Nebraska ~ Property Tax: State High Court Finds Trustee Deed Purchasers Not Entitled to Relief

CCH Tax Day Report

The Nebraska Supreme Court has found that taxpayers who purchased a trustee’s deed were negligent and that the doctrine of caveat emptor (“buyer beware” ) applied since the taxpayers did not look to see that the property was previously sold at a property tax sale and that the deed was recorded. The taxpayers purchased the trustee’s deed, that had been held by a bank, for over $40,000. Prior to their purchase, the property had been sold to another taxpayer due to delinquent property taxes but neither the taxpayers not the bank were notified of the sale. The court stated that had the taxpayers examined the title, they would have realized that the treasurer’s tax deeds had been issued and that the trust deed had been divested of title. A purchaser of real estate, according to the court, is required to take notice of instruments properly placed of record in the office of the register of deeds. As a result, the court ruled that the district court erred when it relieved the taxpayers of the consequences of their inattention, determined that the trustee’s sale was void, and ordered that the bank return the purchase price to them.

Klein v. Oakland/Red Oak Holdings, Nebraska Supreme Court, No. S-15-380, August 26, 2016, ¶201-246

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