Issuance of Treasurer's Deeds

Under current law, a county treasurer is required to issue a treasurer's deed for a property upon the presentation of a certificate of purchase of a tax lien for that property, if certain conditions are met. The act ends this requirement, effective July 1, 2024, and instead requires a county treasurer to follow a public auction process prior to the issuance of a deed, which process brings Colorado law into compliance with the United States supreme court's recent decision affirming property owners' constitutional right to the value of their property in excess of their tax debt.

The lawful holder of a certificate of purchase of a tax lien (lawful holder) may apply for a public auction for the sale of a certificate of option for treasurer's deed (option certificate). If the public auction results in an "overbid", meaning the purchaser of the option certificate pays an amount in excess of the minimum bid price set for the auction, then the overbid must be paid in order of recording priority to junior lienors who have filed a notice of intent to redeem. After payment to all lienors, any remaining overbid must be paid to the owner of the property subject to the tax lien.

The act specifies the required application form and deposit amount for a lawful holder to request a public auction and the notice requirements that a county treasurer must comply with, including a review of the property's title work to include known interested parties in the notice process. The act also specifies the general manner and timing requirements for the public auction and provides county treasurers with procedural guidance in case of certain events, including continuance of the public auction, the effect of a bankruptcy filing related to the property, the withdrawal of a notice of public auction, and the redemption of the tax lien prior to the public auction.

At the public auction, a county treasurer must only accept bids that are greater than the combined value of the amount owed to the lawful holder and the fees and costs incurred by the treasurer in complying with the act. If no such bid is made and paid to the treasurer, then the lawful holder is deemed the purchaser of the option certificate.

If the lawful holder is not the purchaser of the option certificate, the lawful holder is still entitled to redeem the property subject to the tax lien if certain procedural requirements are met, including payment to the purchaser of all sums necessary to redeem. Junior lienholders may also file for redemption, but only as to a portion of the overbid, and only if certain procedural requirements are met. If the property remains unredeemed, the lawful holder of the option certificate may present the certificate, along with other required documentation, to the treasurer and obtain a treasurer's deed, giving full rights to the property.

APPROVED by Governor May 10, 2024

EFFECTIVE July 1, 2024
(Note: This summary applies to this bill as enacted.)