Town sells two tax-delinquent properties at auction

Wednesday, October 17, 2018   (0 Comments)
Posted by: Carly Cahur
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BENNINGTON — After neglect, two single-family homes have a new lease on life.

The town auctioned off two homes, one at 937 Gage St. and the other at 816 Main St., to new owners in September, to encourage development and get back the delinquent taxes associated with the homes.

"The property gets improved, and we have a continuous flow of taxes," said Stuart Hurd, town manager, describing the benefits of such sales. "We're not carrying the delinquency on that particular property any longer." 

The Gage Street property has an assessed value of $127,900; it sold for $28,600. The Main Street property, assessed at $172,000, sold for $37,401, according to property transfer records. Both homes need "a lot of work," Hurd said.

A sole owner, Roy Richard, purchased the Gage Street home; the Main Street property was purchased by Hawkeye Property LLC.

The town sold the homes after the owners had not paid property tax for a long time, Hurd said. That is typically at least two tax years in a tax sale process in Bennington.

A tax sale is an involved process that requires a 30-day notice to the property owner, Hurd said. Creditors also must be notified and given the opportunity to correct the deficiencies, as most people's mortgages require that they be current on taxes, he said. After that, the town will place a bid on the property — the amount owed in taxes and applicable legal fees.

If the town places a bid, it doesn't own the property until the one-year redemption period has passed without the owner of the property paying the tax or making arrangements to do so. After that, the property becomes town-owned, and the town bids the property out at a public auction. 

The ultimate goal is to sell the property, Hurd said. "We look for the minimum bid, and that's all we get," he said, referring to the amount the town bids. There could be two or three bids on a particular property through the public auction process, Hurd said. 

The high bidder is generally awarded the property. Any money paid in excess of tax liability and legal fees is returned to the former property owner, he said.

"It's not a decision that's automatic," he said of the decision to take possession of a property. "We give people every opportunity to get back on track. Because we're not interested in taking someone's home. We only do it because we suspect that the delinquency will be long, and not ever satisfied."

Hurd said he believes the new owners of both homes plan to renovate them and rent them out. "We always hear there's a housing crisis," he said. "We don't have enough housing."

But with a tax sale, these buildings have the opportunity to be put to good use, when they've often been poorly maintained or abandoned.

"It's better to take that property at sale and get it back into a responsible owner's hands," he said. "It's a way to make sure, one, that the taxpayers of the community are not carrying these delinquencies for long periods of time."

Tax sales also represent an opportunity for people interested in securing properties at less than market value, he said. 

In any given year, the town might have five or six properties that go to the tax sale process.

As town manager, Hurd is the delinquent tax collector for the town. He works with staff every year to come up with a list of properties that should go to sale, because there's been no attempt to stay current on taxes or work out a plan to pay them, or the property has been abandoned.

"Some years, people bid on the properties," he said. "Some years, they don't."

In years where no one bids on the properties, they would probably go back on the sale list for the following year, he said.

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