Homeowner rescues real estate from tax sale

For more than 30 years, Gary Kent Jones owned the house at717 North Bryan St. in Little Rock, Ark. He lived there with his wife untilthey separated in 1993. Jones then moved to a nearby apartment. His wife anddaughter continued living in the house.

Until 1997 when Jones made the final payment on his 30-yearmortgage, the mortgage lender paid the property taxes to the local taxcollector. But because Jones failed to notify the tax collector of his newaddress, the property taxes went unpaid since 1997.

Purchase Bob Bruss reports online.

In April 2000, the state lands commissioner sent Jones acertified mail notice the house would be sold in 24 months in 2002 if he didn’tpay the delinquent property taxes. But Jones never received that notice, whichwas returned to the tax collector marked “unclaimed.”

Two years later, just before the tax sale, the state landscommissioner sent another certified letter to Jones at the property. It wasalso returned by the post office as “unclaimed.”

The commissioner then published an official notice in thelocal newspaper listing properties to be sold for unpaid property taxes. Nobids were submitted for the Jones property.

Several months later, as allowed by state law, Linda Flowersbought the Jones property for total unpaid property taxes of $21,042. The househad an estimated fair market value of at least $80,000.

After the 30-day period for post-sale redemption passed,Flowers had an unlawful detainer eviction notice delivered to the house. It wasserved on Jones’ daughter who then notified her father of the tax sale.

Jones then filed a lawsuit in state court to prevent loss ofhis free-and-clear house. He lost. Then he appealed to the Arkansas SupremeCourt and lost again. But the U.S. Supreme Court granted a writ of certiorariand heard the case appeal.

If you were a U.S. Supreme Court justice would you ruleJones received sufficient notice and he should lose his home for failure to payproperty taxes?

Chief Justice Roberts said no!

Due process requires a property-tax collector to make everyreasonable attempt to give actual notice to a property owner before selling anasset for unpaid property taxes, Chief Justice Roberts wrote. There are manyreasons why a certified letter might not reach a person, he continued, such asfailure to be home when the postal carrier delivers the mail, failure to go to thepost office within 15 days to pick up the certified letter, or other reasons.

At the very least, the tax collector should have mailed thedelinquency letter by ordinary first-class mail, which would be forwarded ifthe property owner moved, and posted a notice on the property before selling itat a tax sale, the justice explained.

Although Jones had a duty to notify the local tax collectorof his new mailing address and to pay his annual property taxes or risk loss ofthe residence, the tax collector failed to use reasonable methods to notify theproperty owner of the pending tax sale, which is therefore void for violationof due process, Chief Justice Roberts ruled.

Based on the 2006 U.S. Supreme Court decision in Jones v.Flowers, 126 S.Ct. 1708.

(For more information on Bob Bruss publications, visit his
Real Estate Center
).

Copyright 2006 Inman News

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