Colorado § 39-12-103 - Redemption made - interest.

§ 39-12-103. Redemption made - interest.

(1) Real property for which a tax lien was sold under the provisions of article 11 of this title as a result of delinquent taxes may be redeemed by the owner thereof or his agent, assignee, or attorney, or by any person having a legal or equitable claim therein, or by a holder of a tax sale certificate; except that such holder may redeem such real property from any sale of a tax lien thereof made subsequent to the time of the issuance of the tax sale certificate upon which he is relying, and the amount paid for the redemption of the subsequent certificate of purchase shall be endorsed as subsequent taxes paid on the certificate upon which he is relying.

(2) An undivided interest may be redeemed upon payment of a ratable share of the sum required to redeem the whole even though a tax lien for the whole has been sold. In case a tax lien on any tract of land sold for delinquent taxes under the provisions of article 11 of this title belongs to two or more separate and distinct parties in severalty, the treasurer, when satisfied of the fact and upon application of any one of the parties or his agent, assignee, or attorney and upon payment of the proper proportional amount, shall issue a certificate of redemption for such party's interest in said land.

(3) The redemption may be made at any time before the execution of a treasurer's deed to the purchaser or his heirs or assigns upon payment to the treasurer, to be held by him subject to the order of the purchaser, of the amount of taxes, delinquent interest, and costs for which the tax lien on the property was sold, with redemption interest thereon from the date of sale at the rate which is determined as provided in this subsection (3), together with the amount of all taxes accruing on such real property after the sale, paid by the purchaser and endorsed on his certificate of purchase, with redemption interest at the rate which is determined as provided in this subsection (3) on such taxes so endorsed on the certificate of purchase. Any payment under this section shall be deemed received by the treasurer on the date that it is actually received in the treasurer's office. The annual rate of redemption interest shall be nine percentage points above the discount rate, which discount rate shall be the rate of interest a commercial bank pays to the federal reserve bank of Kansas City using a government bond or other eligible paper as security, and shall be rounded to the nearest full percent. The commissioner of banking shall establish the annual rate of redemption interest based upon the computation specified immediately above. Such annual rate of redemption interest shall be so established as of September 1, 1981, to become effective October 1, 1981. Thereafter, on September 1 of each year, the annual rate of redemption interest shall be established in the same manner, to become effective on October 1 of the same year.

(4) If subsequent taxes are paid before the time when they would become delinquent, interest shall be computed only from the time of their delinquency. Such taxes shall bear interest at the annual rate set forth in subsection (3) of this section, and no more, from the time when the purchaser becomes entitled to a deed up to the time of issuance of such deed.

(5) All statutory fees paid by the purchaser in connection with such certificate shall bear the same rate of interest as the original amount for which the tax lien on the property was sold, the same to be prorated among the several tracts described in said certificates.

(6) In computing the amount of interest due, portions of months shall be counted as whole months.

Source: L. 64: R&RE, p. 744, § 1. C.R.S. 1963: § 137-12-3. L. 69: p. 1126, § 2. L. 71: p. 330, § 12. L. 79: (3) amended, p. 1421, § 3, effective January 1, 1980. L. 81: (3) amended, p. 1861, § 1, effective September 1. L. 85: (1) to (5) amended, p. 1247, § 34, effective July 1. L. 89: (4) amended, p. 1467, § 34, effective June 7. L. 92: (3) amended, p. 2233, § 24, effective April 9.

ANNOTATION

Law reviews. For article, "Delinquent Oil and Gas Ad Valorem Taxes: Protecting Property Interests", see 16 Colo. Law. 798 (1987). For article, "Keeping the Surplus? Examining Colorado's Real Property Tax Lien System in Light of Tyler v. Hennepin County", see 53 Colo. Law. 28 (Jan.-Feb. 2024).

Annotator's note. The following annotations include cases decided under former provisions similar to this section.

The policy underlying the right of redemption is the general policy of the law that no man shall forfeit his estate because of his inability to meet engagements on the day prescribed by law for their payment. Because the law favors redemption, redemption statutes are construed liberally to afford property owners ample opportunity to redeem. Dove Valley Bus. Park v. County Comm'rs, 945 P.2d 395 (Colo. 1997).

In Colorado, delinquent taxpayers have no constitutional right to redemption. Instead, redemption is a statutory privilege created by the general assembly, which may be exercised only as provided by statute. Dove Valley Bus. Park v. County Comm'rs, 945 P.2d 395 (Colo. 1997).

Section is to be liberally construed in favor of the redemptioner. Bean v. Westwood, 101 Colo. 288, 73 P.2d 386 (1937).

Attempted redemption by person having no interest in the property is ineffectual and may be set aside by the holder of a valid certificate of purchase obtained at a tax sale. Saunders v. Bankston, 31 Colo. App. 551, 506 P.2d 1253 (1972).

One having lease and option to purchase may redeem. One having a lease and an option to purchase land, having exercised his option and received a deed from the reputed owner, thereby acquires an equitable claim to the property under which he has the right to redeem it from a tax sale. Bean v. Westwood, 101 Colo. 288, 73 P.2d 386 (1937).

Assignee with security interest in property entitled to redeem. An assignee of a note, which note carries with it a security interest in real property, has a right to redeem and has an interest in the property. Swofford v. Colo. Nat'l Bank, 628 P.2d 184 (Colo. App. 1981).

One with a lien interest in land may redeem from tax sale. Miller v. First Nat'l Bank, 164 Colo. 449, 435 P.2d 899 (1968).

Lienor's acquisition of title cannot cut off other lienor. Equity will not permit one lienor to acquire a tax title while cutting off other lienor but will treat his purchase of the tax title as a payment of the taxes by a redemption, thereby giving him a preferred lien to the extent paid out to redeem. Miller v. First Nat'l Bank, 164 Colo. 449, 435 P.2d 899 (1968).

Amount payable on redemption not purchase price, but amount of tax involved. Where, at a tax sale, a certificate of purchase is issued to the county which thereafter is sold for a price fixed by a resolution of the board of county commissioners, the amount payable on redemption is not the sum paid by the purchaser as established by the board but the amount of the tax involved, which sums may be very different. Tarabino Real Estate Co. v. Dunlavy, 105 Colo. 523, 99 P.2d 926 (1940).

Redemption interest is a statutorily determined penalty exacted from the taxpayer for the privilege of redemption. Dove Valley Bus. Park v. County Comm'rs, 945 P.2d 395 (Colo. 1997).

The plain language of subsection (3), which explicitly warns a taxpayer that redemption interest will accrue based on the amount of taxes paid by the purchaser, did not provide the taxpayers with any basis to conclude that if they failed to pay their property taxes in a timely manner, and later redeemed their property, that the redemption interest on the amount paid by the purchaser would not apply to them. Dove Valley Bus. Park v. County Comm'rs, 945 P.2d 395 (Colo. 1997).

Colorado scheme does not guarantee predeprivation relief; however, due process requirements were met since the taxpayers received their "full refund" - the over assessed tax plus refund interest - even though redemption interest, which due process does not extend to, was not refunded. Dove Valley Bus. Park v. County Comm'rs, 945 P.2d 395 (Colo. 1997).

County was not unjustly enriched by the payment of redemption interest calculated on the basis of an assessment determined to be excessive at a date after the county conducted the tax lien sale. Dove Valley Bus. Park v. County Comm'rs, 945 P.2d 395 (Colo. 1997).

County treasurer acts in a quasi-judicial capacity in matters concerning redemption of property from tax sales. Johnson v. Dunkel, 132 Colo. 383, 288 P.2d 343 (1955).

Treasurer receives redemption money as agent of purchaser. Subsection (3) provides that the redemption money may be paid to the treasurer, but that officer holds it subject to the order of the purchaser; therefore, he receives it not as the agent of the state or county but as the agent of the purchaser. Statton v. People ex rel. Burr, 18 Colo. App. 85, 70 P. 157 (1902).

No mandamus to release land except upon payment of entire sale amount. Where land covered by a deed on trust is sold for taxes, part of which were assessed against the land and part of which were assessed as the personal tax of the owner, in a proper proceeding, the beneficiary of the trust deed is entitled to a release as to his interest in the land from the tax sale by payment only of the amount properly chargeable against the land, but mandamus will not lie against the county treasurer to compel him to release the land from the tax sale except upon payment of the entire amount for which it was sold, with interest and penalties. The proper remedy would be a proceeding in equity against the holder of the certificate of purchase. Statton v. People ex rel. Burr, 18 Colo. App. 85, 70 P. 157 (1902).

Action to set aside voidable tax deed not within section. In an action to set aside a voidable tax deed, interest on taxes paid on the land by the holder on the deed is not computed according to this section, but according to § 39-12-101. Phillips v. City & County of Denver, 115 Colo. 532, 175 P.2d 805 (1946).

Owner of severed mineral rights underlying property may not redeem. Although both common law and the deed in question gave the owner of severed mineral interests the right to use a reasonable amount of the surface estate for mineral development, such right was not a "legal or equitable claim" within the meaning of subsection (1). To hold otherwise would allow the mineral owner to augment his ownership, which is not a right recognized as part of the redemption process. Notch Mtn. Corp. v. Elliott, 898 P.2d 550 (Colo. 1995).

The right to bring an equitable action cannot be considered synonymous with an equitable claim in the property. Notch Mtn. Corp. v. Elliott, 898 P.2d 550 (Colo. 1995).

Redemption does not transfer title to the redemptioner, but rather prevents a transfer of title by tax deed. Notch Mtn. Corp. v. Elliott, 898 P.2d 550 (Colo. 1995).

Title to a severed mineral interest is not conveyed under a tax deed issued for delinquent taxes levied against the surface estate. Notch Mtn. Corp. v. Elliott, 898 P.2d 550 (Colo. 1995).

Limited partner does not have a right to redeem real property owned by the limited partnership because limited partner has no legal or equitable interest in the real property. Winter Park Devil's Thumb Inv. Co. v. BMS P'ship, 926 P.2d 1253 (Colo. 1996).

Right of redemption distinguished from right of co-owner to pay delinquent taxes. Unlike the right of an interest holder to redeem, the right granted to certain co-owners to pay delinquent taxes under § 38-41-110 does not result in issuance of a redemption certificate or acquisition of an interest in the delinquent co-owner's estate. Rather, the paying co-owner is granted the right to foreclose the lien for unpaid taxes. Notch Mtn. Corp. v. Elliott, 898 P.2d 550 (Colo. 1995).

Applied in Harrison v. City & County of Denver, 102 Colo. 98, 76 P.2d 1110 (1938); French v. Golston, 105 Colo. 578, 100 P.2d 581 (1940); Eshe v. Clough, 116 Colo. 266, 179 P.2d 979 (1947); Boyle v. Culp, 159 Colo. 423, 412 P.2d 543 (1966).