Why a tax deed may not be the end of it

The court's analysis runs through Ala. Code 1975, § 40-10-82, the short statute of limitations on tax-title actions, as construed in Reese v. Robinson, 523 So. 2d 398, 400 (Ala. 1988). The court quoted Reese, which explains that § 40-10-82

“has been held to bar an action by the tax purchaser to recover property sold for the payment of taxes, unless the tax purchaser brought the action within three years from the date he was entitled to demand a tax deed. … Also, if the taxpayer/landowner has remained in possession of the property for three years after the date when the tax purchaser became entitled to demand a tax deed, this statute would vest title in the taxpayer/landowner …”

Stated the other way round, as the court then put it: “when the holder of a tax deed is not in possession of the property and has failed to file an ejectment action during the three years following the date that he or she was entitled to demand a tax deed, title to the property reverts to the tax debtor.”

Possession is the hinge, and vacant land supplies the answer. Quoting Rioprop Holdings, LLC v. Compass Bank, 256 So. 3d 674, 679 (Ala. Civ. App. 2018): “where there is no real occupancy of the land, constructive possession follows the title of the original owner and can only be cut off by adverse possession of the tax purchaser.”

Applied to the dates: Lynn had until May 11, 2018 to commence an action to quiet title, and the record contained no evidence he did. Steele had until May 15, 2023, and the record contained no evidence she did or ever took possession. On that record the owners “failed to establish that no genuine issue of material fact existed regarding whether they remained the owners of Lot 200 such that they were required to remit the 2024 assessment.” Summary judgment reversed; remanded.

What it changes for boards and managers

The practical rule this decision states is narrow but useful, and it cuts against an assumption that is common in collections files: a tax sale on the county's records does not automatically remove a lot from the assessment roll. Where the tax purchaser never took possession and let the three-year window pass, title may have reverted to the original owner, who remains an “owner” under a declaration defined by record title.

Three things follow for an association carrying delinquent lots that have been through a tax sale.

Look for possession and for a quiet-title action, not just for a deed. The tax deed is the beginning of the enquiry. What matters is whether the purchaser occupied the parcel or sued within three years of being entitled to demand the deed. On unoccupied subdivision lots, neither is common.

Read the declaration's definition of “owner” closely. The court flagged in a footnote that the association “did not argue that the term ‘owner’ included both ‘any contract buyer’ and ‘the record owner,’ regardless of whether those persons were one and the same” — an argument left on the table. Definitions of this kind often carry more than one route to liability.

Watch the procedural trap in the footnotes. The day after losing on summary judgment, the association filed an amended complaint adding the two tax-deed holders and seeking a declaration of ownership. The court held it a nullity: because the trial court never set aside the May 29, 2025 judgment, it “lacked jurisdiction to accept the amended complaint.” If new parties are needed, the judgment has to be vacated first.

The other side of the same statute

Alabama's tax-title provisions cut both ways for associations, and 2026 produced an example of each. Three months before Stoney Point, in F Family South, LLC v. Property Owners Association of Ono Island, No. CL-2025-1091 (Ala. Civ. App. Mar. 20, 2026), the same court held that the 20-year rule of repose barred a property owners association's attempt to redeem a parcel sold at a 1995 tax sale — notwithstanding the rule that an owner in possession faces no time limit.

An association pursuing a delinquent owner benefits from a tax purchaser's inaction. An association trying to recover a parcel for itself finds that inaction runs against it too.

What to watch next

The case returns to Winston Circuit Court, where the factual question the appellate court identified — whether either tax purchaser ever took possession or acted within the three-year window — is still open. Nothing in the opinion holds that the owners do owe the 2024 assessment; it holds only that they did not prove they do not.

The slip opinion carries the standard notice that it is “subject to formal revision before publication in the advance sheets of Southern Reporter.”