The following facts derive from the opinions of two appearances before the Georgia Supreme Court. Community Renewal and Redemption, LLC v. Nix, 279 Ga. 840, 621 S.E.2d 722 (Ga. 2005); and Id., Case # S10A1727 (Ga. January 10, 2011). The latter case is subject to change until published in final. I supplement with information gleaned from the Dekalb County records.
On December 7, 1993, Dekalb County sold subject property at tax sale and bought it in for $944.03, there being no other purchasers. On February 9, 1999, the county conveyed the property by quit-claim deed to Geraldine H. Nix for $14,000. Nix, together with Aaron Nix, had earlier executed and delivered to NationsBank, N.A. (now Bank of America) a security deed encumbering the property. The security deed was dated November 10, 1998, recorded November 30, 1998 and secured a debt of $13,395. So, the security deed, which contained a general title warranty, preceded the conveyance from the County by about three months.
On January 20, 2003, the delinquent taxpayer quit-claimed the property to Community Renewal and Redemption, LLC (“CRR”). CRR tendered the redemption price of $16,000 to Nix on January 29, 2003. Nix refused the tender, and CRR filed suit. CRR learned about the security deed in Nix’s deposition in October, 2003. CRR added the Bank to the complaint in early 2004. In June 2007, CRR filed in the trial court a motion purporting to tender to Nix and the Bank.
On cross-motions for summary judgment, the trial court ruled that title vested in the County before its sale to Nix and that CRR could therefore not redeem. The Georgia Supreme Court reversed. The trial court failed properly to account for the 1989 amendment to O.C.G.A. § 48-4-48, which established that the ripening of title under a tax deed must occur by prescription, not by the mere passage of time.
On remand, the trial court granted Nix’s motion to dismiss on the basis that CRR failed to tender the redemption price to the Bank before filing suit. CRR again appealed.
The Supreme Court based its ruling on these principles:
A delinquent taxpayer may redeem the property following a tax sale by paying the redemption price within twelve months after the sale or thereafter until the first to occur of (a) foreclosure of the right to redeem or (b) ripening of the purchaser’s title through prescription. O.C.G.A. §§ 48-4-40, -45, -49.
The taxpayer must tender the redemption price before filing of the redemption action to the party entitled to payment, and the tender must be continuous unless waived by declaration or conduct. Mark Turner Properties v. Evans, 274 Ga. 547(3), 554 S.E.2d 492 (2001); Machen v. Wolande Management Group, 271 Ga. 163, 165; 527 S.E.2d 58 (1999); Forrester v. Lowe, 192 Ga. 469, 475-476; 15 S.E.2d 719 (1941); Durham V. Crawford, 196 Ga. 381, 26 S.E.2d 778.
The purchaser of a tax deed, such as Nix, holds a defeasible title, subject to redemption, which may be conveyed during the redemption period. Durham v. Crawford, supra, 196 Ga. at 386.
If the grantee in a security deed is the last holder, failure to tender the redemption price to that holder before filing suit for redemption is a bar to the prosecution of the case. Herrington v. Old South Investment Co., 222 Ga. 428, 150 S.E.2d 623 (1966)
CRR’s pre-suit tender to Nix and subsequent tender to the Bank long after adding the Bank to the redemption action failed to meet the legal requirement that tender to the proper party must be made prior to filing suit. The Court affirmed the trial court’s dismissal of CRR’s action.
1. The Court, in a footnote and on the basis of after-acquired title, discounted as irrelevant the fact that the security deed predated the vesting deed.
2. A taxpayer should search title to the property before tendering payment of the redemption price and be certain to pay the right party. Note, however, that, in this case, the security deed likely would have been outside the chain of title even if CRR had examined title, according to Section 2.2 of the Georgia Title Standards:
In examining a title, the examiner is required to search only for properly indexed and recorded instruments in the chain of title. For this purpose the following instrument is outside the chain of title: . . . an instrument from a person in the chain of title recorded prior to the date of the deed conveying title into that person in the absence of other circumstances which point to the existence of the instrument.
Perhaps CRR could have prevailed had it exercised reasonable due diligence by checking title and promptly tendering to the Bank upon learning of the existence of the security deed. Note this part of the Bank’s holding: “Accordingly, we find that
2. On what basis did the bank extend the loan to Nix? The loan appears to have been to Aaron Nix and Geraldine Nix, individually, so there was personal liability; there may have been sufficient worth behind that obligation and the security deed was given for “abundance of caution” purposes.