The way I heard it works is that they put the property up for auction, and the buyer pays the final bid plus the cost of any liens, including liens for back taxes. Of course, any mortgage would complicate that.
I assume the house is sold at auction, which allows the several people to compete for it.
In Illinois (and I think this is a pretty unique system), unpaid property taxes are put up for auction. Potential buyers bid a percentage rate up to 18%. The lowest percentage rate wins the auction.
The winning bidder has to pay the unpaid tax (including interest and penalties). The bidder then gets a tax lien certificate on the property. A residential property owner then has 2.5 years to buy the tax lien certificate from the bidder. Every 6 months, the cost of redeeming the certificate goes up by the percentage rate that the winning bidder bid. So, if the winning bid was 12%, the cost of the redeeming the certificate goes up by 12% every 6 months. Also various fees and costs are added.
If taxes are not paid during the redemption period, the winning bidder has first right to pay them and then add them to the price of the tax lien certificate and the percentage rate will also apply to the additional taxes.
If at the end of the redemption period the property owner does not buy the tax lien certificate from the bidder, the bidder can go to court to get a tax deed for the property and become the owner of the property.
In Toronto, certain heritage properties are protected by law from being torn down unless they’re in really bad shape. So sometimes you get the situation where the property owner deliberately lets the building rot so that they can eventually build something more lucrative on the site. (In that case, the property taxes are presumably still being paid, though.)
E.g. Annex residents allege heritage home is being intentionally left to rot
I had a similar situation. The house sat empty for a year or so. Then the teens and crackheads started partying there. One of them got careless with a candle and the place burned. Then the burned out shell sat with police tape across the door for a couple more years. Finally a guy up the block who owns several properties on this street couldn’t stand it any longer and bought the whole mess for a few thousand dollars. He then spent several times more than that having the house demolished and the lot landscaped. The take away point here is that neither the government nor the bank gave a wet shit about the place at any time in the proceedings.
Like you have done, contact the township - and keep on it. While you are at it, call law enforcement, and any other gov’t entities. Follow up the calls w/ e-mails/letters. Go into the civic center and ask who to speak with. Could be code enforcement, building department, ???
In some instances, tho, the official response is to require that the property be secured/boarded up - which some neighbors object to.
Eventually it will get sold. As a general matter, mortgage holders do not wish to be property owners. But the selling can be an EXTREMELY long process.
I did NJ real estate for 26 years.
Look up the property on the Toms River tax map and see who holds the lien (mortgage) on it, and if there is a lis pending for unpaid mortgage and/or taxes.
Usually with abandoned properties, the bank will accept a short sale, where they take all the proceeds from a sale and forgive the balance, rather than trying to find the homeowner and get the money from them (Good luck with that idea). Contractors ;ole to do this, with the City agreeing to give them a reasonable amount of time to bring the property up to code, with no fines lev ied.
Your first step is to contact the City’s Building Code Enforcements, as they will lock up the property and make sure nobody gets in there.
One more thought - you can call your congresscritter. They have a staff to perform constituent services. You are paying for them, might as well have them work for you.
I did this 30+ years ago re: an empty home across the street from me. The Rep’s staff seemed to really get on it. The ONLY positive thing I’ll say about that bastard Henry Hyde!
Your local paper (if you still have one) is always looking for stories. Are there a number of other abandoned properties in town? Might an enterprising (or desperate) reporter be interested in writing about the town’s plight, perhaps with a few photos?
This sounds like a really bad idea. You’re essentially paying money for a property now. But you have to wait over two years before you can take ownership of the property. And during those two years, somebody else is occupying the property - somebody who now has no incentive to maintain the property.
Assuming the auction price is higher than the unpaid taxes, who gets the excess amount?
A LOT of people make A LOT of $ around these parts buying up tax delinquent properties. Somehow they are able to make the #s work for them.
My anecdotal experience looking for houses in NW IN around 2010 - it is AMAZING how quickly properties deteriorate when vacant and routine maintenance is deferred, or when residents know they will be evicted! :eek:
Probably what happens mostly is that they end up getting paid back and make interest. It makes financial sense for the owner of the property to pay $X in taxes rather than lose $XXXX in the value of the house. But then if they walk away, the person with the tax lien can put $X or $XX fixing up the house and sell it for $XXXX. The taxes will typically be just a small percentage of the home value. The home would have to be pretty well rotted before it’s worth less than the back taxes.
Paying taxes probably really only works on houses without a mortgage. If there is a mortgage, then typically the mortgage company is paying the taxes out of escrow. If the homeowner isn’t making payments, the mortgage company will have foreclosed on them. The delinquent taxes would not be a factor.
As a related aside, vacant properties are much more expensive to insure. They get broken into. They burn down. They’re a much bigger risk for the insurance company. If you’re the executor for an estate that includes a house and the insurance company finds out that the house is empty while it’s being shown for sale, they’ll cancel the homeowner policy immediately.
Reported.