What does a tax certificate entitle its holder to do?

A tax certificate serves as documentation indicating that a person or entity has purchased a tax lien on a property due to unpaid property taxes. The primary purpose of holding a tax certificate is to secure the right to apply for a tax deed after a specified redemption period has elapsed. This period allows the original property owner an opportunity to pay off their debt—including any interest and penalties—to reclaim their property.

By holding the tax certificate, the holder can eventually take ownership of the property if the outstanding taxes remain unpaid. This process is governed by specific state laws that dictate the timeframe and procedures for obtaining the deed, thereby making it essential for the holder to be aware of these regulations to enforce their rights effectively.

The other options do not accurately reflect the purpose of a tax certificate. Ownership transfer, tax exemption claims, and initiation of rental agreements are not functions or rights conferred by simply holding a tax certificate. Instead, these actions might require separate legal processes or documentation, thereby distinguishing the specific role that a tax certificate plays in property and tax law.