April 5, 2021
In June 2020, the Alabama Supreme Court issued an Opinion in Stiff v. Equivest Financial, LLC, where the Court held that a 2013 Bessemer tax sale occurring inside the courthouse — and not on the front steps of the courthouse as required by Ala. Code § 40-10-15 — was void. Because the practical effects of the Stiff decision could invalidate tax sales all over the state of Alabama, the Alabama legislature moved quickly to remedy this legislative issue, and so Senate Bill 111 was born.
Senate Bill 111 was first read on February 2, 2021 and was submitted to the Governor for her signature on April 1, 2021. Senate Bill 111, once adopted, will amend the language of Ala. Code § 40-10-15 to allow for tax sales to be conducted “on the premises of or within the courthouse” as opposed to strictly “in front of the door of the courthouse.” This amendment will allow Alabama counties the flexibility to conduct tax sales inside and outside the Courthouse. That allows counties to decide what makes the most sense and is the most efficient for that particular county.
Most importantly, Senate Bill 111 is intended to be retroactive. Section two of the Bill explains that it is “remedial and curative and shall be retroactive to validate any prior sale of land for taxes conducted in accordance with this act.” This will give tax sale purchasers an argument that tax sales held inside that would have been voided by Stiff are now considered valid, so long as they were otherwise conducted in accordance with the amended provisions of Ala. Code § 40-10-15.
Nelson Mullins, who submitted an amicus brief on behalf of the National Tax Lien Association in Stiff, has been continuing to monitor this case, the issues it potentially creates, and the remedial legislation. Please contact Matt Abee, Randy Saunders, or Megan Ware-Fitzgerald from the Tax Lien Resolution and Litigation Team at Nelson Mullins Riley & Scarborough LLP should you have any questions about the Court’s decision, questions about any practical implications caused by the decision, assistance in initiating an action to quiet title in light of the Court’s decision, and/or any questions regarding prior tax sales once the legislation is adopted.
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