11.005 Tax Title – Greater Than Reasonable Business Risk

Top  Previous  Next

Requirement 11.005

Tax Title – Greater Than Reasonable Business Risk

 

 Tax Title:  The abstracts reveal that the Tax Collector of DeWitt County, Alabama sold the captioned property  to the State of Alabama on January 4, 1965, for the non-payment of ad valorem taxes assessed to an unknown owner.  By tax deed dated January 5, 1968, and recorded in  Real Property Book 500, page 1, the State of Alabama conveyed the captioned property to Mary R. Purchaser, predecessor in title to your lessor.   According to the abstract, John Q. Owner  held record title to the captioned property at the time of the tax sale.  The abstract reveals that record title to the captioned property never left John Q. Owner.

 Due to the many problems associated with tax titles under Alabama law, you should rely upon the adverse possession of the captioned property by your lessor and her predecessors in title in order to perfect your title to your lease covering the captioned property.  The curative materials indicate that your lessor and  her  predecessors in title have exercised only intermittent adverse possession over the captioned property.  Therefore, there is a risk of title failure associated with the title of your lessor to the captioned property.  No one, however, has claimed the captioned property adversely to your lessor or her  predecessors in title in the past forty-four years, and your lessor and her  predecessors in title have exclusively assessed and paid ad valorem taxes on the captioned property since around 1966.

 Because the curative materials do not indicate that your lessor and her predecessors in title have perfected an adverse possession title against the possible claims of John Q. Owner or his heirs and assigns, the risk of failure to the title of your lessor is somewhat greater than what we normally characterize as a reasonable business risk.  Nevertheless, due to the lack of adverse claims and to the exclusive assessment and payment of ad valorem taxes by your lessor and her  predecessors in title, the risk of title failure, in our opinion, is acceptable.

 Requirement:  If you are unwilling to accept a risk of title failure to your lease covering the captioned property that is somewhat greater than a reasonable business risk, please advise us accordingly.

Copyright 2011 by Edward G, Hawkins. All rights reserved.