Tax liens advertised by the County are EXTREMELY dangerous investments

The COM paper just had a full page ad for people to buy tax liens.

Sadly, the County FAILS to warn investors about the RISKS of investing in delinquent property tax liens.

Tax DEEDS are definitely the way to go, but I couldn’t find a single property in Dolan or Meadview.

When it comes to tax liens, you might be better off throwing your money away — unless the law changed.

At least throwing your money away doesn’t involve WORK, STRESS and LAWSUITS.

I think it was 2010 when the AZ court of appeals DENIED the investor’s demand for the expenses related to foreclosing on the tax lien property.  The owner paid up AFTER the lawsuit was filed and the investor got NOTHING!

  • The investor couldn’t locate the owner and served by publication.
  • The owner PAID the delinquent taxes after the investor had filed the lawsuit and started with publication for service.
  • However, service is not effective until the notice was published for I believe 4 weeks.
  • The court DENIED the investor’s demand for reimbursement of the expenses because service was NOT effective yet [after THOUSANDS of dollars were wasted on lawyers, court costs and publication.]

MAYBE the law changed?

So here’s my email to Ms. Cox:

Dear Ms. Cox,

I read your article about the tax lien sale with great interest as I almost got suckered into this fraud several years ago.

Did the law change with respect to redemption?

If not, I think you really need to put up a GIANT notice, warning investors that they might lose THOUSANDS of dollars when they start to foreclose and the owner then pays the taxes.

Obviously, the law should state that the investor gets reimbursed for ALL expenses incurred prior to redemption and after filing of the foreclosure lawsuit — NOT after service of the owner is complete. After all, you can’t file the foreclosure suit AFTER you serve the owner!

Incredibly, the COUNTY has no problem charging all sorts of ridiculous fees WITHOUT having to serve the delinquent owners!

I’ll greatly appreciate your updating your marketing materials unless the law was changed and it is relatively safe to invest in liens again.  After all, you’re making a HUGE effort to entice the MOST UNSOPHISTICATED investors.

I appreciate your clarification of these legal issues related to foreclosing on tax liens,

Christine Baker

I’ll update with the response.

Here is  the COM ad:

COUNTY CORNER
By Cindy Landa Cox, Mohave County Treasurer

Thank you to our County Assessor, Jeanne Kentch, for last month’s article explaining her office’s utilization of Pictometry software for in-office visual assessments, as well as her efforts to put a Property Exemption Bill for Disabled Veter-ans before the legislature this year.

Delinquent property taxes have been and continue to be a serious issue in Mohave County. My office will be holding its annual Tax Lien Sale earlier than in prior years, and I’d like to take this opportunity to highlight some positive changes concerning this year’s sale. Effective October 15, 2018, the Board of Supervisors (BOS) approved changing the County’s authorized provider for Internet Tax Lien Auction Services to Realauction.com, utilizing a Cooperative Contract with Maricopa County. One benefit to Tax Lien investors is a reduction in the vendor assessed per parcel processing fee; this fee decreased from $10 to $5 per parcel under the new contract.

Unpaid real estate taxes on real property in Mohave County for the 2017 tax year (and prior years) was published beginning January 23, 2019 in The Standard. Investor registration and bidding for the annual Tax Lien Sale began the same day at www.mohave.arizonataxsale.com and continues through the close of the sale on February 8th.

There are several benefits to holding a tax lien sale. Allowing others to pay delinquent taxes through the auction process in exchange for a tax lien relieves all taxpayers countywide of having to make up the difference or suffer reduced services. Because of the competitive bidding process, the property owner often receives a reduced interest rate on delinquent taxes. Lastly, the bidder or investor can earn a higher than market return on investment with a small initial cost per parcel. As you can see, the annual tax lien sale benefits the county, its taxpayers, and investors. [emphasis added]

Last year, my office held a public workshop prior to the Tax Lien Sale. The workshop is archived and available on the County’s YouTube channel (www.youtube.com) for viewing. Although we have changed auction providers, the registra-tion and bidding processes are very similar to prior years. Frequently Asked Questions (FAQ) are available on the Treasurer’s Office website (www.mohavecounty.us) and a “Practice” demo at https://demo.arizonataxsale.com/index.cfm/ which is useful as a resource for questions regarding Realauction.com and how it provides Internet Tax Lien Auction Services.

Keep in mind that a Tax Lien Sale is simply offering at public sale the opportunity for someone else to pay delinquent property taxes on the owner’s behalf in exchange for a lien on the property. It is NOT an outright sale of property. If you are interested in purchasing property outright, a Tax Deed Sale is better suited to your needs. (BOS Tax Deed Sale held by the Clerk of the Board is set for April 8, 2019)

A Tax Deed Sale is the sale of real property by the BOS in the county to the highest bidder for cash. Last Spring, the BOS applied for Treasurer’s Tax Deeds on just over 800 parcels and approved $150,000 in funding to cover the costs of the Tax Deed process. I am proud to report that cost savings measures by my office allowed for deeding these parcels at just a fraction of initial cost estimates (spent approx. 8% or $11,500 of the funding). Even better, owners of 81 parcels chose to redeem (pay all taxes, fees and penalties owing) rather than lose their properties to foreclosure. As a result, over $86,000 was collected in delinquent tax revenue. Keep in mind this is before a single parcel has been presented to the public for sale. Tax deeding of these parcels resulted in administrative savings of several thousand dollars a year. Once all parcels are back on the active tax rolls the County should see additional tax revenue of approximately $70,000 a year.

Due to the fiscal success of this initiative in 2018, the BOS approved an additional 5,000+ parcels for Tax Deed Pro-cessing in 2019. Annual administrative savings upon completion of the 2019 tax deed process will be $15,000. These parcels will be offered at a future Tax Deed Sale resulting in additional tax revenue of approximately $200,000 annually.

Please look forward to next month’s article from the Mohave County Assessor, Jeanne Kentch.

Leave a Reply