City and County of Denver, Colorado
Tax Certificate Process
While the following information is deemed to be accurate, it is not meant to be a comprehensive explanation of the laws governing tax lien sales and redemptions in Colorado. It is strongly recommended that the bidder review Colorado Revised Statutes, Title 39, Article 11 (Sale of Tax Liens) and Title 39, Article 12 (Redemptions) prior to participating in a tax lien sale auction.
Public tax lien sales in Colorado are usually held in either November or December each year.
The annual rate of redemption interest shall be nine percentage points above the Federal Reserve Bank discount rate as of September 1st and shall be rounded to the nearest full percent. Therefore, the redemption rate for certificates sold in 2018 will be 12%. One twelfth (1/12) of this rate will accrue each month in interest. In computing the amount of interest due, portions of months shall be counted as whole months.
In the event of an erroneous sale, the annual rate of interest shall be two percentage points above the discount rate, rounded to the nearest full percent but shall be no lower than eight (8%) percent per annum.
Successful bidders at the auction pay the total advertised price (face amount) plus any premium bid. The face amount consists of the delinquent tax, interest, an advertising fee, a $4.00 certificate fee and an Internet auction fee.
The person paying the highest amount at the sale is issued a Certificate of Purchase. This is a negotiable document representing a lien on the property and it is valid for 15 years. Interest is earned at the rate stated on the certificate with portions of calendar months considered as whole months. Premiums do not earn interest.
After the sale, a buyer list will be provided to successful bidders. This list will include the certificate numbers, parcel numbers and total amount paid for each item. It is the buyer’s responsibility to keep records of their certificates purchased.
The redemption amount paid to the certificate buyer will be the certificate face amount (tax, interest, advertising, and fees), plus interest earned through the date of redemption. The buyer does not recover the premium paid over the face amount.
Certificate holders may, after August 1st, pay the subsequent year’s unpaid taxes. This amount will be endorsed onto the existing certificate and will earn the same rate of interest.
Upon redemption, assuming the tax lien certificate is being held by the county, a check will be mailed automatically. It is the buyer’s responsibility to notify the City and County of Denver - Treasury Division of mailing address changes to ensure redemption checks are mailed properly.
After three years from the date of the public auction, if the certificate has not been redeemed, the buyer can apply for a Treasurer’s Deed to the property. To make application, the investor will need to contact the City and County of Denver - Treasury Division, complete an application form and deposit expense money for processing the application. After a title search, advertising, and notifications to all interested parties, a Treasurer’s Tax Deed is issued if there has been no redemption.
Public tax lien auctions and redemptions are governed by Colorado Revised Statutes, Title 39, Articles 11, and 12 and are administered by the Treasurer’s office in each county. Any questions should be referred to the City and County of Denver - Treasury Division office at (720) 913-9500.
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