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Real Property Tax - Tax Sale

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1. What is a County Tax Sale?

A Tax Sale is a public auction of tax deeds and/or tax liens used to recover delinquent real property taxes. Maui County is authorized to tax, to collect on delinquent taxes and to conduct Tax Sales pursuant to Article VIII, Section 3 of the Hawaii Constitution; Chapters 246 and 246A, Hawaii Revised Statutes (“HRS”); and Chapter 3.48 of the Maui County Code (“MCC”).

2. Why does a county sell tax-defaulted property?

The primary purpose is to collect delinquent taxes. The back taxes, penalties and interest due are recouped by: (1) forcing payment of property taxes by a current property owner via threat of sale, or (2) via a public auction of delinquent property or tax liens. In Maui County, if a property is sold via tax deed sale, at auction, the proceeds in excess of the taxes and costs of a sale may be claimed by the former owner and other lien holders.

3. Where can I find the date, time and location of tax sales?

Date, time and location are made public at least 4 weeks prior to the Tax Sale. Tax Sale notices will be posted at the following locations:
1) Real Property Tax Division, County of Maui Service Center, Maui Mall, Kahului;
2) Kalana O Maui (County building), 200 S. High Street, Wailuku;
3) Hoapili Hale (Judiciary building), 2145 Main Street, Wailuku;
4) Molokai Real Property Tax Office, Mitchell Pauole Center, Kaunakakai;
5) Lanai Senior Center, 309 Seventh Street, Lanai City, and
6) County of Maui website

In addition, Maui County Tax Sales are advertised in the Honolulu Star-Advertiser and The Maui News at least once a week for at least four successive weeks immediately prior to the Tax Sale. Maui County Tax Sales will be advertised in the Molokai Dispatch once within the four weeks prior to the Tax Sale. You may also find the “Notice of Proposed Sale of Real Property for Failure to Pay Real Property Taxes Due Thereon” on the County of Maui website at: www.mauicounty.gov. For general information regarding parcels in Maui County refer to: www.mauipropertytax.com.
County of Maui Website

4. Do I need to register for the tax sale?

No, there is no registration for the Tax Sale.

5. How is the upset price determined?

The upset price is the sum of the real property taxes owing, penalty and interest accrued to the date of the auction and all other costs, expenses and charges incurred relating to the Tax Sale.

6. What type of payments will be accepted at the tax sale?

The County of Maui will accept cash, certified check, cashier’s check or money orders. No personal checks, debit card or credit card payments will be accepted. We recommend that you bring a cashier’s check payable to yourself for the maximum amount you intend to bid. If you are a successful bidder, you can endorse the check to “County of Maui Director of Finance”. Any overage will be returned to you in the form of a County of Maui credit memo. Credit memos will be converted to County of Maui checks after the auction date. Credit memos can be used to purchase additional parcels.

7. Is payment in full required on the day of the tax sale?

Yes. You must have full payment with you as you will not be allowed to leave the building to get payment. The County of Maui does not offer a financing program.

8. Can I bid on and purchase property on behalf of another party?

Persons bidding as representatives of others will be required to present notarized documents showing authorization to bid on behalf of the parties they represent.

9. What type of deed will be issued at the tax sale?

A tax deed will be prepared by the County of Maui and given to successful bidders. A tax deed does not have any warranties. Title Guaranty has informed the County of Maui that for title insurance purposes properties sold at this Tax Sale are NOT free and clear of all liens. Potential bidders should consult with their own attorneys to determine if liens legally remain on the property after a tax deed is issued. Title Guaranty representatives will be present at the Tax Sale to answer any questions you may have. You may also contact Title Guaranty directly at one of their Maui branches and/or the website at: www.tghawaii.com.

The following information will be required by purchasers to complete the deed:
a. The exact full name and marital status of the grantee;
b. Address of the grantee;
c. The tenancy in which ownership is to be held. The County of Maui will not assist buyers with legal advice such as questions regarding tenancy.

The County will record the deed with the Bureau of Conveyances and/or Land Court within sixty (60) days after the Tax Sale. (HRS §246-60) The recorded deed will be sent directly to the purchaser by the Bureau of Conveyances and/or the Land Court. It may take several months after the Tax Sale to receive the recorded deed. Information regarding recordation can be found on the Bureau of Conveyance’s website at http://hawaii.gov/dlnr/boc or questions may be directed to the Bureau of Conveyances at: (808)587-0134 or (808)587-0138.

All foreign and out-of-state corporations must have complied with state law, HRS, Chapter 414, Part XVI. Foreign Corporations.
Title Guranty Website

10. Do you allow investors to invest at the tax sale without attending the tax sale (i.e. absentee bidding)?

No, we do not allow absentee bidding, however, you may send a representative to bid on your behalf.

11. When does the title pass?

The title to the property passes upon the Tax Sale and recording of the deed. The tax deed will be in your name with a reservation for the redemption period.

12. Will my property be free and clear of all liens?

The County of Maui, Real Property Tax Division (RPT), makes every effort to provide you with a free and clear title, however, it is not able to guarantee that. Therefore, you still purchase the property "as is" and may be required to clear all recorded liens on your own. The County has taken the following steps to help you in this matter:

• The County has ordered title reports and made every effort to put all owners and lienholders on notice of the pending tax foreclosure sale. Copies of the notices and return receipts of those notices are on file with RPT and you may purchase copies if necessary.
• The County published notices in the local and statewide newspapers to provide notice to the public of the pending sale.
• The County will attempt to eliminate all recorded liens (other than Federal) from the title for recording with the Bureau of Conveyance or Land Court. These do not include covenants, grants of easements or other encumbrances that run with the land.

However, it should be clearly noted that the properties are still being sold "as is" and the County will not warrant their title or represent the successful purchaser in any title disputes.

13. Once a property is acquired through the tax sale is there a redemption period?

Delinquent taxpayers (i.e. former property owners) may redeem the property sold by payment to the purchaser at the Tax Sale, within one (1) year of the date of the Tax Sale, or if the tax deed is not recorded within sixty (60) days after the Tax Sale, then within one (1) year from the date of recordation. To redeem the property the delinquent taxpayer must pay to the purchaser the amount paid by the purchaser, together with all costs and expenses which the purchaser was required to pay, including the fee for recording the deed, and interest at the rate of twelve percent (12%) a year. In a case of redemption more than one (1) year after the date of Tax Sale by reason of extension of the redemption period on account of late recording of the tax deed, interest shall not be added for the extended redemption period. The delinquent taxpayer must make arrangements for the redemption of the property directly with the purchaser. The County is not involved in the redemption process. (See, HRS §246-60, MCC §3.48.270)

14. Can I build or sell during the redemption period?

We do not recommend that you build during the redemption period as the prior owner is under no obligation to pay you for any improvements that you make to the property. You may, however, be entitled to collect certain other sums you may have expended to keep the title in good standing, such as real property taxes and maintenance fees. You may sell or transfer the property within the redemption period, but be sure to advise the buyer and include the redemption provision in your deed to avoid problems in your transfer.

15. What happens to surplus money (money collected above the upset price)?

Surplus money is disposed of in accordance with state and county laws. (See HRS §246-63 and MCC §3.48.285). Links to HRS and MCC

16. What happens to any personal property or people living on the property?

Property is sold as is. Potential bidders are responsible for conducting their own due diligence before purchasing property at the Tax Sale. People living on the property receive notice of the Tax Sale. Any action against people remaining on the property after the Tax Sale is the responsibility of the purchaser.

The County of Maui is not involved in any actions to remove persons or personal property before or after the Tax Sale.

17. Does the County warrant the representations made in the field inspection reports?

The field inspections are done by the RPT Division staff and try to provide as accurate a picture as possible about the condition of the property on the date of the inspection. Once again, the County does not warrant any of the information contained in the field inspection regarding the condition of the land or any structures. Misrepresentations in the field inspections or title reports will not be grounds for cancellation of the Tax Sale.

18. What happens to the surplus? Can it pay off the liens?

Any money collected above the upset price is considered surplus money. After the Tax Sale, the County will notify all lienholders that they have a right to make claims against the surplus. When the County pays off the lienholders, the County will seek a satisfaction and release of lien from the lienholder, which the successful purchaser may file with the Bureau of Conveyance or Land Court to help clear the title. Any additional surplus funds can then be claimed by the previous owner.

19. How do I get rid of the liens?

If the County is unable to provide you with releases, you may contact the lienholders on your own and seek releases from them. In many instances, the liens are no longer valid or were previously paid and no one bothered to record a release. Once you receive the release, it should be recorded with the Bureau of Conveyance or Land Court, depending on where your deed is recorded.

20. What about federal tax liens?

Once again, the County sells the property "as is". The federal government has indicated that they will monitor our Tax Sales and where they feel the Tax Sale was inadequate, they may seek to foreclose on the property. Should they seek such action, they would reimburse the purchaser.

21. Is there a charge for the list of current properties on the tax sale?

Yes, the charge is $1.00 per list. The list is also available free on our website or in the newspapers 4 weeks prior to the Tax Sale. Deliquent Tax Accounts web page