Colorado Title Insurance for Tax Lien Certificates
- Jerad Larkin
- 1 hour ago
- 7 min read
What Investors Should Know About Title Risks When Buying Colorado Tax Liens
Colorado’s real estate investment market offers several creative ways to build wealth, and one of the most popular - yet misunderstood - opportunities is investing in tax lien certificates. Each year, Colorado counties auction off tax liens on properties where owners have failed to pay property taxes. For investors, these liens can offer attractive returns through interest income or the chance to eventually obtain ownership through a tax deed.
However, purchasing tax liens or tax deeds comes with significant title risks. Many properties sold through tax auctions have clouded titles, unreleased liens, or ownership disputes that can make resale or redevelopment challenging.
That’s where title insurance becomes essential - not during the lien purchase itself, but when investors acquire ownership through a tax deed and want to protect their interest. With Jerad Larkin and Chicago Title Colorado, investors gain the expertise and due diligence support needed to convert risky tax lien acquisitions into clean, insurable real estate investments.
Understanding Tax Lien Certificates in Colorado
In Colorado, when property owners fail to pay their property taxes, the county places a tax lien on the property. The lien is then sold to investors through the county treasurer’s annual tax lien sale.
How It Works:
The investor purchases the tax lien certificate from the county.
The investor pays the outstanding taxes on behalf of the property owner.
The owner has a redemption period (typically 3 years) to repay the taxes plus interest.
If the taxes remain unpaid, the investor can apply for a treasurer’s deed - effectively taking ownership of the property.
While this sounds like a smart investment strategy, it’s important to understand that a tax lien or deed does not guarantee clean ownership.
Why Title Insurance Matters After a Tax Deed
When investors acquire property through a tax deed, the ownership obtained is not equivalent to a traditional warranty or quitclaim deed. The county transfers whatever interest it has - which may still be subject to prior liens, ownership claims, or unrecorded encumbrances.
Title insurance protects investors by:
Verifying ownership history and chain of title.
Identifying prior mortgages, judgments, or easements.
Clearing recorded liens or encumbrances before resale or refinancing.
Protecting against ownership disputes from prior owners or heirs.
Ensuring clean, marketable title for future buyers or lenders.
Without title insurance, investors may own property in name only, unable to sell, refinance, or develop it due to title defects.
Common Title Issues with Tax Lien and Tax Deed Properties
Title Issue | Risk to Investor | How Chicago Title Colorado Protects You |
Old mortgages or unreleased liens | Prevents resale or lender financing | Confirms and clears prior encumbrances |
Ownership claims by heirs | Leads to potential litigation | Verifies chain of title and prior notices |
HOA assessments or mechanic’s liens | Creates surprise financial obligations | Discloses unpaid assessments or liens |
Unrecorded easements or access issues | Restricts property use or development | Confirms legal access via ALTA 17 endorsement |
Procedural errors in tax sale | Can invalidate ownership | Confirms compliance with statutory requirements |
These risks can transform a profitable investment into a legal or financial headache if not properly addressed.
Example: Tax Deed Property in El Paso County
An investor acquired a tax deed on a vacant lot in El Paso County after the redemption period expired. When they attempted to sell, the buyer’s title search revealed a recorded deed of trust that had never been released - even though the loan had been satisfied years earlier. Chicago Title Colorado, led by Jerad Larkin, worked with the investor to contact the original lender’s successor institution and obtain a recorded release of deed of trust. Once cleared, Chicago Title issued an Owner’s Policy, enabling a clean resale and profitable exit for the investor.
The Role of Chicago Title Colorado in Tax Deed Transactions
While title insurance is not issued on tax lien certificates themselves, it becomes crucial once an investor takes ownership through a treasurer’s deed.
Jerad Larkin and Chicago Title Colorado specialize in helping investors:
1. Perform Pre-Deed Due Diligence
Before applying for a treasurer’s deed, Chicago Title reviews the property’s history to identify potential liens or encumbrances that may survive the tax sale.
2. Conduct Ownership and Lien Searches
Jerad’s team provides detailed Ownership & Encumbrance (O&E) reports - revealing mortgages, judgments, HOA liens, and other recorded interests.
3. Coordinate Legal Quiet Title Actions
In many cases, properties acquired through tax deeds require a quiet title action to clear prior ownership claims. Chicago Title works closely with attorneys to issue title policies post-judgment.
4. Issue Title Policies Post-Clearance
Once ownership is confirmed and all risks are mitigated, Chicago Title issues Owner’s or Lender’s Policies - providing long-term protection and marketable title.
5. Manage Closings and Escrow for Resales
When it’s time to sell or refinance, Jerad’s team handles escrow, fund disbursement, and title documentation to ensure a smooth, compliant transaction.
Example: Quiet Title Action in Adams County
A tax lien investor in Adams County obtained a treasurer’s deed for a small residential property. The title search revealed two old judgment liens recorded against the prior owner. Jerad’s team helped the investor connect with a qualified real estate attorney to complete a quiet title action, removing all prior claims.
After judgment, Chicago Title Colorado issued an Owner’s Policy with ALTA 9 and ALTA 17 endorsements - allowing the investor to refinance and begin building on the lot.
ALTA Endorsements for Tax Deed Properties
Endorsement Type | Purpose |
ALTA 3 (Zoning) | Confirms property use compliance. |
ALTA 9 (Restrictions, Encroachments, Minerals) | Protects against prior violations or encroachments. |
ALTA 17 (Access) | Ensures permanent legal access to the property. |
ALTA 25 (Same as Survey) | Verifies boundaries and legal descriptions. |
ALTA 34 (Identified Exception Coverage) | Addresses exceptions specific to prior liens or judgments. |
These endorsements provide extra protection for properties with long ownership histories or incomplete public records - common among tax deed acquisitions.
Example: Vacant Land Tax Deed in Pueblo County
A Denver investor acquired a parcel at a Pueblo County tax sale for $12,000. When applying for title insurance, the search revealed an unrecorded utility easement and a county improvement lien from years prior.
Chicago Title Colorado helped resolve both issues: the utility company recorded a proper easement, and the investor paid the remaining assessment.
The investor received full title coverage and resold the parcel to a builder within 90 days - turning a risky tax deed purchase into a profitable flip.
Quiet Title: The Key to Marketable Ownership
Most tax deed properties require a quiet title action before they can be insured. This legal process confirms that the investor’s ownership is valid and extinguishes any remaining claims from previous owners or lienholders.
Chicago Title Colorado’s role:
Provides O&E reports to support the quiet title filing.
Works with attorneys to verify notice compliance under C.R.S. § 39-11-120.
Issues title policies upon entry of the final court decree.
Once complete, investors can confidently sell or refinance with clean, marketable title.
Example: Urban Lot Redevelopment in Denver County
A Colorado investor acquired a treasurer’s deed for an infill lot in Denver’s Five Points neighborhood. Title review revealed a city redevelopment covenant recorded decades earlier, restricting commercial use.
Jerad’s team collaborated with Denver’s planning department to record a covenant release, clearing the title.
Chicago Title Colorado issued an Owner’s Policy with ALTA 26 (Subdivision) coverage - enabling the investor to proceed with residential redevelopment financing.
Risks That Survive a Tax Sale
Investors often assume that a tax sale “wipes out” all prior liens, but several encumbrances typically survive, including:
Federal tax liens.
Municipal liens (for utilities, demolition, or code enforcement).
HOA liens under Colorado Common Interest Ownership Act (CCIOA).
Easements or rights-of-way.
Mineral and oil/gas rights.
Chicago Title Colorado reviews and discloses these surviving interests so investors can make informed decisions before investing more capital.
Example: HOA Lien Dispute in Douglas County
A tax deed investor purchased a foreclosed townhome at auction. During title review, Chicago Title Colorado found that the HOA had recorded a continuing assessment lien that survived the tax sale.
Jerad’s team negotiated directly with the HOA to release the lien in exchange for payment of back dues, clearing the way for resale.
The investor received a clean Owner’s Title Policy and closed the sale within 45 days.
Why Investors Choose Title Insurance After a Tax Deed
Even seasoned investors sometimes overlook the importance of post-deed title insurance. But without it, a property’s value can be severely limited - lenders won’t finance, and buyers won’t close.
With title insurance from Chicago Title Colorado, investors get:
Verified, insurable ownership after quiet title.
Full protection against hidden defects and future claims.
Support through every stage of the cleanup and resale process.
Nationwide underwriter strength from Fidelity National Financial.
Jerad and his team make sure your hard-earned tax lien investment becomes a truly marketable asset.
The Benefits of Working with Chicago Title Colorado
Tax lien and tax deed properties are complex, but with the right title partner, they can be a powerful part of your real estate strategy.
Jerad Larkin and Chicago Title Colorado combine expertise, precision, and local knowledge to help investors succeed in Colorado’s competitive tax lien market.
Why Investors Trust Jerad:
Expertise in post-tax-deed title clearance and insurance.
Fast, accurate Ownership & Encumbrance reports.
Seamless coordination with attorneys and county offices.
Proven experience with investors and private lenders.
Backed by Fidelity National Financial, the largest title insurer in the U.S.
From tax lien to resale, Chicago Title Colorado ensures your investment is clean, compliant, and ready for the market.
Key Takeaways
Tax lien certificates can yield strong returns but carry high title risks.
Title insurance is essential once investors acquire property via a treasurer’s deed.
Chicago Title Colorado helps investors verify ownership, clear liens, and issue marketable title policies.
With Jerad Larkin, your tax lien investment becomes a protected, profitable real estate asset.
Questions? Contact
Jerad Larkin at Chicago Title Colorado
📞 303.630.9430
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