GA Supreme Court: tax deed holder's rejection of redemption tender struck down

On November 7, 2016, the Georgia Supreme Court issued an opinion in the matter of Nix v. 230 Kirkwood Homes, LLC. This is the third time Ms. Nix has made her way to the State's highest court on this matter - the prior occasions being against Community Renewal and Redemption, LLC in 2005 and 2011.

In this instance, the Court, in an opinion authored by Justice Melton, made several rulings which will impact non-judicial tax sales for years to come.

As a corollary, the court reversed a 2009 decision by the Court of Appeals in Davis v. Harpagon Co., LLC which had held that, as a jurisdictional issue, a party could not appeal an adverse ruling in a quiet title without first paying any special master's fees assessed against that party in the original quiet title action. Payment of such fees no longer a jurisdictional pre-requisite to a right of an appeal.

Moving onto the merits of the case, the Court noted that the successor-in-interest to the defendant in fifa had made a redemption tender of the tax deed in one of the case's prior visits to the Supreme Court. In that prior case, the Court found that the redemption tender was inadequate as a matter of law and that Ms. Nix was not required to accept the tender. However, this case related to a separate tender.

Ms. Nix had argued that because the Court had struck down the prior tender that the redeemer was estopped from making a renewed tender. The Court disagreed. Rather this ruling has clarified that finding a redemption tender invalid is limited to the facts of that specific tender. Absent Ms. Nix's successful completion of the foreclosure of any and all rights to redeem her tax deed, a party is entitled to make a new tender whose sufficiency shall be judged on its own merits.

Finally, the Court ruled on Ms. Nix's claims that she had acquired title via prescription pursuant to OCGA 48-4-48. Engaging in a traditional adverse possession analysis, the Court noted that Ms. Nix had not submitted sufficient evidence to prove her title had ripened by prescription. While the decision could have ended there, the Court opinion ventures into unexpected territory. Finding that there was a 10 year period where Ms. Nix held the tax sale deed and had also encumbered her interest in the property with a security deed, the Court determined that Ms. Nix, as a holder of an un-barred tax deed, cannot as a matter of law adversely possess property while the security deed encumbered her tax deed interest. In theory, no amount of peaceable, uninterrupted possession will rise to the level of adverse possession if the possessor is only the holder of an un-barred tax deed which is encumbered by a security deed.

- Allie Jett