Pittsfield Auctions Off 54 Tax Liens for $667,000
.JPG) The city held an auction Tuesday afternoon for tax title liens. |
The effort culminated with $667,000 being sold at auction Tuesday afternoon. Since February when the auction was announced, some $1.2 million in back taxes were paid by the property owners, according to Director of Finance and Administration Susan Carmel.
"It was a very successful day," Carmel said Tuesday night.
Strategic Auction Alliance was hired to perform the auction. The city took a new tactic this year by selling the liens — or the debt — itself rather than taking the properties.
While that triggered many owners to pay what they owe, it also led to Tuesday's auction in which seven bidders bought the debt and the rights to collect for 54 properties.
Tallase Adams Lincoln LLC. from Boston led the charge with the purchase of 46 liens totaling $486,513.
"We will be planning to do it again anywhere from six months to a year from now," Carmel said.
The city was owed about $10 million in back taxes and between the owners paying their debt and the auction, almost $2 million of that was recouped. Carmel said that is about how much the auctioneers expected.
Private companies and individuals had the right to bid on the liens. The bidders had to put $15,000 down to be considered a serious bidder, Carmel said. Now, those successful bidders will pay the city what the winning bid was, which ranged depending on the amount owed and the property, and then they own the debt.
The property owners now have to pay those back taxes to the winning bidder instead of the city. The new owners of that debt also have the right to foreclose on the properties should they want.
In the past, the city had gone through the typical tax taking process. In that system, the city takes the property from the owner and then auctions it off or keeps it for another use. The winning bidder of any property auction is then responsible for the back taxes. That system is a much lengthier process for the city to recoup and taxes.
This year, Pittsfield followed in the footsteps of places like Worcester and Springfield to sell the debt instead. The process was crafted into law in 2004 and some communities have found it successful.
Not all of the properties on the auction block were sold, however, so the city will still need to go through the tax title process to take ownership of those lands.
Tags: tax auction, tax taking,
