How Colorado Title Insurance Protects Buyers at Tax Deed Sales
- Jerad Larkin
- 13 hours ago
- 5 min read
Buying property through a tax deed sale can seem like an incredible opportunity - properties selling for a fraction of market value, often in desirable areas of Denver, Colorado Springs, and the Front Range. But behind every auction deal, there’s a catch: ownership risks, hidden liens, and title defects that can make it difficult (or impossible) to sell or refinance later.
That’s why Colorado title insurance for tax deed sales is one of the most important (and misunderstood) safeguards for investors and buyers alike.
In this blog, we’ll explore how title insurance protects you when buying tax deed properties, the risks you need to know about Colorado’s tax sale system, and why working with Jerad Larkin and Chicago Title Colorado ensures your investment is legally sound and financially protected.
What Is a Tax Deed Sale in Colorado?
When property owners in Colorado fail to pay their property taxes, the county can eventually auction the property to recover the unpaid taxes.
There are two types of tax-related property sales in Colorado:
Tax Lien Sales – Investors buy a certificate for the unpaid taxes and later can apply for a deed if the owner doesn’t redeem it.
Tax Deed Sales – After redemption periods expire, the property is sold outright to a new owner - usually at public auction.
At a tax deed sale, you’re not buying from the homeowner - you’re buying from the county. While this may sound simple, the property’s title history can be far from clean.
The Title Risks of Buying at a Tax Deed Sale
Unlike traditional real estate transactions, tax deed properties rarely come with title insurance upfront. The county doesn’t guarantee that the title is free of liens, encumbrances, or ownership disputes.
Common Title Problems Include:
Unreleased mortgages or deeds of trust that weren’t wiped out during foreclosure.
IRS liens that may still attach to the property.
Judgment liens or HOA assessments that weren’t properly notified.
Heirs or prior owners who claim the sale was improper.
Clerical errors in tax sale documentation or legal descriptions.
These issues can take months (or years) to resolve - unless you work with a title company experienced in tax deed transactions.
Can You Get Title Insurance After a Tax Deed Sale?
Yes - but not immediately. Most title companies, including Chicago Title Colorado, require the buyer to “quiet title” the property first before issuing an insurance policy.
What Is a Quiet Title Action?
A quiet title lawsuit is a legal process that clears any lingering ownership or lien claims on the property. It ensures the buyer’s ownership is legally recognized and uncontested. Once the court grants a judgment, the title company can issue a Colorado title insurance policy protecting the new owner from future claims.
How Title Insurance Works for Tax Deed Properties
Once the quiet title process is complete, the title company issues two possible types of policies:
1. Owner’s Title Insurance Policy
Covers you, the buyer, against any past ownership disputes, liens, or defects.
2. Lender’s Title Insurance Policy
If you refinance or take out a loan later, your lender will require a separate policy to ensure the mortgage is secured by clean title.
Both types of coverage provide peace of mind that no one can legally challenge your right to own or sell the property later.
Steps to Secure Title Insurance After a Colorado Tax Deed Purchase
Obtain the Tax Deed from the County
The county treasurer issues this deed once the sale is finalized.
Hire a Title Company Early
Chicago Title Colorado can perform a preliminary title search to identify potential issues before you begin the quiet title process.
Initiate a Quiet Title Action
Work with a real estate attorney to petition the court to confirm ownership.
Resolve Any Known Title Defects
This might involve clearing old liens or obtaining affidavits from prior owners or lienholders.
Receive Your Title Insurance Policy
Once cleared, you can finally obtain a title insurance policy to protect your ownership for as long as you own the property.
Why Investors Should Never Skip Title Insurance
Many real estate investors try to save money by skipping title insurance after tax deed purchases. Unfortunately, that decision can cost far more later.
Here’s Why It’s a Must-Have:
You can’t easily resell or refinance without clear title.
Buyers will demand a title insurance policy before closing.
Title insurance protects against unknown liens or prior claims.
You’ll need it for lender financing if you hold the property long term.
In short: if you ever plan to sell, refinance, or leverage your property - title insurance isn’t optional.
Colorado-Specific Tax Sale Considerations
Every state handles tax sales differently. Here’s what makes Colorado’s system unique:
The redemption period (for owners to pay taxes and reclaim property) can last up to three years for tax lien sales.
Counties use public auctions or online bidding to sell tax deeds.
Buyers receive the property “as-is” - no inspections or warranties.
Certain liens, like municipal assessments or IRS liens, may survive the sale.
That’s why working with a Denver title company like Chicago Title Colorado is essential to verify what remains attached to the property before you invest.
Title Insurance and Escrow Services for Tax Deed Purchases
Even in tax deed transactions, escrow services protect your funds during closing. Chicago Title Colorado provides escrow services in Denver and across the Front Range to handle deposits, disbursements, and recording.
Escrow ensures:
Proper fund handling between buyer and county.
Secure distribution of auction proceeds.
Prompt recording of the new deed.
Having escrow managed professionally also ensures your new title documents are recorded correctly - avoiding clerical errors that could delay your quiet title action later.
The Role of Chicago Title Colorado in Tax Deed Transactions
Chicago Title Colorado, led by Jerad Larkin, specializes in helping investors, agents, and homeowners navigate complex title situations - including tax deed and foreclosure properties.
The team provides:
Preliminary title searches before auction purchases.
Guidance on quiet title processes with local attorneys.
Curative title work to clear liens and encumbrances.
Owner and lender title insurance issuance after clearance.
Escrow and recording services across all Colorado counties.
Whether you’re bidding in Denver County, El Paso County, or Larimer County, Jerad and his team help ensure your tax deed investment is secure and insurable.
Title Insurance Cost in Colorado for Tax Deed Properties
The title insurance cost in Colorado depends on the property’s value and the complexity of the curative work required. Premiums are one-time fees, typically including:
Title search and examination
Quiet title review
Policy issuance and recording
Because tax deed properties often require additional research, costs can vary. Jerad Larkin’s team provides transparent estimates and timelines upfront, so investors know exactly what to expect.
Colorado Real Estate Tools for Tax Sale Investors
For buyers and agents tracking tax deed opportunities, Jerad Larkin offers powerful Colorado real estate tools to gain an edge:
Title Toolbox – Analyze ownership data, liens, and equity trends across counties.
Revaluate – Identify properties at risk of becoming distressed or tax delinquent.
Boomerang Direct Mail – Market to property owners, heirs, or neighboring investors after purchases.
AI Tools for Real Estate Agents – Automate research, outreach, and lead generation tied to tax sale markets.
These tools help investors locate, evaluate, and manage tax deed properties with greater confidence and efficiency.
Final Thoughts: Protect Your Tax Sale Investment
Buying a property through a Colorado tax deed sale can be highly rewarding - but only if you protect your ownership properly. Without title insurance, your “bargain” purchase could come with unpaid debts or ownership challenges that cost thousands to fix later. By working with Jerad Larkin and Chicago Title Colorado, you get expert guidance from a trusted Denver title company that understands Colorado’s complex tax sale laws and ensures your title is clean, recorded, and protected.
Questions? Contact:
Jerad Larkin at Chicago Title Colorado
📞 303.630.9430
Or subscribe at MileHighTitleGuy.com for tools, resources, and exclusive real estate event invites.
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