Thursday, February 21, 2013

Senator acts for real estate industry on tax foreclosure sales

Posted By on Thu, Feb 21, 2013 at 9:38 AM

I credit Sen. Jonathan Dismang for candor in announcing he had a financial relationship to a couple of bills he pushed through committee yesterday.

Dismang is sponsoring two bills to make it easier to buy tax-delinquent land — SB 297 and SB 300. The first bill eliminates a post-tax sale notice requirement for owners of land that has been sold for delinquent taxes. The second bill allows purchasers of such land to recoup money spent on improvements before a redemption by a property owner.

The legislation would negate parts of a 2007 law. I've heard from critics who question his proposal's constitutionality. The U.S. Supreme Court ruled in 2006 in an Arkansas case that an undelivered mail notice of a tax sale was not sufficient due process and ordered the state to take "additional reasonable steps to attempt to provide notice to property owner before selling property." The Supreme Court also said that "before forcing citizen to satisfy debt by forfeiting his property, due process requires government to provide adequate notice of impending taking."

Dismang said he does accounting work for a company that buys such properties. But he said the real driving force behind the bills were realtors. He tells me the bill actually might harm his client by creating competition for tax delinquent parcels, given the greater potential finality at a sale.

He contends the elimination of post-sale notice doesn't infringe on due process because there's a four-year process with many notices that leads up to a sale. And a sale done improperly as to procedure can still be contested. He said the bill only encourages prompt tax payment by habitual delinquents who play a waiting game to see if their property will be sold at auction, then redeem it if necessary.

Maybe so. But it's still industry-friendly legislation that takes some measure of protection away from property owners. It is sponsored by an acknowledged friend and occasional employee of the industry. He says there's no financial benefit to him and his expertise gives him special understanding of the issue. It's still worth considering when evaluating the Republican Party's avowed belief in property rights. The question is: Whose property rights? See Jason Rapert's bill that appears to make it easier for pipeline companies to tromp on your acreage.

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