Investors, business owners and entrepreneurs may be able to find a new store front, commercial lot, warehouse or manufacturing facility for only the cost of taxes. Earlier this week 29 properties were put up for auction in Springfield including 11 residences, 15 residential lots and three commercial lots. City governments often hold auctions for properties that have become city owned due to non-payment of taxes. They are called tax-title accounts.
When a property owner fails to pay taxes, the city will send numerous notifications and other communications to all persons who may have a vested interest in the property including the owners, lien holders and mortgage lenders. If no one responds or answers the tax notices, the city foreclosures on the tax title and the property is managed and dispersed by the municipality.
In Worcester, the Treasurer & Collector of Taxes periodically holds auctions for properties that are either: in tax foreclosure, are subject to a tax collector’s deed, or being offered in a tax lien assignment sale. The last public auction took place in April of last year and currently there are not any scheduled for 2012. Properties often go for mere hundreds after covering back taxes for the last fiscal year.
While there are several matters to take into account when exploring tax-title possession of property including land use permits and zoning issues, tax-title auctions are a win-win for local governments and citizens alike. Eyesores get cleaned up, a neighborhood’s property value goes up, business owners get property for a steal and the city can start collecting taxes on the property once again.
Source: wwlp.com, “29 properties sold in Springfield’s first municipal real estate auction,” Yoojin Cho, March 27, 2012