that the action was not commenced

within seven years after delinquent. Id. The owner, or any person with interest, in the

lot or land with the delinquent tax lien can release the tract of land or lot from the city’s

lien by paying the taxes owed with interest from the date of the delinquency. Id. If a

lawsuit has already commenced, the person paying the delinquent taxes must pay the

taxes owed, interest, costs including attorneys’ fees, and costs incurred in the court where

the suit is pending. Id. The collector can bring these delinquent tax lawsuits for multiple

tracts of lands or lots in one action, known as a mass foreclosure. 91.488. Each separate

tract or parcel joined in one action must be plead as separate counts. Id. KRS 91.4881

provides the form and contents that must be contained in a petition for a mass

foreclosure. 91.4881. The petition will have the same effect, with respect to each parcel

named therein, as a separate suit against any one of the tracts or parcels. Id. To that end,

the invalidity of any of the separate counts does not affect the validity of the rest of the

counts. Id.

Within 30 days of filing the lawsuit, the collector publishes a notice of the

enforcement suit in the local newspaper. 91.4883. Additionally, within 30 days of filing

the lawsuit, the collector prepares and mails by certified first class mail, a brief notice of

filing the suit to any taxing authority or person or record owning or holding any tax bills

or claiming any right, title, or interest in or on the property or lien attached to it. 91.4884.

A master commissioner conducts the foreclosure sale. 91.4885. Before the sale, the

collector must file an affidavit with the court about the most recent certified tax

assessment or each parcel and that assessment will be the PVA’s last assessment certified

the Department. Id. Each parcel is sold separately by individual count number and the

master commissioner must then issue a report of sale to the court. Id. Any collection suit

pending at the commencement of another collection suit brought affecting the same land,

will be consolidated. 91.501; 92.810.

c. Redemption

Any time before the sale of the property, an interested party can redeem by

discharging a city lien or satisfying a judgment in favor of the city by paying all the sums

mentioned in the petition, including principal, interest, penalties, and costs due. 91.511.

If the property is sold under the assessed value certified by the Department, the owner

can redeem the property within 60 days from the date of sale by paying the purchaser the

purchase amount with interest at 18% per year. Id. When the right of redemption exists,

as described above, the owner can remain in possession of the property until the 60 day

redemption period expires. Id. If a party redeems the property from a tax bill lien, the

party has to pay – in addition to the other amounts owed – one dollar ($1) per parcel of

real estate for issuance of the certificate, five dollars ($5) per parcel of real estate if notice

of publication has commenced, and five dollars ($5) as an additional charge for each

parcel of real estate if notice of the sale has commenced. 91.524. If redeemed, the sale is

considered null and void. Id. If not redeemed, the owner or any other interested party

are forever barred of all right, title, and interest in the property described in the petition.

Id.

After the sale and expiration of the right of redemption, title to the property vests

in the purchaser. 94.514. Title is an absolute estate in fee simple, subject to rights-of-way

of public utilities and subject to any right of redemption of the United States of America,

if any. Id. Anyone who may have had any right, title, interest, or claim or equity of

redemption, or lien on the Property shall be barred of the same and the purchaser is given

immediate possession of the property. Id. Title to the property is subject to the liens of

any tax bill that may have attached to the property before the filing of the petition, or that

may have attached after the filing of the petition but before the expiration of the

redemption period. Id. If the property is sold to the city or a land bank, the title is free of

any liens to the extent of the interest of any taxing authority in the property. Id.

d. Distribution of Proceeds from Tax Sale

After a master commissioner sells property, the court holds a hearing to confirm

the sale. 91.517. If the sale is confirmed, the court then orders the proceeds from the sale

be applied first to the payment of all costs, including court costs, publication costs, and

any other costs associated with the action and sale of the property and then to the

payment of all tax bills on the property, including principal, interest, and penalties. Id.

If there are excess proceeds, the court then tries to determine any other issues in the suit

regarding that piece of property and if any of the answering parties have appealed the

court retains custody of the excess funds pending disposition of the appeal. Id. After the

disposition of the appeal, the court then distributes the funds. Id. If there are insufficient

proceeds from the sale to pay all the claims, then the court orders the claims to be paid in

accordance with the priorities. Id. If there are remaining funds after distribution as

described above and no one is entitled to the funds, the funds escheat to the state. Id.

e. Land Banks

Cities also may create, by interlocal agreement with the state and local school

districts, a land bank authority (“Authority”). 65.350-65.375. The Authority holds in its

name all tax delinquent properties, as well as properties conveyed to it and properties

having local government liens attached to it. 65.370. A land bank receives tax delinquent

properties when no person bids an amount equal to the full amount of all tax bills,

interests, and costs owing on the property at a tax sale. 65.375. The Authority is required

to create an inventory of the properties it holds and make the inventory public record.

Id. The Authority has the power to manage, maintain, protect, rent, lease, repair, insure,

alter, sell, trade, exchange, or otherwise dispose of the property. Id. When the Authority

acquires a property, all state, county, city, and school district taxes are extinguished. Id.

For five years following any conveyance of a property subject to ad valorem real property

taxes from the Authority to an owner, 50% of the ad valorem property taxes collected

from the property must be remitted to the Authority. Id. If no one bids the amount equal

to the full amount of tax bills, interests, and costs, the Authority is then deemed to have

bid the full amount regardless of whether or not they are a party to the lawsuit. 65.375.

The Authority need not make an actual payment to the court for the amount it is deemed

to have bid. Id. The court then treats the amount deemed to have been bid as cash

received and upon proper motion by the Authority, the court makes a deed for the

property to “Land Bank Authority.” Id. Title to the property is an absolute estate in fee

simple, free and clear of all tax bills, interests, and costs due and owing; however, title is

subject to rights of way of public utilities and any right of redemption of the United States

of America. Id. When the Authority sells or otherwise disposes of the property as part

of its land bank program, the sale proceeds are distributed to the party who brought the

action resulting in the acquisition of the property to the land bank for all costs incurred

and any remaining proceeds are distributed to the parties in proportion to their respective

tax bills. Id.

CONCLUSION

Since Kentucky gives its cities the ability to self-govern their tax sales, when

purchasing delinquent tax properties in Kentucky it is important to know whether the

sheriff is collecting on behalf of a county or whether the city is collecting. That is the first

step in determining the procedures to follow. Kentucky sells its tax liens and gives the

prior owner the chance to redeem at any time prior to the initiation of a lawsuit. An

additional redemption period is given when the property is sold under the assessed

value. When sold under the PVA’s assessed value, an owner can redeem within 60 days

of the date of sale. A purchaser has 11 years from the date the taxes become delinquent

to foreclose. It is critical to stay apprised of any legislative changes or legal decisions

impacting the tax sale process. It is also important to familiarize yourself and contact the

collecting official in the particular county or city to stay informed on their sale dates and

the general procedures that the specific city or county follows.