Property owners who are two years late on their taxes might see their properties on the list for Upset or Judicial sale.
Taxing bodies want their money.
The sales coming up in September, with a list of properties published in the F-section of today's Times Observer, are for delinquent taxes. The sales are set for 1 p.m. Monday, Sept. 10, in the Main Courtroom at Warren County Courthouse.
There are more than 1,200 properties in that category.
Many will be paid before the sale, according to Denny Munksgard, who is Warren County treasurer and tax claim bureau director.
There are problems with waiting until the last minute.
"Some people get caught up in paying the smallest one," Munksgard said. Paying for 2011 when 2010 taxes are due will not take the property off the list. Personnel in the tax claim bureau can help property owners know which year they have to pay to avoid the sale, but those who pay late may not have the luxury of time to spend asking questions.
The office will not accept all types of payment as the sale grows close. "From the 20th of August I will only accept cash," Munksgard said.
The bureau can be a busy place on the morning of the sale.
"If they wait to the last minute, there could be a line out the door and their property could be sold while they're standing in line," Munksgard said. "If you don't pay before the sale, your property is going to sale."
According to Munksgard, the list of properties published is about half-again as long as usual this year.
He said that is in part due to the timing of one of the notices sent out to let people know their properties are in jeopardy of going to the sales.
"The Notice of Public Sale historically has gone out in June," he said.
That notice has to go out at least 30 days before the sales in September.
This year, the notice went out in July.
"They've become dependent on the Notice of Public Sale as a reminder," Munksgard said.
However, the Notice of Claim and Return gives those with delinquent taxes one full year.
When the tax claim bureau is notified of delinquent taxes for the previous year, the Notice of Claim and Return is sent in July. That notice tells property owners they have until July 1 of the following year to get their taxes up to date.
The sales themselves are growing in popularity as places to pick up cheap investment property.
In other parts of the state, "they have been beyond capacity in the courtrooms," and deputies have been stationed outside the doors to keep more people from entering, Munksgard said.
That hasn't happened yet in Warren County.
For the Upset Sale, the taxes owed, plus the costs and fees associated with listing and selling the property, and any municipal liens set the minimum bid price for a property.
If a sewer authority has a lien against a property, that debt will be covered in the minimum sale price. The county's costs will be covered, and all taxing bodies will get the amounts they are due.
The Upset Sale is the first in the sale process.
A property with 2010 taxes due can be sold.
"Upset Sale includes all (non-municipal) liens," Munksgard said. "You're responsible for the liens."
The most common lien against a property is a mortgage. A buyer at Upset Sale takes on any mortgage agreement the former owner had.
A property owner can avoid Upset Sale by entering into agreement with the bureau and paying at least 25 percent of the amount due prior to the sale. Subsequent payments would be due every three months with the taxes being fully paid off in June of the following year. Failure to fully pay off the debt would result in the property going back up for sale, Munksgard said.
The primary differences between Upset Sale and Judicial Sale are that taxes are not included in the price and mortgages and other non-municipal liens are wiped clean for the buyer.
"The property is sold without liens," Munksgard said.
Any property that is not sold at Upset Sale and taxes are still owed for at least two years goes to Judicial Sale.
If the auction results in a winning bid of more than the minimum, funds over and above the costs and fees go toward taxes, municipal liens, and the mortgage- or other lien-holder, to the limit of those liens, then to the former owner. The county has the right not to sell a property that does not satisfy the taxes and liens.
"The only way to avoid Judicial Sale is to pay the entire amount due," Munksgard said.
Only 64 of the properties on the combined list are in the Judicial Sale category.
Both sales will be held on Sept. 10. The Upset Sale will begin at 1 p.m. At its conclusion, the Judicial Sale will begin.
Although the full amount of delinquent taxes must be paid to avoid a judicial sale, the payments don't have to come in all at once. "I can receive partial payments," Munksgard said.
If a property owner who owes $1,000 in back taxes wants to pay the amount off week-by-week or month-by-month, that is allowable.
There is a $2 per payment fee for each partial payment.
"Some people know about it and utilize it. It really helps them out," Munksgard said. "There's a good amount of people that are not aware of that option."
"Any unsold properties from the Judicial Sale end up in the repository," Munksgard said.
The county holds the rights to sell the properties. "People can then make a bid on the property," he said. "I submit the bid to the school district, county and municipality."
Each group gets a look at how big its cut of the tax debt pie will be after the county takes out its costs and fees from the sales.
If any owed body does not accept, the bid is rejected.
Typically, "at that point, the taxing district's interest is to get the property back on the tax rolls," Munksgard said.
If the bid is approved, the buyer owns the property "divested of all claims."
Munksgard said people sometimes get blindsided by back taxes when they buy mobile homes.
"If you purchase a mobile home, you assume the liability of any unpaid taxes," he said. "A trailer is a titled asset like a vehicle. The bank will not escrow taxes on titled assets."
"This happens a lot," he said. "These people get blindsided by taxes they didn't know they owed."
He suggested contacting the tax collector or the tax claim bureau before buying.
A Sheriff's Sale is entirely different from the sales handled by the tax claim bureau.
Generally, properties that go to Sheriff's Sale are ones that are foreclosed on by a mortgage-holding institution.