TREASURER DEED UNIQUE EXCEPTIONS. Betty Diller, Archuleta County Treasurer

TREASURER DEED UNIQUE EXCEPTIONS Betty Diller, Archuleta County Treasurer

HANDOUTS Archuleta County Recommended Guidelines for Treasurer s Deed Management Topics

FEDERAL LIENS 1 st decision What do I do when I discover a federal tax lien (FTL) in the title research? 2 nd decision How do I comply with a subsequently recorded FTL?

FEDERAL LIENS We are given our authority and responsibility by the State of Colorado. We are not required to give notice under federal law. We are required to give notice under Colorado law.

FEDERAL LIENS Colorado Law 39-11-128(a) Send notice to: Owner Occupant Person who was taxed or specially assessed All persons having an interest or title to record

FEDERAL LIENS Colorado Law 39-11-128(a) Notice includes: When the applicant or assignor purchased the lien In whose name the property was taxed A description of the property For what year the property was taxed or specially assessed When the redemption period will expire or the deed will be executed

FEDERAL LIENS Form 14497 Notice of Nonjudicial Sale of Property Attach a copy of the federal tax lien or write in taxpayer s information Real property legal description or copy of the deed or abstract Amount of principal obligation Interest owed to seller Known expense amounts

FEDERAL LIENS Form 14497 Notice of Nonjudicial Sale of Property Attach a copy of the lien or write in taxpayer s information Real property legal description or copy of the deed or abstract Amount of principal obligation Interest owed to seller Known expense amounts Must notice on any FTLs recorded at least 30 days prior to deed execution.

FEDERAL LIENS Use address on lien from title work Send to current address for the Internal Revenue Service Collection Advisory Group Collection Advisory Group Manager Internal Revenue Service 1999 Broadway, MS 5021DEN Denver, CO 80202-2490

FEDERAL LIENS Our notice does not suffice. The date of sale for IRS FTL lien divestiture = signing of the treasurer deed. If deed execution is delayed, the requirement for submission becomes a moving target.

FEDERAL LIENS Because: 1. we are not required to give notice, 2. the federal laws and regulations are complex, and 3. there is potential for error if we do become involved,

FEDERAL LIENS CCTA legal counsel recommends that the treasurer does not become involved in the notice process with respect to divestiture of IRS FTLs under federal law. He further recommends that we give notice to treasurer s deed applicants about steps we do not take with regard to federal redemption rights.

FEDERAL LIENS The IRS has redemptive rights under federal law and Colorado law. If the FTL is divested because of proper notice, the IRS will have 120 days after the date of the deed execution to redeem the property under federal law. The person required to accept redemption under federal law must be designated to do so. The treasurer is not so designated but also is not specifically excluded, as is the public trustee.

FEDERAL LIENS The treasurer is required to accept redemption by the IRS under Colorado law. Before the deed is executed Completion of Affidavit of Redemption Pay with certified funds or cash

BANKRUPTCY Bankruptcy Filing Mailings Publications Rights of Redemption

BANKRUPTCY FILING All activity leading up to a treasurer deed stops until: Relief from stay granted Bankruptcy dismissed or closed Property abandoned Except

BANKRUPTCY FILING Orders may be effective 14 days after being entered. Read the order carefully.

BANKRUPTCY MAILINGS First Mailing CRS 39-11-128(1)(a) Notice within a 3- to 5-month window Length of stay pushes deed execution date past the window = Send again.

BANKRUPTCY PUBLICATIONS CRS 39-11-128(1)(b) publish three times, at intervals of one week... before the time at which the tax deed may issue... Publication is finished = Do not publish again. Final publication on day of bankruptcy filing = Republish.

BANKRUPTCY MAILINGS Second Mailing CRS 39-11-128(1)(b) Appears after the term may = Send again if outside the window.

BANKRUPTCY RIGHTS OF REDEMPTION CRS 39-12-103(1) lists parties who have the right to redeem. One of them files bankruptcy. That person gets 60 days from the filing or the period allowed under state law in which to redeem property. This delays deed execution. CRS 39-12-103(3) allows redemption until deed is executed. Yea! Everyone gets the same extension, if any. How do we know when a party of interest files bankruptcy and qualifies for this extension? They tell us.

BANKRUPTCY RIGHTS OF REDEMPTION Federal Tax Liens The notice must include any FTL recorded at least 30 days prior to the deed execution date. We have a moving target.

NEEDED LAW CHANGES PARTIAL REDEMPTIONS C.R.S. 39-12-103(2) An undivided interest may be redeemed upon payment of a ratable share of the sum required to redeem the whole even though a tax lien for the whole has been sold. In case a tax lien on any tract of land sold for delinquent taxes under the provisions of article 11 of this title belongs to two or more separate and distinct parties in severalty, the treasurer, when satisfied of the fact and upon application of any one of the parties or his agent, assignee, or attorney and upon payment of the proper proportional amount, shall issue a certificate of redemption for such party's interest in said land. C.R.S. 39-12-113(1) Any person who has or claims an interest in or a lien upon all or any part of any undivided or divided estate or interest in any piece or parcel of land or lot for which a tax lien was sold pursuant to article 11 of this title may redeem such undivided or divided estate or interest by paying to the treasurer his proportionate part of the amount required to redeem the whole. In such case the treasurer shall issue to such party a certificate of redemption for his interest in such land or lot, as provided by law.

NEEDED LAW CHANGES THIRD PARTY VENDORS 39-11-130. Fees included in redemption money In case the treasurer is compelled to serve or to publish such notices in a newspaper, then before any person who may have a right to redeem such land or lot from such tax sale is permitted to redeem, he shall pay the officer or person who by law is authorized to receive such redemption money the entire amount paid by the applicant for a tax deed for such notices, for abstract and search fees, and for the cost of publishing such notices for the use of the person compelled to pay such charges. If the property therein described is redeemed before the expiration of the period of redemption named in such notice, the purchaser or his assigns shall recover, in addition to his interest and costs, the cost of such publication and the abstract and search fee.

NEEDED LAW CHANGES THIRD PARTY VENDORS 38-37-104. Duties of public trustees - fees, expenses, and salaries reports (1) The public trustees of each county of this state shall perform the functions and exercise the powers conferred upon them by statute. They shall be entitled to receive as fees for such services the following sums and no other fees or perquisites: (X) The sum of all amounts paid by the public trustee to third parties in connection with processing a foreclosure, including all recording, filing, publication, and electronic transmission fees; except that,

NEEDED LAW CHANGES LANGUAGE FOR TRANSFER LIENS Keep it simple.

NEEDED LAW CHANGES BANKRUPTCY Make the repetition of mailings contingent upon the possible deed date rather than the actual deed date.

NEEDED LAW CHANGES TREASURER DEPUTY 38-37-103. Deputy trustee - successor in office Each public trustee may appoint deputies who shall have the same power in all respects as the public trustee. All acts of a deputy public trustee shall have the same effect as though performed by the public trustee. If a public trustee dies, resigns, or is removed from office, or if a public trustee's term of office expires after selling any property under the term of a deed of trust and before executing a certificate of redemption or deed for the property, the public trustee's successor in office shall execute the certificate or deed in the same manner that the public trustee making such sale might have done.

NEEDED LAW CHANGES TREASURER DEPUTY 30-10-704. Deputy treasurer duties The county treasurer may appoint a deputy, who in the absence of the treasurer from his office, or in case of vacancy in said office, for any disability of the treasurer to perform the duties of his office, may perform all the duties of the office of treasurer, until such vacancy is filled or such disability removed.

NEEDED LAW CHANGES TREASURER NOT DESIGNATED CRS 38-38-302(9) The officer conducting a foreclosure under this article is not designated to receive redemptions under federal law.

NEEDED LAW CHANGES FEES We need to bring fees for tax lien foreclosures to a level at least comparable to that of a public trustee, even though the responsibilities are greater for the official administering the tax lien foreclosure.

RESPONSIBILITIES AND FEES Activity Public Trustee Fee Treasurer Fee

RESPONSIBILITIES AND FEES Check for Bankruptcy before Opening Attorney $$$ Treasurer Zero Activity Open File Public Trustee Fee Treasurer Fee

RESPONSIBILITIES AND FEES Check for Bankruptcy before Opening Attorney $$$ Treasurer Zero Activity Open File Public Trustee Fee $150 Treasurer Fee

RESPONSIBILITIES AND FEES Check for Bankruptcy before Opening Attorney $$$ Treasurer Zero Activity Open File Public Trustee Fee $150 Treasurer Fee $75

RESPONSIBILITIES AND FEES Check for Bankruptcy before Opening Attorney $$$ Treasurer Zero Activity Open File Public Trustee Fee $150 Treasurer Fee $75 Create Commencing Document

RESPONSIBILITIES AND FEES Check for Bankruptcy before Opening Attorney $$$ Treasurer Zero Activity Open File Public Trustee Fee $150 Treasurer Fee $75 Create Commencing Document Attorney

RESPONSIBILITIES AND FEES Check for Bankruptcy before Opening Attorney $$$ Treasurer Zero Activity Open File Public Trustee Fee $150 Treasurer Fee $75 Create Commencing Document Attorney $$$

RESPONSIBILITIES AND FEES Check for Bankruptcy before Opening Attorney $$$ Treasurer Zero Activity Open File Public Trustee Fee $150 Treasurer Fee $75 Create Commencing Document Attorney $$$ Treasurer Zilch Create Mailing List Attorney $$$ Treasurer Nil Track and Modify Mailing List Attorney $$$ Treasurer Nada Issue Deed Public Trustee $35 Treasurer Not a Thing Subtotal $185 $75

REDEMPTION BY PERSON UNDER DISABILITY CRS 13-81-101. Definitions. (3) "Person under disability" means any person who is a minor under eighteen years of age, a mental incompetent, or a person under other legal disability and who does not have a legal guardian. CRS 38-41-112. Legal disability extension of two years. Persons under legal disability at the time the right of action first accrued who, at the time of the expiration of the limitation applicable, are still under such disability shall have two years from the expiration of a limitation to commence action, and no action shall be maintained by such persons thereafter.

REDEMPTION BY PERSON UNDER DISABILITY General Information Owner has a maximum of two additional years in which to redeem. The owner has the shorter of two years from removal of the disability or nine years from the date of deed execution. All redemptions in this section shall be made within the nine years. What is the document that shows legal disability? Under 18 years of age Mentally incompetent Other legal disability and does not have a guardian

REDEMPTION BY PERSON UNDER DISABILITY Components of Redemption Payment 1. Attributable to the issuance of the tax deed Principal of the tax lien sold Subsequent years Deed cost Recording fee of the deed Redemption interest: 15% per annum from date of tax lien sale

REDEMPTION BY PERSON UNDER DISABILITY Components of Redemption Payment 2. All other outstanding taxes, costs, and charges levied after the issuance of the tax deed which are due at the time of redemption.

REDEMPTION BY PERSON UNDER DISABILITY Components of Redemption Payment 3. Improvements Present value Appraised by 3 disinterested persons appointed by Board of County Commissioners

REDEMPTION BY PERSON UNDER DISABILITY Result Treasury gives a certificate of redemption. Recording certificate of redemption will void the deed. Recording will signal to the assessor to change ownership.

REDEMPTION BY PERSON UNDER DISABILITY Scenario The owner or the tax lien holder to whom the deed was issued does not pay taxes or charges for subsequent years levied after the deed issuance: We may take these subsequent years to tax sale. This tax lien holder for subsequent years may apply for a deed and a Treasurer s deed may be issued to them while the owner is still under 9 year redemption period from the 1st deed but they remain subject to the 9 year redemption period by the person under a legal disability, or such shortened period if the disability is removed or ceases. The issuance of a new tax deed (2 st deed) extinguishes the old tax deed (1 st deed). Even though 2 nd deed is issued, the person who was still under a legal disability still has the full 9 years to redeem the 1 st deed, or such shortened period if the disability is removed or ceases. In other words, if redemption is made within the 9 years or such shortened period when the person is still under a legal disability for the 1 st deed, the person with the legal disability may have 9 years or such shortened period to redeem the 2 nd deed, too.

SPLIT OR COMBINED PARCELS A > B A = B + C + D A + B = C A + B = C + D + E + F + G

ERRONEOUS LIENS 39-12-111. Land wrongfully sold repayment. (1) When, by mistake or error of the treasurer, county clerk and recorder, or assessor or from double assessment, a tax lien has been sold on land upon which no tax was due at the time, the county shall reimburse the purchaser in the amount paid by him in connection with the purchase of the tax lien on such land, together with interest from the date of purchase at the rate which is determined as provided in this section. Reimbursement shall be made from the various funds to which the tax was originally distributed; except that interest shall be paid from the county general fund. The treasurer, county clerk and recorder, or assessor, as the case may be, and his sureties on his official bond shall be liable to the county for such amounts reimbursed as a result of sales made only through willful misconduct.

ERRONEOUS LIENS (2) (a) The annual rate of interest shall be two percentage points above the discount rate, which discount rate shall be the rate of interest a commercial bank pays to the federal reserve bank of Kansas City using a government bond or other eligible paper as security, and shall be rounded to the nearest full percent. (b) Notwithstanding any other provision of this subsection (2), the rate of interest shall be no lower than eight percent per annum compounded annually.

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