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Question: I got a notice in the mail that says, “Final Bill and Legal Notice.” Does that mean I could lose my house is going to tax sale this May?
Answer: First, the good news. Although the Baltimore City tax sale is scheduled for May 17, 2021, that does not mean you will lose your house on that date. The tax sale process is incredibly confusing and difficult to navigate. With tax sale approaching next month, it’s important to know the facts about tax sale.
How Tax Sale Works— Real property tax bills are issued on July 1 each year. Failure to pay in full or failure to make the first semiannual payment by September 30 will result in the account being considered delinquent. If the balance is left unpaid past December 31, the balance is subject to accrued interest, penalties and tax sale. In Baltimore City, a Final Bill and Legal Notice is mailed in both February and April, notifying the property owner that their house is on the tax sale list.
This is the notice that you received. It is important to pay attention and respond to this notice. If a homeowner fails to respond, the property will be advertised to be sold at the annual tax sale in May. In Baltimore City, April 30 is the last day that the City will accept payments to avoid tax sale. In order to get off the tax sale list, you must get the amount you owe on property taxes and city citations (like housing code violations) below $750 by April 30.
When the tax sale happens in May, it is not the actual property that is sold, but something called a “lien.” The lien is a debt, which is attached to the house. At tax sale, the lien can be sold to a buyer or investor. If this happens, there is a period of months where the homeowner is still able to pay to keep their house from being foreclosed; this is called “redemption” or “redeeming the property.” The time limit is different for properties that are owner occupied or non-owner occupied, and this can get tricky in Baltimore City because a lot of properties are misclassified as non-owner occupied.
Properties that are owner occupied have nine months to redeem, while non-owner occupied properties may have as little as six months, and vacant properties sometimes have even less time.
Redemption and the Foreclosure Process— Time is of the essence and the process can be challenging. The longer the homeowner waits to redeem the property, the more expensive the redemption amount becomes because attorney’s fees and other charges get added on. In order to foreclose, the buyer or investor has to file a foreclosure action in court. At this point, the homeowner has to make payments to two different parties to keep their home. They need to pay the investor whatever attorney’s fees and other fees they owe.
It is highly recommended to get a written receipt. They need to take this receipt to the City and then pay the City the lien amount. Again, it is strongly encouraged to get a written receipt. Property owners can redeem their house anytime up until a foreclosure judgment is entered by the Court.
Homeowners 70 or Older— Homeowners may qualify for the homeowners’ property tax credit. If they qualify, this credit is available retroactively for homeowners 70 or older. There are programs that can help older adults apply for this credit, such as the SOAR Program at the Maryland Consumer Rights Coalition.
Tax sale is confusing and expensive. It is important to know your options and rights, and to act now. Margaret Henn is the Director of Program Management at the Maryland Volunteer Lawyers Service (MVLS). MVLS focuses on housing, consumer, family, estate, tax, and criminal record relief issues for Marylanders facing financial hardships. MVLS assists with tax sale cases and can be reached at www.mvlslaw.org or 410-547-6537 Mondays-Thursdays between 9am and 12pm.
Those facing tax sale can also reach out to the Pro Bono Resource Center at 443-703-3052 to attend a Tax Sale Prevention Clinic.
Do you have a question you would like to see addressed in this column? Email [email protected] to submit your question to the Baltimore Times’ legal tip column.