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1. What is tax foreclosure?

When real property taxes become three years delinquent, the county Treasurer begins foreclosure action. A Certificate of Delinquency is filed with the county Superior Court. At this point, in addition to taxes, penalty and interest, foreclosure costs begin to accrue and increase monthly thereafter (RCW 84.64.050).

Prior to the sale, a title search is conducted for each parcel, chargeable to the owner of record in the Certificate of Delinquency. As required by law, all parties with recorded interest are sent notification in the form of a Notice and Summons that is published in a local newspaper per RCW84.64.050.

The Treasurer receives a tax judgment and order of sale from the court foreclosing on the tax lien, authorizing the sale of the parcel. Parcels included in the tax foreclosure process can be redeemed by the owner(s) of record in the Certificate of Delinquency or paid by any party with a recorded interest, up until the close of business on the day before the sale; thus removing the parcel from the sale. Tax foreclosure sales are usually held once a year.

2. Can prior owners redeem their property after foreclosure?

Prior owners have no rights to the property after foreclosure, UNLESS they were a minor or declared legally incompetent. Minors and those legally incompetent have the right to redeem the parcel any time within three years from the date of the foreclosure sale. If they do so, they must pay the sale amount, plus interest and penalty on the tax amount, if any. Any improvements made by the new owner would be reimbursed to the new owner by the prior owner upon prior owner's redemption (RCW84.64.070).

3. What happens to other liens on the property?

Normally, liens other than the Treasurer's real property tax lien on foreclosed property are not extinguished at our foreclosure sale. The IRS has a 120-day redemption period. If prior lien holders attempt to collect on their liens after the property has been foreclosed, it is entirely up to the new owner to defend against these claims (RCW84.64.080).

4. What happens to the excess proceeds?

If a parcel is sold at a foreclosure auction for more than the amount owing, the previous record title owner can claim the surplus money. This is the party who held title on the day the Certificate of Delinquency was filed. The previous record title owner has up to three years from the date of the sale to claim the excess proceeds (RCW84.64.080).