Hawaii County Tax Auction FAQ

• When are the county tax auctions?  
• They occur twice a year, usually in January and June.
• How do I find out about the auction? 
• The county will post the notice in the Hawaii Tribune Herald and it is also posted on the County Tax Sale website.  (Where it says "No List Available."  This will change to the list 4 weeks prior to the auction.)  
• What types of property are auctioned?  
• Typically banks will make sure that property taxes are paid so for the most part, only properties with no current mortgages are auctioned.  This means mostly raw land.  While there are usually a handful of houses on the list, probably 99% are raw land parcels.  
• Can you see the properties? 
• The county does not hold open houses, so driving by is the best you are legally able to do. 
• I have the list.  Now what?  
• Sadly, the county list isn't much help.  The list that is generated gives you the Tax Map Key (TMK), but not the address.  (Many of the properties don't have an address.)  If you want to drive by, you can look up the TMK on the county website, and click on "view map".  This is a long tedious process.  Hopefully the county improves it before the next tax auction.  
• The list changed?  How come? 
• Owners have until the morning of the tax sale to pay up their past due taxes.  As they pay them off, the properties are removed from the list.  Check for an updated list every few days.  
• How do I know if there are issues with the title? 
• The County of Hawaii provides a "Litigation Guarantee" (very similar to a preliminary title report) with each parcel.  These are available for review prior to the auction in the folder on the website.  They are also provided the day of the auction, each taped to long tables that everyone shuffles through before the bidding starts.  
• Will I receive title insurance?  No, all you receive at auction is a receipt and a copy of the litigation guarantee.  A recorded deed will come later.  
• What do I need to bring to the auction? 
• Cash or a cashier's check made out to yourself.  You must pay in full immediately after bidding. 
• Copy of your trust documents if you will hold title in a trust (can be emailed in as well after bidding.)  
• How does it work? 
• The auction usually starts at 9am.  Someone from the tax office gets up and reads off a long disclaimer, then a county attorney reads a disclaimer and takes Q & A, and then, after everyone has been waiting for about half an hour, excited to get started, they take a break before starting!  
• Once the auction starts, the minimum bid is the "upset price" that is noted on the list (taxes + fees).  You must stand to bid and call out your bid when the auctioneer motions to you.  Bidding proceeds back and forth until there is a winner.  A county employee comes from the front with the bid paperwork and a sticker numbered with the same number that was on the tax sale list.  You put this number on your arm and proceed through the payment and purchase process in the back of the room, moving along from station to station.  Bidding continues and you ARE able to bid on additional properties from the payment line.  If you brought a cashier's check made out to yourself, you will sign it over to the county.  If there is a balance, they will offer to hold it as a credit for you for future bids, or they will write you a check for the balance.  You can close out your credit at any time.  
• What do I get to show I won? 
• At the auction you only receive a receipt and the litigation guarantee.  A deed will follow, but they take a while.  Usually 4 to 6 months.  
• When do I own it? 
• You officially own the property immediately.  However: 
• Without the deed it is challenging to prove ownership, so if you need to evict someone from the property you will likely have to wait for the deed to be generated and recorded. 
• The prior owner has a one-year right of redemption to purchase the property back from you. 
• Will there be liens? 
• Very often there are road maintenance liens owed.  If the bidding proceeds over the upset price, any overage the county receives goes towards paying off as many liens on the property as possible.  If there is still an overage after all liens are paid, the prior owner may claim it.    
• Tax foreclosures are *supposed* to wipe out any junior liens, but consult with an attorney since this is not the same process as a judicial foreclosure.  
• Will I be able to get title insurance? 
• You may have heard that properties that have gone through a county tax auction cannot get title insurance.  This is true in a lot of cases, but not all.  As part of the tax foreclosure process, the county notifies the prior owner via certified mail and publication.  This is all the law requires.  However, title companies have decided they will not insure properties where the prior owner did not sign for the certified mail.  (And they may even decline to insure properties when the prior owner did sign if there are other issues.)  Do not count on being able to get title insurance, but don't rule it out without obtaining the mailing packet from the county and running it by your favorite escrow officer for review.
• I decided I don't want this property.  How do I undo the sale? 
• Unfortunately this is not possible.  The best you can hope for is that the prior owner wants to buy it back during the redemption period.  Or you can wait a year and then list it with your favorite Realtor.  
• The prior owner wants to buy the property back. 
• Do I have to let him/her buy it back? 
• Yes. 
• I already improved the property.  Can I charge him/her for the improvements I made? 
• Nope, shouldn't have invested in the property before the right of redemption was over. 
• Can I charge them more than I paid? 
• Yes, they must pay you back the full amount you paid plus 1% per month plus they have to cover all escrow fees, deed drafting fees, recording fees, notary fees, etc.