Maryland Counties

Real Estate Auction in Maryland

Maryland is considered a tax lien state. In Maryland, when property taxes are not paid by the property owner, the local government has the authority to place a tax lien on the property. This tax lien represents the amount of unpaid taxes owed by the property owner.

Any unpaid property taxes constitute a lien on the property from the date they are due until they are paid. A lien is a debt attached to your property, like a mortgage. County-specific local charges can be added to this lien. State law requires each County’s Collector of Taxes to sell these tax liens to collect delinquent taxes and other fees owed to the County. The tax liens are sold as “tax lien certificates” through what is called a “tax sale.”

THE TAX SALE PROCESS

The tax sale process in Maryland involves the sale of tax lien certificates through public auctions. The process can be summarized as follows:

NOTICE OF SALE: The Collector of Taxes sends a notice to the property owner, stating the amount of taxes due and the requirement to pay or risk the property being sold. After the notice period, the properties to be sold are advertised in local newspapers, providing details such as the sale date, time, place, property description, and tax sale amount.
THE CERTIFICATE OF SALE: Within about six months after the tax sale, the purchaser receives a certificate of sale from the Collector, confirming the sale of the tax lien certificate. The certificate includes relevant information such as the sale date, amount bid, advertised amount, and redemption interest rate. The certificate remains valid for two years unless the purchaser initiates foreclosure proceedings.
REDEMPTION BY OWNERS: The property owner has the right to redeem the property by paying the required redemption amount to the Collector of Taxes. The homeowner can prevent the purchaser from gaining ownership through redemption. The redemption amount includes the initial tax debt, interest, and subsequent taxes with related interest and penalties. The owner can continue to possess and exercise ownership rights until the right of redemption is foreclosed by court order.

Foreclosure in Maryland

Yes, Maryland is a judicial foreclosure state. In a judicial foreclosure, the foreclosure process is handled through the court system, and the lender is required to file a foreclosure complaint with the circuit court in the county where the property is located. The court oversees the foreclosure proceedings and issues a judgment of foreclosure if the borrower is found to be in default. The court then sets a date for the foreclosure sale, and the property is sold at a public auction.

Foreclosure Process in Maryland

In Maryland, the foreclosure process is primarily a judicial process that involves the court system. Here is an overview of the foreclosure process in Maryland:

Notice of Intent to Foreclose: Before initiating a foreclosure, the lender must send a notice of intent to foreclose to the borrower at least 45 days before filing a foreclosure action. This notice provides information about the default, the amount owed, and the borrower’s right to cure the default.
Foreclosure Complaint: If the borrower fails to cure the default within the given timeframe, the lender can file a foreclosure complaint with the circuit court in the county where the property is located. The complaint initiates formal foreclosure proceedings.
Service of Process: The borrower is served with a copy of the foreclosure complaint, typically through personal service or certified mail. The borrower has a specific period to respond to the complaint, usually within 30 days.
Foreclosure Mediation: In some cases, Maryland law requires lenders to offer foreclosure mediation to borrowers. Mediation provides an opportunity for the borrower and lender to explore alternatives to foreclosure and potentially reach a resolution.
Foreclosure Sale: If the borrower fails to respond to the foreclosure complaint or if mediation does not result in a resolution, the lender can obtain a judgment of foreclosure. The court then sets a date for the foreclosure sale, which is typically conducted by a public auction.
Notice of Sale: Prior to the foreclosure sale, notice of the sale must be published in a local newspaper and posted on the property. The notice includes information about the date, time, and location of the sale.
Foreclosure Sale: The foreclosure sale is conducted as a public auction, typically at the courthouse or other designated location. The property is sold to the highest bidder, who is often the lender. If another party purchases the property, they must pay the bid amount in cash or certified funds.
Redemption Period: Following the foreclosure sale, Maryland provides a redemption period during which the borrower can redeem the property by paying the full amount owed, plus costs and fees. The redemption period is generally six months but can be shorter in certain circumstances.
Eviction: If the borrower does not redeem the property within the redemption period, the new owner can initiate eviction proceedings to take possession of the property.