Thanks, Jim.  As usual, you are a wealth of great information!

 

Carol

 

Carolyn S. Dawes

Barre City Clerk/Treasurer

6 North Main St.

PO Box 418

Barre, VT   05641

(802) 476-0242 phone

(802) 476-0264 fax

www.barrecity.org

 

 

 

From: Vermont Municipal Government Discussion Network [mailto:[log in to unmask]] On Behalf Of Jim Barlow
Sent: Friday, November 16, 2012 3:50 PM
To: [log in to unmask]
Subject: Re: Tax Sales

 

Hi Everyone,

 

Before this goes too much further - and people become unnecessarily confused - there is no statutory requirement that excess tax sale proceeds (i.e., the amount that the buyer at the sale paid less the amount owed to the town by the taxpayer) be held in an interest bearing escrow account during the redemption period.  In fact, the statutes are completely silent on how excess tax sale proceeds should be treated during the redemption period.    

 

The issue was addressed, but not resolved, by the Vermont Supreme Court  in Ran-Mar v. Town of Berlin,  2006 VT 117.   As the justices discussed, holding the excess proceeds during the redemption period may be the prudent thing for a town to do in some cases.  In other instances, it may be better for the town to turn the excess proceeds over to the taxpayer.  You can read the Ran-Mar decision here.  

 

You will note that the Ran-Mar decision doesn't touch on whether excess proceeds should be placed in an interest bearing account during the redemption period.   In my opinion, if a town holds excess tax sale proceeds during the redemption period, it should place them in an interest bearing account.   I think Doreen's explanation of how to apply the interest -  "the interest follows the principal" - is excellent.    

 

I will be discussing excess proceeds (and many other confusing but important tax sale topics) at the upcoming VLCT workshop Effective Collection of Delinquent Property Taxes.   The workshop will be held on December 11 in Middlebury and December 13 in Fairlee.  You can learn more about the workshop and register for it at the Event Calendar page on the VLCT website.   

 

In the meantime, if you have a tax sale question, please feel free to contact us at the VLCT Municipal Assistance Center. 

 

Jim

 

Jim Barlow

Senior Staff Attorney

VLCT Municipal Assistance Center

[log in to unmask]

229-9111 x 1914

229-2211 (Fax)

 

This transmission may contain privileged and confidential information.  It is intended only for the use of the person(s) to whom it  is addressed above.  If you are not the intended recipient, you are hereby notified that any review, dissemination, distribution or duplication of this communication is  prohibited.  If you are not the intended recipient, please contact the sender by reply email or telephone and destroy all copies of the original message.  Thank you.

 

 

 

 

 

 

 

 

 

From: Vermont Municipal Government Discussion Network [mailto:[log in to unmask]] On Behalf Of Adrienne Raymond
Sent: Friday, November 16, 2012 2:00 PM
To: [log in to unmask]
Subject: Re: Tax Sales

 

I suspect the reason to require the $ be put in an interest bearing acct. is that the State does not want towns to use the money interest free and the $ earned in the account will offset some of the $ required for redemption by the original owner.  That said the 12% sounds more like usury given current % rates, but that is one reason people take the chance of buying tax sales.  


From: Bobbi Brimblecombe <[log in to unmask]>
Organization: Declude, Inc.
Reply-To: Vermont Municipal Government Discussion Network <[log in to unmask]>
Date: Fri, 16 Nov 2012 13:47:31 -0500
To: <[log in to unmask]>
Subject: Re: Tax Sales

Why would the town have to come up with 12% interest? The interest due to the bidder is paid by the delinquent taxpayer.


At 11:45 AM 11/16/2012, you wrote:

Check with your town attorney-  I believe interest paid to the successful bidder at tax sale upon a redemption is the legal rate (12%).  I suspect that the rate on an "overage" may be the same.

On Thu, Nov 15, 2012 at 9:50 AM, Doreen Woodward < [log in to unmask] <mailto:[log in to unmask]> > wrote:

Our bank does them in seconds…I just call and say one needs to be opened up and the amount.  When I get to the bank the paper is there, ready for me to sign.  Since we only do tax sales once a year, these accounts are all opened on the same day.  And, there is no activity in them unless I call to say they have to be closed out – I have it transferred to our general fund and cut the check from there.

 

From: Vermont Municipal Government Discussion Network [ mailto:[log in to unmask] <mailto:[log in to unmask]> ] On Behalf Of Carol Dawes
Sent: Thursday, November 15, 2012 9:43 AM
To: [log in to unmask]
Subject: Re: Tax Sales

 

Hey Doreen,

 

Thanks for the info.  Lots of work to open/close accounts! We just have an escrow line item in our chart of accounts.  I’ll review all the info I’ve gotten with our city attorney and come up with a plan.

 

Thanks again,

 

Carol

 

 

From: Vermont Municipal Government Discussion Network [ mailto:[log in to unmask] <mailto:[log in to unmask]> ] On Behalf Of Doreen Woodward
Sent: Thursday, November 15, 2012 9:24 AM
To: [log in to unmask]
Subject: Re: Tax Sales

 

Hi Carol –

 

The rule I was taught is “the interest follows the principal”. Here’s how we do it – any excess from the tax sale goes into an interest-bearing account at the bank.  When the owner calls in for a payoff to redeem within the year, we find out what the balance is at the bank and deduct that amount from what is due the person who was high bidder at the tax sale, give that net amount information to the property owner.  When he/she comes in to pay, we close the interest-bearing account, combine that balance with the money the property owner paid to redeem, and send one check off to the high bidder.  If the property owner does not redeem, a Tax Collector’s Deed is given to the high bidder and the interest-bearing account is closed out and paid to the former property owner.

 

Doreen

 

 

Doreen Woodward

Town Clerk/Treasurer

Town of Westminster

P O Box 147   3651 US Route 5

Westminster, VT 05158

Tel: 802/722-4091 <tel:802%2F722-4091>    Fax: 802/722-9816 <tel:802%2F722-9816>

[log in to unmask]

 

 

 

From: Vermont Municipal Government Discussion Network [mailto:[log in to unmask]] On Behalf Of Carol Dawes
Sent: Wednesday, November 14, 2012 4:42 PM
To: [log in to unmask]
Subject: Re: Tax Sales

 

Kathy Sheele just sent me an email saying you are correct – that there is old case law that supports interest.  But that just creates more questions.  Interest from when to when?  At what percentage?  Who is responsible to pay the interest?  Doesn’t seem right to have it paid by the City.  I asked Kathy those questions and will share her answers.  She’s not currently able to post to muninet because she has a new email account.

 

Carol

 

 

From: Vermont Municipal Government Discussion Network [mailto:[log in to unmask]] On Behalf Of Bobbi Brimblecombe
Sent: Wednesday, November 14, 2012 3:47 PM
To: [log in to unmask]
Subject: Re: Tax Sales

 

Oh, when we had a recent tax sale, our attorney told me to escrow the extra money in an interest-bearing account. But I'm not sure we have always done that.

At 03:29 PM 11/14/2012, you wrote:

Hey Bobbi,
 
I didn’t think the owner is entitled to interest.  At least we’ve never paid them any!
 
Carol
 
Carolyn S. Dawes
Barre City Clerk/Treasurer
6 North Main St.
PO Box 418
Barre, VT   05641
(802) 476-0242 <tel:%28802%29%20476-0242>  phone
(802) 476-0264 <tel:%28802%29%20476-0264>  fax
www.barrecity.org <http://www.barrecity.org/>  
 
 
 
From: Vermont Municipal Government Discussion Network [  <mailto:[log in to unmask]> mailto:[log in to unmask]] On Behalf Of Bobbi Brimblecombe
Sent: Wednesday, November 14, 2012 2:12 PM
To: [log in to unmask]
Subject: Re: Tax Sales
 
It goes back to the property owner, with interest. The Town can not profit from a tax sale.

Bobbi

At 11:49 AM 11/14/2012, you wrote:

When someone over pays for a property on a tax sale, and the property is not redeemed by the original owner, what happens to the extra money after the 1 year period?
 
Stacy Jewell
Town Clerk / Treasurer
Town of St. Johnsbury
51 Depot Square, Suite 101
St. Johnsbury, VT  05819
802-748-4331 <tel:802-748-4331>
 


NOTICE: Under Vermont’s public records law, documents - including e-mail - in the possession of public officials about town business are classified as public records. This means if anyone asks to see it, we are required to provide it. There are very few exceptions. We welcome citizen comments and want to hear from our residents, but please keep in mind that what you write in an e-mail is not private and could show up in the local newspaper.

Bobbi Brimblecombe
Marshfield Town Clerk
122 School Street, Room 1
Marshfield, VT 05658
(802) 426-3305 <tel:%28802%29%20426-3305>
[log in to unmask]


NOTICE: Under Vermont’s public records law, documents - including e-mail - in the possession of public officials about town business are classified as public records. This means if anyone asks to see it, we are required to provide it. There are very few exceptions. We welcome citizen comments and want to hear from our residents, but please keep in mind that what you write in an e-mail is not private and could show up in the local newspaper.

Bobbi Brimblecombe
Marshfield Town Clerk
122 School Street, Room 1
Marshfield, VT 05658
(802) 426-3305 <tel:%28802%29%20426-3305>
[log in to unmask]




--
Jack B


NOTICE: Under Vermont’s public records law, documents - including e-mail - in the possession of public officials about town business are classified as public records. This means if anyone asks to see it, we are required to provide it. There are very few exceptions. We welcome citizen comments and want to hear from our residents, but please keep in mind that what you write in an e-mail is not private and could show up in the local newspaper.

Bobbi Brimblecombe
Marshfield Town Clerk
122 School Street, Room 1
Marshfield, VT 05658
(802) 426-3305
[log in to unmask]