What is the function of a tax lien certificate?

A tax lien certificate serves the function of conveying a legal claim against a property due to unpaid taxes. When a property owner fails to pay their property taxes, the taxing authority can place a lien on the property for the amount owed. This certificate represents the claim and is typically sold at a tax lien sale. The buyer of the tax lien certificate effectively pays the owed taxes on behalf of the property owner and, in return, has the right to collect that amount, often with accrued interest, and may eventually have the opportunity to foreclose on the property if the owner fails to pay back the owed amount within a certain period.

In contrast, proof of property ownership does not pertain to a tax lien certificate; instead, that would be evidenced through a deed. The transfer of property ownership to a new buyer is accomplished through a deed as well and not through a tax lien certificate, which merely establishes a monetary claim. Documenting the sale of a property is also unrelated to a tax lien certificate, as that involves a contract or deed, not a claim against unpaid taxes.