A tax certificate is an enforceable first lien against the real estate. The certificate holder is actually paying the delinquent taxes, interest, costs, and charges for the property owner in exchange for a competitive bid rate of return on his or her investment.
Tax certificates are dated as of the first day of the tax certificate sale and have a life of seven years from that date. After two years from April 1 of the year the certificate was sold, the certificate holder can initiate a tax deed application that will result in the loss of the property if the taxes remain unpaid. If the certificate is not redeemed or a tax deed application is not made within the seven year period, the certificate is null and void, and the holder will not receive a return on his investment.
Tax Certificates are not knowingly sold on parcels involved in bankruptcy or litigation. If bankruptcy or litigation occurs after a tax certificate is issued, the court may determine the amount of interest to be paid. Bankruptcy and litigation may extend the life of a tax certificate, and place an automatic stay on the Tax Deed Application process.