Savannah Not Liable for Demolishing Building on Land Previously Bought at Tax Sale

The Georgia Court of Appeals affirmed summary judgment for the City of Savannah against claims for trespass and the value of a vacant building brought by investors who had bought the building at a tax sale.  Brown Inv. Group LLC v. The Mayor & Aldermen of the City of Savannah, Case No. A10A0311, Decided May 5, 2010.  The investors bought the building at a tax sale and acquired a tax deed to the property on August 1, 2006.  The city decided that the building on the property was unsafe and demolished it on July 25, 2007, just less than one year after the date on the tax deed.  In Georgia, after a tax sale, there is a one year right of redemption of the property sold pursuant to OCGA § 48-4-40(1). The investors sued, and the city filed a motion for summary judgment claiming that the investors lacked standing because they did not hold legal title to the property.  The Court of Appeals affirmed the validity of this argument.

In order to make a claim for trespass the plaintiff must show either that he was the true owner with legal title or that he had possession at the time of trespass.  The tax deed did not convey legal title, instead it conveyed an inchoate or defeasible title subject to the owner's right of redemption.  Thus, when the building was demolished there was still a right of redemption by the former owner of the property, and the investors lacked standing to make a trespass claim.  The result of this case is that purchasers of property at a tax sale have no ability to file suit for property damage that occurs during the one year right of redemption period.  This greatly increases the risks associated with property bought in a tax sale.