Tuesday’s delinquent tax sale of properties inside the Morristown city limits – the first ever conducted with online bidding – brought in $115,000 in previously uncollected tax on sales of $358,000, officials say.
After a 90-day redemption period – three months in which the tax debtors can reclaim their property by settling their tax debt – the vast majority of sales will become final, according to Morristown City Attorney Lauren Carroll, who says the redemption period is longer for properties that haven’t been on the delinquent-tax list for as long.
Probably more important than the properties that did sell, however, are the 23 that didn’t. The development that will force a near-term decision by Morristown City Council members to solve a problem that appears to be an unintended consequence of a policy adopted to compel homeowners to cut their grass.
When grass reaches 12 inches in height, the city sends out a violation notice, which gives the property owner 13 days to mow. If nothing happens, the city’s contract mower provides an estimate and cuts the grass.
Here’s the rub.
City government bills the property owner at a rate of $250 an hour and places a lien on the property for that amount, according to Nick Greene, a codes enforcement officer. What on the front end is a high incentive to cut grass, amounts to a huge obstacle on the backside to disposing of the properties and getting them back on the tax rolls.
Because mowing overgrown lots, which could include all manner of foreign objects, is more difficult and puts more wear and tear on equipment, the contractor receives an hourly pay rate above market value.
After months or years of $250-an-hour mowing, the property-maintenance lien, which could also include boarding of broken windows or demolition, the lien could exceed the value of the property, and that’s what’s happened with most or all of the 23 properties that didn’t sell on Tuesday.
Two options exist for disposing of the properties.
One is for city government to schedule another tax sale and purchase the unsellable properties. City government would then improve the properties to the point someone would buy them, according to Joey Barnard, assistant city administrator. He says the other option is cutting or eliminating the property-maintenance liens, cut the city’s losses and take what can be obtained.
City officials knew that some of the properties would not sell. They used the tax sale create a definitive list of troubled properties.
There was another unique feature of Tuesday’s tax sale. It was the first that was open to online bidding, but it won’t be the last, according to Hamblen County Clerk and Master Kathy Jones-Terry.
Jones-Terry said this morning that two of the properties sold to someone in New York. The bidders also included people from Bean Station, Mooresburg and Dandridge, people who very likely would not have shown up in person. She says it’s clear that online bidding expanded the universe of bidders, and all future sales will be online affairs.
A company called GovEase provided the service this time free of charge. In the next tax sale, Bid4Assets will give county government a free look-see, and officials will award future sale contracts to one company or the other.
Once county government starts paying for the service, the online sale company will charge something akin to a buyer’s premium, a fee paid by the winning bidder, to offset the cost of the tax sales.