Properties that owe to show on auction floor

Properties that owe to show on auction floor

May 28th, 2010 by Dan Whisenhunt in News

On Thursday, bidders will have the chance to buy bargain-basement homes on the Hamilton County auction block, a move that helps the county recover back-taxes from owners who have fallen behind.

But county officials say they don't make money off the sales and think it would be better for everyone if the property owners would pay what they owe.

This year, delinquent properties in the county increased 48 percent and 104 percent in the city of Chattanooga, Chief Tax Deputy Shannon Miller said.

Staff Photo by Angela Lewis/Chattanooga Times Free Press A house at 3202 14th Avenue

Staff Photo by Angela Lewis/Chattanooga Times Free Press...

"Some (owners) may be deceased," she said. "Some just don't have the money."

The county trustee collects taxes and, when taxes aren't paid, the trustee sues in the Chancery Court to get the taxes back, said County Clerk and Master Lee Akers.

The property becomes eligible to be auctioned when taxes are four years overdue.

The auction is supposed to cover any taxes owed the money the county spent recovering it, including attorney fees and court costs. The county holds the auctions once a year in June. The county can auction properties even if the value of taxes owed is less than the value of the property being sold.

"These governments can turn around and sell it for a dollar if they want to," Mr. Akers said. "There's not really any money in it. By the time you go through everything, the county is in the hole. If everybody would pay their taxes, the county would make more money."

Anything that doesn't sell becomes property of the city or the county, Mr. Akers said. The city or county can sell the property after a one-year redemption period, in which homeowners have an opportunity to buy back their property from the city or the county. They can redeem their ownership by paying back taxes plus 10 percent interest to the buyer.

For that reason, Ms. Miller said buyers should not do anything with the properties they buy for a year.

After the redemption period ends, the city or the county is responsible for upkeep of the property and liability, Mr. Akers said.

"If they have a property with a pool on it and someone falls into the pool, the city or the county would be liable," Mr. Akers. "They have same liabilities as any other owner."

But, he added, it is much harder to sue the city and county than it is to sue a regular homeowner because of state laws.

This year, all the properties that started drying up on their tax payments in 2006 have moved to the front of the line.

Delinquent properties auction

* When: 10 a.m. Thursday

* Where: Hamilton County Commission Room, Fourth Floor, Hamilton County Courthouse, 625 Georgia Ave.

* If you go: All people interested in bidding must register at 9 a.m. at the auction site

* As of Wednesday: 271 delinquent properties up for auction in the county and 45 in the city

"We give them to a certain date to pay just the 2006 taxes to keep it out of the sale," Ms. Miller said.

Ms. Miller and Mr. Akers said many buyers attend the auction with the intent of collecting the 10 percent tax penalty. Ms. Miller said owners redeem about half of the properties sold at auction.

County Trustee Carl Levi said he sees the same names pop up on the delinquent properties list each year, and said most of the homes for sale "kind of hold the world together," an expression used in his office meaning old property no one would want.

"A lot of people get the idea they can let their taxes go and go to the tax sale and buy it for a cheap price," Mr. Levi said. "It's amazing how many people will come in here and repurchase their property. They'll pay up."

He also said there are professionals who do nothing except buy delinquent properties. But the county is not in the delinquent property business, he said.

"If you can get out of it what you've got into it, you're doing good," Mr. Levi said. "A lot of this stuff doesn't sell."

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