Annual delinquent tax land sale offers real estate possibilities

The last Monday in August is a day real estate investors and speculators look forward to each year.

That’s when Union County holds its annual delinquent tax land sale.

If a parcel of property had not had tax paid by the February deadline, or later paid plus penalty interest, the county will auction that property off to recover the lost tax revenue.

It can be a way for a third party to purchase land at a low price, but the process is not as simple as it might seem. For one thing, the land is not really yours for three years and the owner still has a last opportunity to recover it.

For many years a traditional sort of round-robin in-person auction was used but not everybody had the opportunity to bid on any parcel. It was hit and miss as to which parcel each person might bid on.

Four years ago the tax assessor-collector switched to an on-line auction that is fair to everyone.

Everyone can bid on every parcel. Bids can be placed remotely and conditional bids, with increases and limits, can be programmed as well.

While this process is more democratic, it also gives an advantage to large companies that essentially place bids on every parcel, assuming they will win at least some.

This may shut out some local buyers but it also brings more revenue into the county, Tax Assessor-Collector Tameri Dunnam said.

That auction will begin on Monday, Aug. 30, at 8:30 a.m. CST and will continue each subsequent day until all parcels have been offered for sale. The sale has taken about a day and a half in the past.

The auction will again be hosted at http://auctions.govease.com.

Although the auction will be on-line, bidders still must arrange for payment and verify registration with the tax assessor’s office ahead of time. Dunnam said her office will need a blank check, letter of credit and W-9 tax form from each bidder.

Online registration can be done now, only takes a few minutes, and registering does not mean anyone is obligated to bid.

“Everyone needs to check with me to make sure all the paperwork is done,” she said.

Because not everyone in the county has good internet access, in the past the tax office had a limited number of computers available for use in the courthouse and free wifi is available for public use at the Union County Library.

Dunnam encourages anyone with questions to call the GovEase support line at 769-208-5050, or call her office at 662-534-1973 concerning the sale itself. She also highly recommends viewing the tutorials on the website.

Although one may purchase land for a small delinquent tax amount, as noted there is a catch.

First, Dunnam said that landowners will still have an opportunity to redeem their property at the last minute before the sale, but it needs to be done soon. They would have to pay the five percent interest penalty as well as a $1.50 printer fee per parcel.

Also, a property owner has two more years in which to redeem the property by paying the tax that was owed plus related costs plus seven percent damages plus one and one-half percent interest per month on what is owed. And even then the purchaser may still sell the land back to the original owner for a profit.

So, at worst, someone buying property at the sale would still make some profit even if he or she did not keep the land. While some are actually interested in obtaining specific pieces of property, many people buy parcels on the assumption that the original owner will eventually redeem the property and provide the sale purchaser with a much higher interest return than he or she could get at a bank.

Each year the public listing of delinquent taxes may take up 10 large pages in small print but being listed doesn’t mean that much on its own.

If you see someone’s property listed with X amount of tax due, you can’t just walk into the tax assessor’s office, plunk down the money and purchase that property.

Also, seeing a name listed does not mean one should draw any negative conclusions. True, some people may not have the money at the time to pay the tax because of any number of reasons, but others purposely delay payment for some financial advantage, preferring to pay a penalty later to free up cash now.

Initial tax notices go out about the first of December each year with a second notice the first of January. Unpaid taxes become delinquent Feb. 1 so property owners have almost six months to pay.

The county is required to try to get in touch with the property owner in several ways so he or she has more than adequate notice of the impending publication and sale.

The sale itself is always on the last Monday in August.

The tax assessor-collector’s office is responsible for dealing with delinquent taxes right up to the moment of sale. After that, any efforts toward redemption have to go through the chancery clerk’s office.