Real Estate Lawyers: Is "Sand and Fog" Plausible?

Factual Questions
1

I don’t depend on the movies for a lot of information about the real world, but “The House of Sand and Fog” hinges entirely on a series of specific real estate transactions, and I wonder how realistic the premise is. Without getting bogged down in a lot of plot twists, the key elements are:

1/ Police and other authorities appear at a young woman’s door and tell her that the town has taken possession of her house for non-payment of taxes, and they evict her on the spot.

2/ She goes to a lawyer, and it is revealed that:

a/ The house was left outright to her and her brother jointly by their father. (The brother lives somewhere else and does not appear in the movie, but he is reachable and in a phone conversation sounds like a harried businessman.)

b/ The town incorrectly believes that the woman owes $500 in business taxes. When she first received a notice about the matter, she went to the town hall and filed paperwork advising authorities that she didn’t own or operate any business and therefore didn’t owe any business taxes. She, being something of a ditz, failed to read or even open subsequent letters from the town about the matter.

c/ The town auctioned the house immediately after taking possession and accepted a sale price of one-fourth the property’s fair market value. The woman apparently receives no share of the proceeds. The buyer knows he has made a killing and plans to resell it at a great profit.

3/ The woman’s lawyer proves that the woman never owed any taxes, and the town agrees to buy back the house for the auction price and return it to her. But the buyer demands full market value, refuses to negotiate and proceeds to offer it for sale on his own. The lawyer plans further action, but warns that it will take a long time.

Drama and tragedy ensue. But here are the questions:

1/ Can a personal residence be seized for non-payment of *business * taxes (even if the woman had in fact owed them)?

2/ Can a jointly owned property be seized because of some infraction by one owner without any notice, let alone compensation, to the other owners(s)?

3/ If the original seizure was improper, did the town really own the house and have a right to sell it?

4/ If not, then does the buyer have the right to keep it and re-sell it?

Even if you accept the premise that the town had some authority to seize the house, I don’t understand how the buyer could keep the house after the error was revealed. Why couldn’t the town have simply told him “We made a mistake, we never owned this house, here’s the money you paid, you have to move”? (Of course if that had happened there would be no movie.) And while the matter was in dispute, wouldn’t that cloud the title? How could the buyer even hope to re-sell it?

I know that property can be seized for a variety of reasons, and there is always “eminent domain,” but is the process really as simple and as irrevocable as the movie makes it appear?

2

IANAREL but here’s my observations

Re time: I didn’t see the movie, but in the real world in Maryland WRT to local property taxes, there is a substantial period of time before a property with unpaid taxes is sold at auction. The delay time is great enough in some cases, that some professional Landlords wait until the very last minute to pay their taxes because the interest gained on the withheld monies makes it worthwhile. All during this time one or more warning notices will typically be delivered, warning of the impending sale if payment is not received. For a person to lose a property at auction due to a few hundred dollars being owed takes a near willful level of neglect.

Re business taxes- Different municipalities handle things differently. In most cases if taxes (of any kind) are owed to a municipality or county, they can put a lien against the real property of the debtor to pay these debts.

re # 3

I have no clue what the total scope of remedies are in that situation. I believe that Judges have the power to “unwind” real estate deals they deem to be abusive or fraudulent, so it’s quite likely she would have gotten her house back, and it’s quite unlikely he (the new owner) would have been to sell it with a lawsuit hanging over the deal. Legal remedies do take time to get processed, esp. if a contending side is fighting the aforesaid remedy.

3

In Washington State, if a property is sold at auction, the person who lost the property has two years to pay the back taxes and get the property back. Anyone buying a seized property knows not to put any real money into it until he/she has a clear hold on the property.

In a case like “The House of Sand and Fog”, I imagine that she could recover the property without paying any costs, since the original seizure was improper.