Tax Sale

Tim Nickels' rowhouse in Baltimore went to tax sale over less than $4 in unpaid property taxes and hundreds of dollars in citations for a messy yard. Perfectly legal, under the city's rules. But Nickels was flabbergasted. Baltimore's annual tax sale, an effort by the city to collect on delinquent accounts, has drawn criticism for putting residents at risk of losing their homes over municipal bills as small as $250. Nickels' past-due tab of $955.60 — including the citation fines and late fees — was one of 6,421 unpaid city bills recently sold as liens to investors, who can move to foreclose later this year if the owners don't pay up with interest.

The U.S. Senate recently passed a bill that would allow states to require Internet retailers to collect sales taxes on behalf of local governments. This bill has flaws, but they could be fixed in the House. It should be passed. I don't like the idea of the state and local governments collecting more taxes - they know no limits to their capacity to tax and squander our hard-earned dollars - but the current situation is unfair and bad economic policy. (Also, Marylanders stand to gain from this legislation in another way, because of a state law that will reduce future increases in gasoline taxes if taxing Internet sales is allowed.)

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.

In 1998, when President Bill Clinton signed the bipartisan Internet Tax Freedom Act, which prohibited state and local taxation of Internet access and Internet-only services, the purpose was to promote the commercial potential of the Internet, especially for start-ups and small businesses. Congress extended the bill three times, the latest until 2014. Now there's the Marketplace Fairness Act, which, writes The Washington Post, "would allow states and local governments to require large Internet retailers and other 'remote sellers' with sales over $1 million annually to collect sales taxes and send the revenue to the appropriate location.

In 2003, the Maryland General Assembly changed the laws regarding attorney's fees charged in tax-sale foreclosure cases. The previous standard, a maximum of $400 under any circumstances, was changed to a "reasonable attorney fee" standard as long as a lawsuit has been filed. This was an attempt to compensate attorneys for their time and expertise in matters that were both tedious and technical, and whose time was worth more than the $400 cap that had been in place since 1985. Before the change, there were about 500 tax-sale lawsuits in Baltimore annually.

Haven't paid your city property taxes? Then you're on the city's list of owners whose properties could end up in tax sale this May, along with nearly 27,000 others who (as of last week) were behind on taxes, water bills or other city tabs. That's more than 10 percent of city properties, located in neighborhoods as varied as Poppleton and the Inner Harbor . If previous years are any judge, many owners will pay up quickly and avoid tax sale altogether. Here's an interactive map that shows where all the properties are. You can click on the dots for more details, including the address, who owns and how much the city says they owe. (Keep in mind that some may have paid already -- and at least one is an error .)

A reader asks when and where tax sales are held in Baltimore City and county. He wants to know how to buy a property at a tax sale. Dear reader: Taxes and other public charges are liens on real property. When the liens become delinquent, Baltimore City and Maryland counties are authorized to sell the tax liens at public auction to the highest bidder. The purchaser at a tax sale pays the lien and receives a tax sale certificate. The owner of the property has six months to redeem the property by reimbursing the purchaser the amount of the liens paid, plus interest.

Mayor Stephanie Rawlings-Blake and City Council President Bernard C. “Jack” Young came to an important accomodation Friday in their standoff about tax sales over unpaid water bills. The mayor was probably right that the two-year moratorium on tax sales Mr. Young had proposed endangered the city's bond rating, but Mr. Young was right to stand firm on the principle that no one should risk losing a home based on an estimated water bill. Now the mayor has agreed to send to tax sale only properties for which the unpaid bills are based on acutal meter readings, and that is progress.

Nearly 27,000 city properties in March were in danger of going to tax sale, but ultimately about 10,600 had liens included in the auction Monday. Investors bought 6,545 of the lien certificates , which raised $20 million for the city, according to the Finance Department. It's not unusual for property owners to pay up in April, just before the annual spring tax sale. But one of the narrowest misses this year was a case in which the homeowner paid last month -- after she learned that the state had retroactively reduced a tax credit on her property -- and the city lost the check.

Whether estimated, misread, misrecorded, or just plain mistaken, no erroneous water bill should send any properties to tax sale ("Tax sale timeout," March 25). In its City Council testimony of March 21, the Public Works and Finance departments pledged to investigate all 2,300 pending tax sales occasioned by water bill liens and to provide documentation of their property-by-property findings of accuracy or error before the April 30 tax sale deadline. Based on these findings, fairness dictates that all categories of questionable water liens must exempt properties from being sold to May 2012 tax sale investors.

Six Baltimore community groups filed an $8 million lawsuit Tuesday against a Texas man whose companies own dozens of properties in the city, alleging that he failed to improve rundown homes after purchasing them at tax sales and allowed them to become a danger. "The lawsuit challenges the practice of purchasing vacant properties at tax sale and leaving them for dead with unaddressed city code violations," said Kristine Dunkerton, executive director of the Community Law Center Inc., a nonprofit based in Baltimore that represents the community associations.

If you're sure your property is worth less than the state says it is, you might want to contest it. This heads up is brought to you by RG Steel, which struck a deal -- after several years of appeals -- that reduces its taxes on the Sparrows Point steel mill by about $830,000. Odds are, you're not in a position to save quite that much. But it's a helpful reminder nonetheless. A rundown of the Sparrows Point situation , in case you're curious: RG Steel filed for bankruptcy in May, so cash-strapped that it estimated it had more than 1,000 creditors -- Baltimore County among them.

At the Oakleigh Pet Cemetery in Parkville, Bobby the Wonder Monkey's tombstone is hidden in ivy. Weeds surround the grave of Monsetta, remembered as "Our only girl. " And on Snookie's stone marker, the epitaph "Until the end our faithful pal" is barely visible behind the brush. The owner of the 2.5-acre cemetery near Loch Raven Boulevard says he is trying to clean up, but he has racked up nearly $30,000 in unpaid county fines and fees for persistent problems such as overgrown vegetation, junk scattered on the grounds and broken windows.

Baltimore County police are warning that scammers are trying to trick homeowners into coughing up money by claiming they're behind on property taxes -- and threatening to send a sheriff to their door if they don't immediately mail a check. The county will put a lien on your property if you're delinquent and include it in the annual tax sale (June 4 this year), but it's not dispatching police to collect the tab. If you get a call, police say, don't send money and don't give out personal information.

The first big wave of layoffs hit Sparrows Point on Friday after the steel mill's owner essentially shut down its critically important blast furnace. Joe Rosel, president of United Steelworkers Local 9477, said most of the workers told not to report back to the Baltimore County mill next week were in the iron- and steelmaking departments, though he couldn't say how many were notified. Other workers, including many in central maintenance, also were notified. The "L" blast furnace shutdown that began Wednesday starts a domino effect of layoffs that is expected to affect nearly 2,000 workers - all but a few hundred at the steel mill.

Nearly 27,000 city properties in March were in danger of going to tax sale, but ultimately about 10,600 had liens included in the auction Monday. Investors bought 6,545 of the lien certificates , which raised $20 million for the city, according to the Finance Department. It's not unusual for property owners to pay up in April, just before the annual spring tax sale. But one of the narrowest misses this year was a case in which the homeowner paid last month -- after she learned that the state had retroactively reduced a tax credit on her property -- and the city lost the check.

Kristina Suson's home wasn't part of the city's tax sale Monday, but it was a close call. Baltimore places liens on properties for unpaid property taxes, water bills and other municipal debts, then puts the liens up for auction every spring — allowing investors to buy them and either collect or move to foreclose. The city auctioned liens on about 10,600 properties on Monday, finding buyers for 6,545 of them and raising $20 million. Suson ended up on this year's list, to her surprise, after the state retroactively reduced a property tax credit she'd received in 2009.

Mayor Stephanie Rawlings-Blake agreed Friday to temporarily stop seizing homes over unpaid water bills in cases where the bills were estimated, a practice that city officials say led to widespread inaccuracies. The move is a compromise between Rawlings-Blake and Council President Bernard C. "Jack" Young, who had sought a comprehensive moratorium on home seizures over water bills after an audit showed serious problems with the accuracy of the city's bills. Rawlings-Blake and Young announced the deal Friday.

Kristina Suson's home wasn't part of the city's tax sale Monday, but it was a close call. Baltimore places liens on properties for unpaid property taxes, water bills and other municipal debts, then puts the liens up for auction every spring — allowing investors to buy them and either collect or move to foreclose. The city auctioned liens on about 10,600 properties on Monday, finding buyers for 6,545 of them and raising $20 million. Suson ended up on this year's list, to her surprise, after the state retroactively reduced a property tax credit she'd received in 2009.

Heaven forbid you fall back on your property taxes in Baltimore City and your home goes to the property tax sale! Not only will you pay 18 percent interest on the money, you will pay ever increasing legal fees, and the city will demand that you pay taxes that are not overdue. Then, to top this off, no arrangements can be made. They want all that money to redeem your property at once. There was a story not long ago about bid rigging in this process. Well, the city employees sure know these predatory lawyers pretty well.