Enforcement of Tax Liens

This year, one subject that raised a lot of questions related to title to real estate acquired by the foreclosure process for failure to pay real estate taxes and the sales of those properties. Although the process is laid out very clearly in the statute, Title 36, particularly §§ 942 and 943, it has proven challenging for tax assessors to always get things right. The Law Court has been very clear that if there is even a minor error in the tax foreclosure process, it will be declared to be void if challenged by the taxpayer.

One of the particular areas of concern is the requirement under Title 36, Section 943 (the so-called 30-day notice), which must be served to complete the foreclosure process. A common mistake that is made is that the notice is simply sent to the address of the property itself, rather than to the owner’s usual place of abode, or last known address. Another problem we have seen is that when a town isn’t careful, it assesses property to one property owner when there are multiple property owners, including husbands and wives. A notice of foreclosure only sent to one property owner may not be effective against the property as a whole, and, at a minimum, will not be effective against the interests of the property owner who was not notified. Even when it is clear that the process was handled properly, towns often choose to file a quiet title action to ensure that they have good title to property before attempting to re-sell it. The title standards of the bar generally require a ten-year waiting period for titles to be considered clear. There is no impediment to the town selling the property once it obtains title through the foreclosure process, even if title has not been declared by a court. It is critical that the assessor carefully follows the exact process laid out in Title 36, §§ 942 and 943, for the municipality to properly acquire title to property acquired because of tax delinquency.