County eyes cash from foreclosures; $1 million in unpaid taxes on the line
Published 12:00 am Wednesday, December 2, 2009
By Jessie Burchette
Using a streamlined process, county officials hope to collect $1 million in unpaid taxes. Tax collectors are working on 300 or more properties where taxes haven’t been paid for up to nine years.
The properties range from a mobile home park in Kannapolis to 200 acres of open land in West Rowan.
Many of the properties that have been on the collections list the longest are caught in family situations, where it’s unclear who owns the property.
Nearly a year ago, county commissioners approved using the process, called “in rem,” which expedites the foreclosure process and allows for a sheriff’s sale of property — much like an auction of surplus equipment. The first sale is set for Feb. 23.
Salisbury attorney Jay Dees recommended the new procedure soon after becoming county attorney over a year ago.
The county had some 500 foreclosures pending. Dees told county commissioners at the outset he doesn’t do foreclosure work.
He said last week that foreclosure work requires people well versed in title searches. Dees said it often takes eight to 10 years before anyone can become really good at it.
Dees recommended attorneys who do title search work. He also recommended that the county do much of its own title work, including possibly hiring a paralegal.
And from the county’s standpoint, that’s a good deal.
Dees said an attorney can easily rack up $4,000 in charges on a $5,000 piece of property that is tied up in estates reaching through a couple of generations. In some cases, a property owner died without a will, a family member took over the property and lived their for years, died or moved elsewhere, and left a son or daughter living on the property. At no point was an estate settled or a deed recorded.
Dees and Tax Collector Glenn Moore said some of these situations require enormous time, including combing through obituaries and doing genealogy work. The tax office or agent has to construct a family tree and try to track down all possible heirs in order to sell the property.
Dees has recommended and county officials appear ready to hire an additional staffer, a paralegal, to help with the paperwork and train staff in the collections office.
“There is a need for a well seasoned paralegal,” said Moore. The collections office currently has one paralegal.
While some of the pending foreclosures will no doubt be costly, the county has collected hundreds of thousands of dollars free of charge.
When a bank or mortgage company forecloses on property, county taxes are first in line to be paid. The county gets the unpaid taxes plus 9.75 percent interest.
The 300 or so properties on the foreclosure list apparently don’t have a mortgage or the property owner is paying the mortgage and not the taxes.
Moore said his office does everything it can to work with property owners who get behind. If that doesn’t work, they do garnishments on wages, about 10,000 a year, or bank attachments, about 400 a year.
All efforts to collect have failed on the 300 currently on the foreclosure list.
Moore said it’s understandable why someone may choose not to pay taxes on a landlocked piece of land near a railroad track. But he’s uncertain why the owner of 200 acres of open land in west Rowan hasn’t paid taxes in five years. The bill is now at $20,000, but the property is valued at nearly $1 million.
Using the “in rim” method and using staff to do the title searches, the cost of the county taxpayer is $50 per foreclosure. “The process is must faster and quicker,” said Moore.
Using the sheriff’s sale, a holdover from old English law, the county will be able to sell multiple properties at one time. Initially, 30 properties were scheduled for the February sale, but Moore said they opted to start small.
Four properties will be sold at first, including two tracts on Old Concord Road, a mobile home park on 22nd Street in Kannapolis and a property on Long Street in East Spencer. The sale is set for 11 a.m. on Feb. 23 inside the courthouse, near the front doors. Moore said they expect to have sales each month until they clear the backlog.