Indiana Senate Bill 524
On May 7th, 2015, Indiana Senate Bill 524 was signed into law. Senate Bill 524 overturns two Court of Appeals decisions regarding tax sales and helps level the playing field between the tax sale purchaser and parties challenging tax sales in two important ways.
Senate Bill 524 adds a requirement that tax sale notices be transmitted by certified mail, return receipt requested (green card), instead of just certified mail. In Gupta v. Busan, 5 N.E.3d 413 (Ind. Ct. App. 2013), the Indiana Court of Appeals expressly held that the tax sale statute did not require a purchaser to obtain return receipts. Under federal due process standards, this new requirement may trigger a correspondent duty by tax sale purchasers to take other action to effectuate notice if they do not receive a returned green card.
The law also makes changes to the process of petitioning for a tax deed. Under prior law, a petition for tax deed simply included a statement that the purchaser had complied with all noticing requirements, with no corresponding evidence. The purchaser was not required to preserve the evidence. When issued, a Tax Deed becomes prima facie evidence of the validity of the sale. Under this scheme, it was possible for a tax sale purchaser to send no notices at all, obtain a tax deed and then use the presumption to cut off challenges. This happened in First American Title Insurance Co. v. Calhoun, 13 N.E.3d 423 (Ind. Ct. App. 2014), where the purchaser admitted that he could not prove one of the tax sale notices was mailed. Because the purchaser already had a Tax Deed and a presumption in favor of the sale, the Court held that it was the challenger’s burden to prove the sale was invalid. In the absence of documentary evidence preserved by the purchaser, this was an impossible task.
SB 524 requires the purchaser to attach all the notices, envelopes, green cards and title evidence to the verified petition for tax deed in order to obtain a presumption as to the validity of the sale. If the purchaser fails to attach those items (making them part of the court’s record) then the purchaser must prove the validity of the sale by a preponderance of the evidence in any subsequent challenge. In counties that provide their own tax sale notices (Allen, Marion) the presumption arises only when the county produces the required information to the challenging party. This change allows potential buyers and title insurers to analyze the validity of the sale just by obtaining the verified petition from the court. It also gives challenging parties a fair chance to contest the sale in cases where the purchaser has lost or destroyed the notices.
Attorneys from Doyle Legal Corporation, working with the Indiana Land Title Association, drafted the statute and testified in favor of its passage during the 2015 legislative session. Please contact Kurt V. Laker with any questions regarding the new law.