Baltimore’s tax sale is a controversial process that adds approximately $20 million to the city’s revenue each year. To remove all federal and state property from the tax sale list, city officials have chosen to go through the tax sale files manually.
In May, a computer error caused the city to sell tax liens on the Ravens and Orioles stadiums, two Amtrak properties and Johns Hopkins Hospital parking garage worth $19.5 million, said Finance Director Henry Raymond. This major error prompted city officials initiate the project. Since the properties are owned by a state agency, they should not have been offered for sale.
The Baltimore Sun analyzed the auction records, which revealed that the city had sold liens on about five other properties owned by the state. Last month, the city offered an estimated 10,800 liens in the annual tax sale.The process is supported by the Pugh administration, Raymond said. He believes that internal fact-checking can prevent the mistaken sell of property liens. Property owners are sent multiple mailings warning them that investors could potentially bid on property liens against them and eventually foreclose on their property.
Property owners who owe unpaid water pills, fines or taxes are at risk of having their lien sold to an investor. Once the lien is sold, the investor may attempt to collect the outstanding debt, along with legal fees and interest. The investor also has the option of foreclosing on the property without trying to collect the debt first.
The review will allow city agencies to analyze and improve the tax sale. The goal for city officials is to maximize the amount of overdue fines and taxes, avoid creating more abandoned property and get involved when a longtime resident gets behind on their water and tax bills.
Legal fees and up to 18 percent interest can be tacked on the unpaid bill by the investor, which is why the tax sale process is so controversial.
Earlier this year, Governor Larry Hogan signed a measure to create a 17-member task force undertake the review of the tax sale process statewide.
“The review process is presently occurring,” Raymond said. “It is ongoing because there are a lot of records to go through.”