Fewer homes would be subject to tax sales under a compromise reached by legislators and property investors, officials said yesterday.
Responding to cases in which local governments -- primarily Baltimore -- have foreclosed on homes over small debts, including unpaid water and sewer bills, legislators have coalesced around a bill that would increase the threshold for debts that can trigger a tax sale, cap attorneys fees and provide a safety net for the needy.
"We've come together," said Sen. George W. Della Jr., one of the sponsors of the reform. "We haven't passed this thing yet, but we've come a long way. It looks like there's consensus. It will benefit everyone."
The bill, heard in the House Ways and Means Committee yesterday, is drafted as an emergency measure that would cover liens sold in tax sales starting this year.
As drafted, the bill would increase the minimum debt that could trigger a tax sale from $100 to $250, and cap attorney fees at between $1,300 and $1,500, depending on the status of the case.
An investigation by The Sun last year showed that at least 400 city homes were lost over debts other than property taxes during a recent three-year period. Most stemmed from unpaid water and sewer bills, though some also included alley repaving charges, sidewalk repairs and fees to register rental property.
Since then, federal authorities have been looking into possible mail fraud and restraint-of-trade violations in tax-sale auctions in Baltimore and several Maryland counties.
Despite the problems with water bills that result in tax sales, that power is something that the city cannot afford to give up, Del. Maggie McIntosh, a Baltimore Democrat and chairman of the Environmental Matters Committee, testified yesterday.
To make the system work, a task force established by Baltimore Mayor Sheila Dixon devised recommendations that include: a new discounted water and sewer rate for low-income senior citizens, sending duplicate bills to the tenant and the property-owner in rental properties, reduce the turn-off threshold for city water and sewer accounts from $500 to $250 and expand the use of payment plans.
"We've worked very hard, and we've all come to the middle," said Anthony De Laurentis, a Columbia attorney whose firm has bid on behalf of one of the three major investment groups that participate in Baltimore's tax sales. "I just think it will curb abuses by unscrupulous attorneys."
De Laurentis was part of a study group convened by legislators in recent weeks to help forge a compromise on the issue.
But not everyone is convinced that the proposed bill will solve everything.
"We made a lot of progress, but no matter what kind of legislation you put in place, people are going to find a way around it," said Jay A. Dackman, an attorney who participated in the study group and used to buy liens at tax sale. "There's still no oversight for anything prior to 2008. You can charge whatever you want and rip people's eyes out. That's what bothers me."
Still, Dackman said the bill would represent progress.
"If I ever decide to get back in this business -- which I doubt I will -- at least I can feel it's legitimate," he said. "Before it just was not."