You can DO that?

Last week, we got a letter at our office that one of our client’s (as in, the Estate) houses had been sold at a tax sale.  I immediately checked online to see if the taxes had been paid, and all but this year’s had been properly paid.  Yet here was an attorneys office telling the client that not only hadn’t the taxes been paid, the house had already been sold at a tax sale (which our office had received no notice of.)  Technically, if the taxes aren’t paid for this year, the house can’t be sold until December at the earliest.

So thinking it was a scam, and smelling something fishy, I spent twenty minutes on hold waiting for the department that manages tax sales.  Finally getting a person to talk to, she flatly told me that yes, the debt had been sold.  Not this year’s debt, last year’s debt.  Last year’s debt had been sold and the letter, stating that the client now owed the debt as well as an additional $750 in attorneys fees as well as an exorbitant interest rate, was legit.  Apparently the tax debt showed up as paid because it had been paid by the person who bought the debt.

At which point I sat there, staring at the paperwork, thinking “you can do that?”  It has been amazing to me to learn the many ways that people can lose their homes in this economy and system.  The decedent had died before paying his 2009-2010 taxes, and when the PR went in to pay the 2010-2011 taxes a year ago, they had her pay the 2009-2010 taxes, without being totally clear.  The notices as to the tax sale may have gone to the property address, where there are a couple of squatters (who happen to be family members) living in the house, and not giving her the mail.

I struggle a lot with feeling conflicted.  Because they spend three years teaching you to see both sides of the argument, so I get it.  On the one hand, the city is basically broke and it doesn’t do them any good to have a whole bunch of unpaid debts, and if some attorney and title company wants to do the work of collecting on the debt, it’s understandable that the city would sell the debt.  On the other hand, it still seems monstrously unfair (and it concerns me a little that we still rely so completely on the mail as the method for notifying people, but I can’t think of a better system.) It’s worth it for the PR to pay the $750 and keep a house that’s worth around $100,000, which is probably why it feels so unfair – it’s a good way to make some quick money (as long as you buy debts on houses that you think people will redeem).  Yet, on the other hand, the taxes didn’t get paid, and they should have been, and the city doesn’t care who pays them.

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One response to “You can DO that?

  1. Heh. My husband actually helps a friend do this in Baltimore every spring. The guy has a shady, shady real estate business, and they go from address to address on a tax liens list, and then the guy buys as many viable properties as he can. My husband gets a 5% interest in the properties, but um…the first one he helped with was YEARS ago, and he still hasn’t seen a dime. I wonder if our contact is the person who bought your client’s tax debt…

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