Pay Now To Remove Parcels From County’s Tax Lien Sale

By Tammy Gray-Searles
   “We want to encourage them (property owners) to get with us to make their payments,” Navajo County Treasurer Manny Hernandez said of delinquent property taxes.
   Navajo County is preparing for a tax lien sale, which will include far more properties than usual, at 8 a.m. on Wednesday, Feb. 10.
   Hernandez explained that property owners can pay taxes due, or even make partial payments, up until the time of the sale.
   “We now allow partial payments right up until the time of the tax lien sale. We’ve had a lot of people take advantage of that,” he said. “But once there’s a tax lien, we can’t take partial payments.”
   Property owners may still pay the taxes and remove the lien after the sale, but the full amount due must be paid in a single payment, and there are additional fees and interest.
   According to Hernandez, his office is glad to work with property owners, as much as the law will allow, to help them stay current on taxes.
   “I’d like to tell people, when you get your tax bill, don’t panic,” he said. “We will work with them, but they need to make arrangements right away. It’s a lot easier to help them if they don’t wait.”
   He noted that the county used to be unable to take partial property tax payments, but now is able to do so. Hernandez explained that, for example, payment arrangements made upon receipt of a $700 tax bill would allow the property owner to pay $58 per month for one year, and not become delinquent.
   “Sometimes it’s a lot easier, I know even for me it is, to make smaller payments every month than to try and come up with a large payment all at once,” he remarked. “I really encourage my staff to talk to taxpayers and encourage them to make payments if they are having trouble paying their taxes.”
   Hernandez explained that the upcoming tax lien sale includes properties with delinquent 2008 taxes. Tax bills for the properties were initially sent out in September and October of 2008, and several delinquent notices have been sent out since that time.
   “They have the opportunity to pay until the end of the following year,” he said, explaining that property owners in the upcoming sale had all of 2009, plus about six weeks in 2010 to get current on their taxes.
   “When it becomes delinquent, it goes to a tax lien sale,” he said. “What we’re really selling is the unpaid balance of taxes. The reason we do this is the county and all the other entities have set a budget based on these taxes and if we don’t receive them, there will be a budget shortfall.”
   The tax liens are sold auction-style, but instead of bidding on a price, buyers bid on the interest rate they want to receive if the taxes are later paid by the property owner. Interest rates start at 16 percent, and are bid down.
   “It bids down, until the last bidder is satisfied with the interest rate,” he said. “The average is about eight percent.”
   Hernandez pointed out that the bidders are not purchasing the property, but are purchasing tax liens against the property.
   “At that time, the property owner does not lose their land. The person with the lien has no right to the land,” he said. “The person who owns it still has three more years to pay.”
   In order to remove the lien, the property owner must pay the back taxes, plus the interest rate decided at auction, and a $10 fee to the county. Hernandez noted that a property owner can pay the back taxes at any time, even the day after the auction. If the property owner pays, the lien holder receives his or her initial investment plus interest.
   If the property owner does not pay, the lien holder has the option of continuing to pay the property taxes for three years, then filing for foreclosure on the property.
   “That’s how a person can lose their property to taxes,” Hernandez commented.
   If the lien holder does not pay the taxes on the property the following year, it will be sold again at the next auction, but the purchaser will need to pay both the taxes still due and the amount the original lien holder paid.
   Hernandez noted that anyone can bid at the auction, and that it is not unheard of for interest to be bid down to zero if a family member is trying to protect a property from foreclosure or if an individual is very interested in eventually obtaining the property.
   The Feb. 10 auction is expected to offer more than 4,000 parcels, and Hernandez noted that the high number was shocking to him.
   “The economy has a lot to do with it,” he said. “There are a lot more parcels this year. You feel bad for the people who still have outstanding tax bills.”
   Hernandez emphasized that his office would much rather work with property owners to pay their taxes than have to auction them off. He noted that a large number of tax bills are returned each year, and he encourages property owners to advise the treasurer’s office if they move.
   “If you move, let us know. We send bills to the last known address and make every attempt to find you, but you wouldn’t believe how much return mail we get,” he said.
   Although time is short for catching up on 2008 taxes prior to the auction, Hernandez also encouraged individuals struggling to make their payments to contact his office.
   “I really encourage them to get with us to make their payments,” he said. “They can come in or call anytime, and we can talk about it. We will help in whatever way we can.”