This land could be your land

By Ed Brock

Despite Tuesday's wintry winds, Lester Spriggs Jr., stopped on the courthouse steps to observe the monthly tax auction of land.

The land for sale belonged to people who for one reason or another failed to pay the taxes they owed. Spriggs, who lives in McDonough, was looking for a few acres on which to build a home for his family.

"If property's being sold for $600 I'm interested," Spriggs said.

It may seem like a deal, but after learning some of the details of the transaction Spriggs decided it wasn't for him.

The auction is held on the first Tuesday of each month in front of the Harold R. Banke Justice Center on Tara Boulevard in Jonesboro. Each one draws a sizable crowd of potential buyers like Alan Reyes of Fayetteville.

Reyes is a real estate investor who moved to Fayette County from Louisiana about a month ago.

"I look for undeveloped property in a number of different ways," Reyes said. "Driving along I see an overgrown yard, I find the owner and see if he wants to sell."

Reyes got into the business about three years ago when he saw a few friends making a lot of money from it.

"I've seen a lot lose their trousers, too," Reyes said.

But those who are careful and don't take too many risks can do well, Reyes said. He buys the property, sometimes has to renovate it some, then sells them as quickly as possible.

There are many steps before a piece of property winds up on the auction block, but it all starts with non-payment of ad valorem taxes, said attorney Don Foster who helps the county with the auction.

"What happens is if you don't pay your ad valorem taxes – at a point the tax commissioner, by necessity and by law, has to take action," Foster said.

First the commissioner's office gives several notices to the property owner on record. Then, usually after about 60 days, they come to Foster who does a title search and again serves notice to everybody who has any lien or attachment to the title on the property. Then it has to be publicized in the newspaper for four weeks.

Anyone with a lien on the property is notified, but the tax lien must be satisfied first before any other lien, said Clayton County Deputy Tax Commissioner Jim Grant.

If there is no response from the owner, the property goes to the auction where the bidding starts at the cost of the taxes owed, plus any interest and fees.

"The whole point is to collect the taxes," Foster said.

Whatever money is collected above the cost of the back taxes and fees is held by the county in a special fund, not the general fund, Grant said. The money must be identified with the property sale from which it was generated and might be returned to the original property owner if they redeem their claim on the property.

The highest bidder on the property doesn't own it right away. They have one year during which they have a better claim on the property than anybody else, but the owner of the property can still redeem their claim.

To do that, the owner must pay the person who bought the claim the cost of the claim plus a fee.

If not, the person with the claim, after one year, must go to court to either get a clean title or legally foreclose on the property, thus wiping out the owner's right to redeem.

That procedure is a little different from how it's done in Henry County, said Tax Commissioner Andy Pipkin. Pipkin's office goes before a Superior Court judge before selling the property, showing that due notice was given, and so the buyer at the auction then has clean title to the land and can start using it within 60 days.

"It's a lot cleaner and a lot easier for the tax payer," Pipkin said.

Reyes said he likes the sound of the Henry County system, which is similar to the one in Louisiana.

Pipkin said they may start with 30 or 40 delinquent property owners a month but usually only zero to five will end up at the auction.

"Most people are going to pay off," Pipkin said.

Those who don't pay off are frequently abandoning the property for one reason or another.

But sometimes the homeowner defaults out of ignorance, said Clayton County Tax Commissioner Terry Baskin.

"Some homeowners have no idea what a tax bill is or what it's for," Baskin said.

Tax bills are sent out in September, Baskin said, and most people who have a mortgage on their home with an escrow account should send the bill to their mortgage company.

"If they don't it should be budgeted so it's paid in the 60 days," Baskin said. "Even if they're not sure what's going on, call our office."

Baskin said his office auctions an average of 6 to 12 properties a month, but he plans to further increase the county's already good tax collection rate before it reaches the point of auctioning property by "going the extra mile to make sure (the people) understand the process."

"It's all about education," Baskin said.

The auctions have nothing to do with foreclosures on property by mortgage companies whose clients are in default, Baskin said. In those cases, however, the mortgage company will usually pay off the taxes on the property on which they plan to foreclose.

"That means they take the lien (on the property)," Baskin said. "That's what secures their hand on the property even more."