Obtaining a return on a tax lien investment can have a long time horizon in Georgia. After purchasing a tax lien, an investor must wait at least a year before foreclosing the right of redemption of the tax debtor, taking possession of the property, and potentially quieting title. In some situations, the tax lien investor may choose not to foreclose the right of redemption after one year. The investor is entitled to “20 percent of the amount” paid for the first year and “10 percent for year or fraction of a year thereafter”. O.C.G.A. § 48-4-42(a). As such, depending on the circumstances and specific investment strategy, an investor may wait many years prior to taking any action to foreclose the right of redemption while the redemption amount increases. The passage of time is not only a factor post-investment. It is generally a factor as to why properties come up for a tax sale in the first place. Quite frequently, properties go to a tax sale when the owner is deceased and the taxes have not been paid in years.

Given the longer time horizon around tax lien investments, a practical reality of litigation of issues such as quiet title actions is that interested persons are deceased or die in the process. Recently, the Georgia Court of Appeals reversed a grant of summary judgment in a quiet title action in favor of a tax sale purchaser because one of the prior owners was deceased at the time that the order was entered. The Court of Appeals discussed that “[i]t is well settled that a deceased person cannot be a party to legal proceedings. The effect of the death is to suspend the action as to the decedent until someone is substituted for the decedent as a party to the proceedings. Until someone is properly substituted as a party after the action is thus suspended, further proceedings in the case are void as to the decent.” Brown v. Green Growth 2, LLC, 2024 WL 3196872, at *1 (Ga. Ct. App. June 27, 2024). In other words, the litigation through the trial court and Court of Appeals was effectively void because the right parties were not named.

These situations may be avoidable, and to do so in a longer time horizon situation such as tax lien investing where deaths and estate issues are common, it is important to assess proper party on the front end of a quiet title action to maintain efficiency in the litigation.

The practical effect of the Green Growth case is that the tax lien investor, already working under a long time horizon to obtain a return, is significantly delayed in its quiet title action, acquisition of marketable title to the property, and obtaining a return on its investment. These situations may be avoidable, and to do so in a longer time horizon situation such as tax lien investing where deaths and estate issues are common, it is important to assess proper party on the front end of a quiet title action to maintain efficiency in the litigation. This can include not only ensuring that a successor to a decedent is named as a party, but also ensuring that any necessary heirs are included.