In an effort to spare some homeowners the loss of their properties in municipal tax sales, lawmakers are proposing several reform measures.
State Sen. George W. Della Jr. has introduced legislation to cap legal fees at the end of the court process and to improve notification. The Baltimore Democrat says he hopes to cut expenses and save homes.
Legal costs in these lawsuits have soared in recent years, making it harder for homeowners to regain the rights to their properties by paying back taxes and accumulated fees. Della has said he believes lawmakers are at least in part responsible for creating the problem. In 2003, the legislature removed a $400 cap and permitted lawyers to charge "reasonable fees," subject to court approval, once a case gets to court.
In Baltimore Circuit Court, the caseload rose tenfold. Slightly more than 400 cases seeking to foreclose on homes for back taxes or municipal fees were filed in 2002. In one two-week period last year, lawyers filed 3,000 such cases, according to a court official. At one point in December, about 4,000 cases were pending in Baltimore.
"If this were to become law, there would be a substantial reduction in the number of foreclosure filings," said Della, a longtime advocate for homeowners.
The proposed law would cap attorney fees at $500 until a suit to foreclose the right of redemption is filed. Then "reasonable attorney fees" may be sought, not to exceed $1,000.
State Sen. Richard Madaleno, a Montgomery County Democrat, has proposed a bill to raise the debt threshold for properties sent to tax sale from $100 to $500.
An investigation by The Sun last year showed that at least 400 homes were lost in a recent three-year period by Baltimore homeowners for debts other than property taxes, and that half were for unpaid municipal charges of $500 or less. Many of the debts included Baltimore City water bills.
Del. Maggie L. McIntosh, a Baltimore Democrat and chairwoman of the Environmental Matters Committee, said that she expects to take up legislation to lengthen the amount of time before a foreclosure results from a tax sale once notice is given, and possibly on changes to the way the city bills its residents.
"We want to make sure that the city does everything it can to avert a resident from losing a home due to a water bill," McIntosh said.
