DEAR SUN SPOTS: Recently there have been items in the news where local towns are selling off tax-acquired properties for nonpayment. Is this legal? What is the town selling?

It seems to me that without a warranty deed that they aren’t conveying title to the land and/or buildings at all. They are just “quitting claim” to the property, as the deeds say.

Most people that I have talked to think they are actually buying the property. I know of one case where after the taxes were paid off, it was found that there were liens on the property worth several thousand dollars more than it was worth.

So what is the person really getting for the purchase price? — No Name via email

ANSWER: For an answer to your question, Sun Spots turned to Pamela LaBelle, treasury manager and tax collector for the city of Lewiston. Pamela sent Sun Spots a copy of the rules by which the city operates, including this explanation of the state law that allows a municipality to “sell” a property after a tax or sewer debt results in a lien on the property. After it “matures,” the city can begin this process:

“Under state law, the city becomes the owner of a property at the point where a lien matures. The city does not, however, become liable for the property until 60 days after the city becomes aware that the property has been abandoned or upon asserting possession of the property, an action which indicates that the city will no longer consider allowing the prior owner to redeem the property.

“The city will consider taking possession of properties with matured tax or sewer liens under the following circumstances.

1. Vacant and blighted

2. Nonconforming structures

3. Vacant land

4. Owner-occupied residences: As a general guideline, it is not the city’s intent to take possession of owner occupied single-family residences unless continued occupancy of the residences poses a direct and immediate threat to the health, safety and welfare of the residents or those of neighboring properties or the city determines that the owner/resident is capable of meeting his or her obligations to the city but refuses to do so.

5. Other circumstances. The city may take possession of properties on which liens have matured under other circumstances not listed above, regardless of the condition of the property, when it is determined that doing so is in the best interests of the city and its residents. Ownership of the property is required for construction or maintenance of necessary public facilities such as roads, utility facilities, parks, recreational trails, schools, or public buildings.”

The second part of your question is a bit trickier. There are obvious limits to a municipality’s interest in such properties — primarily, to recover lost revenue. So they are usually sold under a quitclaim rather than a warranty deed.

Wikipedia explains a quitclaim deed:

“In some jurisdictions, quitclaim deeds may also be used in tax deed sales (in those cases, the term ‘tax deed’ or ‘sheriff’s deed’ may be used to describe the actual document), where a property is sold in a public auction to recover the original homeowner’s outstanding tax debt. The auctioning body is usually the local government, which claims no interest to the property whatsoever, but is selling only to recover the unpaid taxes without extending any warranty for the property title. The purchaser then may need to initiate a ‘quiet title action’ to remove any clouds to the title.”

Wikipedia also explained quiet title action:

“An action to quiet title is a lawsuit brought in a court having jurisdiction over property disputes, in order to establish a party’s title to real property, or personal property having a title, of against anyone and everyone, and thus ‘quiet’ any challenges or claims to the title.

“This legal action is ‘brought to remove a cloud on the title’ so that plaintiff and those in privity with him may forever be free of claims against the property. The action to quiet title resembles other forms of ‘preventive adjudication,’ such as the declaratory judgment.”

So No Name appears to be right. A lien could show up later. A purchaser is simply “buying” the municipality’s lien. Hopefully anyone who makes such a purchase is aware of the risk and can afford to take that chance — one more example of the need for professional advice when entering a real estate transaction.

This column is for you, our readers. It is for your questions and comments. There are only two rules: You must write to the column and sign your name (we won’t use it if you ask us not to). Please include your phone number. Letters will not be returned or answered by mail, and telephone calls will not be accepted. Your letters will appear as quickly as space allows. Address them to Sun Spots, P.O. Box 4400, Lewiston, ME 04243-4400. Inquiries can also be emailed to sunspots@sunjournal.com.

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