Landnews

Duties of an Attorney Ad Litem in a Tax Sale

  • 1.  Duties of an Attorney Ad Litem in a Tax Sale

    Posted 07-16-2020 11:49
    Edited by Leslie Knox 07-21-2020 13:18

    Question:  Is it illegal or unethical to act as an appointed attorney ad litem for unknown heirs in a tax case, then later buy the property at a tax sale?  Does later buying the property at a tax sale call into question the attorney ad litem's attempt to locate?  At what point do you question "clean hands"?

    A broker takes a lease from heirs of last owner of record, and heirs have a documented history of questioning the broker regarding the validity of his title work and that said heirs actually own an interest.  A few years later, it’s discovered that a sheriff’s tax deed from 10 years prior was missed in the title work, and the warranty clause in the lease requires the lessor to return the bonus.  


    However, to what standard is an appointed attorney ad litem in a tax case held if it appears there was a less than moderate attempt to locate the unknown heirs, even further, if it appears that the AAL merely rode the coattails of the tax collection firm hired by the taxing entity and simply accepted their findings.  What is considered adequate defense of a tax suit by an AAL?  Further, is it unethical for an AAL to later participate in the tax sale?  Can the AAL individually participate in the tax sale and purchase the property?

    This is complicated by the fact that, in this particular county, for many, many years, the Sheriff's Tax Deeds or Tax Deeds have been improperly indexed under the Sheriff's name, with no indexing for the Defendant in the tax suit.  This tax deed may have been one of them.  Since the indexing is constantly being corrected with the hiring of Kofile and the advent of better online records, we don’t know about ten years prior.   It is helpful to have a list of sheriffs in this county and the dates of their terms when working on title.  I have found many, many tax deeds that were pertinent to my title by employing this list.  Indeed, they were improperly indexed.

    AGAIN, MY QUESTION:  ILLEGAL OR UNETHICAL OR JUST OK TO ACT AS AN ATTORNEY AD LITEM FOR UNKNOWN HEIRS IN A TAX CASE, AND THEN LATER PURCHASE THE PROPERTY AT THE TAX SALE?


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    Leslie Knox
    Jewell 49, LLC
    Pecos TX
    (432) 559-9462
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  • 2.  RE: Duties of an Attorney Ad Litem in a Tax Sale

    Posted 07-19-2020 21:15
    It certainly sounds unethical. 

    Your client needs to consult an attorney licensed in the state in which the minerals are located (I'm not an attorney). Waiting to get sued may be the wrong answer.  Most states have a statute of limitations beyond which your client will be unable to challenge a tax sale/sheriff's deed, even if it was procured through underlying wrongdoing.   An attorney can help her understand the deadlines for taking action. 







  • 3.  RE: Duties of an Attorney Ad Litem in a Tax Sale

    Posted 07-20-2020 12:38
    Probably unethical and perhaps a voidable transaction for the purchase by the attorney ad litem.  It certainly sounds like a conflict of interest, in this case an actual conflict which may well have affected the diligence of the attorney in seeking out the heirs.

    Unfortunately, this kind of insider practice is all too common in situations where attorneys or guardians are appointed to represent some vulnerable or unaware or incompetent party, and then profit unethically from the representation.

    Similarly, for many decades, when Louisiana sheriffs auctioned off seized property, their notices of the auctions of valuable property often only went out to their cronies.

    Unfortunately, ingrained unethical practices can be very hard to challenge, especially when you are challenging an "insiders" network.

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    [Paul] [Grant]
    Landman-Lawyer
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  • 4.  RE: Duties of an Attorney Ad Litem in a Tax Sale

    Posted 07-21-2020 14:43
    Hi Paul,

    Thank you for your thoughtful comments.  Yes, especially in a small town where the AAL pool is small, could become a legitimized yet unethical practic e.

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    Leslie Knox
    Jewell 49, LLC
    Pecos TX
    (432) 559-9462
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  • 5.  RE: Duties of an Attorney Ad Litem in a Tax Sale

    Posted 07-21-2020 13:45
    Keith,

    Thank you for your comments, and for the reminder on statute of limitations.

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    Leslie Knox
    Jewell 49, LLC
    Pecos TX
    (432) 559-9462
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  • 6.  RE: Duties of an Attorney Ad Litem in a Tax Sale

    Posted 07-19-2020 21:15
    Yes,

    In my humble opinion it is unethical, and I don't envision a way for the practice to take place that would add a level of transparency to the procedure.  My first though is a third party that could testify to their efforts to locate the absentee owners, that relationship could easily corrupted.  I suppose a provision in the Sheriffs deed could be made that if in the case that the absentee owners, their heirs and assigns return to title, that they will owe the tax sale purchaser the purchase price as well as the total tax paid for the property during the time of their absence.  Ad litem lawyer should not buy, let someone else buy or find buyer.  I have no idea if the act is unlawful or not.

    Eric


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    Stephen Neria
    Carnero, LLC
    Roswell NM
    (575) 840-0559
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  • 7.  RE: Duties of an Attorney Ad Litem in a Tax Sale

    Posted 07-21-2020 14:43
    Hi Stephen,

    Yes, unfortunately, I believe the window for right to redeem has passed some time ago.  That is why I am pointing to the actions of the AAL in this case.  Owners would have to file some sort of lawsuit questionning the AAL's attempt to locate, and it is highly unlikely that the Judge would set aside the tax deed, in my opinion.  I've only seen one other case where a judge in a district court case set aside a deed.

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    Leslie Knox
    Jewell 49, LLC
    Pecos TX
    (432) 559-9462
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  • 8.  RE: Duties of an Attorney Ad Litem in a Tax Sale

    Posted 07-19-2020 21:15

    Seems wrong to me for the ad litem to benefit.  Did the court know that was happening?   If so, it may be legal but the ethics is another story.    

    Alyce Hoge, JD, CPLTA, CDOA
    MIDLAND COLLEGE PLM CERTIFICATE, INSTRUCTOR
    www.landtraining.net



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    Alyce Hoge
    Land Training, LLC
    Foster City CA
    (832) 298-7791
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  • 9.  RE: Duties of an Attorney Ad Litem in a Tax Sale

    Posted 07-20-2020 10:33
    Local New Mexico attorney says tax deed will not meet the threshold for marketable title.  Says requires a quiet title case.

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    Stephen Neria
    Carnero, LLC
    Roswell NM
    (575) 840-0559
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  • 10.  RE: Duties of an Attorney Ad Litem in a Tax Sale

    Posted 07-21-2020 13:45
    Hi Stephen,

    I am most interested in this response, and thank you for your comments.

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    Leslie Knox
    Jewell 49, LLC
    Pecos TX
    (432) 559-9462
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  • 11.  RE: Duties of an Attorney Ad Litem in a Tax Sale

    Posted 07-20-2020 12:37
    I am not sure where the ethi8cs come in, unless fraud is involved. Firstly, whether it is an attorney or another person, ad litem(s) are all appointed by the court and no one can just appoint themselves. There are exceptions in bankruptcy and some civil matters involving children. Take out the court appointment and put yourself in the position as a broker and you tell me if self-dealing as you describe is unethical. I think the answer is pretty obvious.

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    Stephen Harris CPL
    HOC Operations, LLC
    oil.gas@gte.net
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  • 12.  RE: Duties of an Attorney Ad Litem in a Tax Sale

    Posted 07-21-2020 13:46
    Hi Stephen,

    "Take out the court appointment and put yourself in the position as a broker and you tell me if self-dealing as you describe is unethical. I think the answer is pretty obvious."

    In this instance, I don't believe there are ANY obvious answers.  I wasn't attempting to describe self-dealing, merely asking to what standard should an AAL be held when acting in a court-appointed position such as this one.  The broker shouldn't have to eat the bonus, either.  The Lessors warrantied title.  Their mistake.  Even if they had altered the warranty clause, there is still implied warranty.  I just think the whole AAL situation in small towns doesn't provide a lot of room for transparency, and that is unfortunate.

    Thank you for your comments.


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    Leslie Knox
    Jewell 49, LLC
    Pecos TX
    (432) 559-9462
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  • 13.  RE: Duties of an Attorney Ad Litem in a Tax Sale

    Posted 07-21-2020 13:45
    Alyce,

    My thoughts exactly.  Thank you for your comments.

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    Leslie Knox
    Jewell 49, LLC
    Pecos TX
    (432) 559-9462
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