Harford County recoups more than $934,000 in delinquent property taxes in 2017 tax sale

Harford County sold tax lien certificates on 404 properties, whose owners were delinquent on paying their property taxes, recouping $934,727.38 during the county's annual tax sale Monday.

"It's more or less those taxes that are in arrears," Harford County Treasurer Robert Sandlass explained.

For those who owe, Monday's successful bidders now hold liens against properties which must either be redeemed by the owners paying the taxes with interest to the lienholders, or the property could go to foreclosure.

There were tax lien certificates on 419 properties for sale, with a combined value of more than $1.075 million.

The certificates were sold via online auction, and there were 23 winning bidders, out of 47 qualified bidders, according to county government spokesperson Cindy Mumby.

The number of properties involved has decreased each year for the past several years — liens related to 419 properties were for sale this year compared to 444 properties last year, 486 in 2015 and 619 properties in 2014, according to county government figures.

The county sold lien certificates on 405 properties last year, recouping $847,708.31, the county reported.

"A little bit more dollars, a little less properties [for sale]," Sandlass said during Monday's proceedings.

Buyers do not purchase the actual property, but pay the value of the taxes plus any penalties owed. The buyer then owns a lien on the property, and that means the owner cannot sell it before the lien is satisfied, according to Mumby.

"In the tax sale, any applicable fees due are attached to the sale, so initially they are paid by the buyers from today [Monday]," she wrote in an email. "But ultimately, they would be paid by the property owner when/if the owner later buys the tax lien certificate from the buyer at today's sale."

Mumby noted that "down the road, there is the potential for foreclosure, which is a process controlled by the courts and subject to certain conditions."

The county spends $63,532 to put on the sale, including costs for advertising, bringing in outside counsel and the online auction. Those costs are passed on to the the buyers through fees that they pay as part of purchasing the tax lien, "so the the general taxpayer isn't subsidizing the process," according to Mumby.

The certificate of sale is valid up to two years after the date of the tax sale, unless the certificate holder begins proceedings to foreclose on the property before the end of that two-year period, according to information posted on the treasury department's website.

The property owner's redemption interest rate is 12 percent per year, according to the county website.

Owners can redeem, or buy back, their properties before the courts order foreclosure, by paying to the treasury department the amount owed for redemption, according to a separate website operated by the county for the tax sale.

The fees that the buyers paid to cover the costs of the tax sale become part of the cost to buy back the lien, according to Mumby.

Monday's sale happened in a small conference room adjacent to the Department of the Treasury offices in the county administration building in downtown Bel Air.

Sandlass, along with Rachel Holmes, chief of the county's bureau of revenue collections; Paula Anis, assistant supervisor of revenue collections; treasurer's office attorney Alan Getz; and intern Magdalena Chojnowska took part in the sale.

Properties for sale and bid information flashed on a television monitor at the far end of the room.

Tax sales are governed by state law, and Harford's sale covers taxes owed to the county, the municipalities of Aberdeen, Bel Air and Havre de Grace, plus the state, according to Sandlass.

Taxes owed to the county go to its general fund, or to enterprise funds such as the water and sewer fund if taxes are owed on water or sewer assessments or user charges.

"The process is that all of those entities have monies that are due to them, and this is the [prescribed] way of those funds being collected," Sandlass said.

A majority of the owners of the properties involved in Monday's sale had not paid taxes owed in 2016, although there were a few other properties from prior years.

Annual property tax bills go out on July 1; half are due by Sept. 30 and the other half are due by Dec. 31.

Staff with the treasurer's office, as well as other county agencies such as Housing & Community Development, work with delinquent taxpayers to help them pay off what they owe — as penalties and interest for late payment accumulate — before the tax sale happens.

"We're trying a lot of different ways to work with people, both through outreach and also through additional programs," Sandlass said.

Counseling programs are available through the housing department for residential property owners, and those who owe taxes can get on a payment plan, in some cases, if they have completed the counseling program.

Staffers also try to help connect property owners with tax credits, such as those for homeowners, which could help them reduce their tax liability, according to Sandlass.

County officials have said in prior years that this outreach could help lower the amount of properties involved in the tax sales.

"We go above and beyond what the state law requires," Sandlass said. "Staff spends a lot of time calling and sending letters and the like."

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