GENERAL INFORMATION
MONTGOMERY COUNTY, MARYLAND
TAX SALE
INFORMATION AND PROCEDURES
June 10, 2013
The
Montgomery County tax sale program enables the
County to collect all unpaid and delinquent property taxes as required by
statute. Legal references for this program are provided in the Tax-Property
Article of the Annotated Code of Maryland,
2012 Replacement Volume, as amended. All unpaid taxes on real property
constitute a lien on the real property from the date they become due until paid
(Section 14-804 (a), Section 14-805 (a)). It is mandatory that the Collector
sell any property on which taxes are in arrears (Section 14-808). There may be tax
liens pertaining to properties sold for which taxes were paid prior to the sale
date or other circumstances which
render the sale invalid or void. In the event the County determines that a tax
sale is invalid and void the County will, as the exclusive remedy available to
the purchaser, reimburse the purchaser the tax sale purchase price paid,
without interest, or any applicable high bid premium paid, without interest. The
tax sale bidder/purchaser assumes all risks of any irregularity of the sale and
has no other remedy against the County. The County is not liable for and will
not pay the bidder/purchaser any interest, costs, expenses or attorney fees
associated with the invalid or void sale.
Events that may invalidate a tax sale include, but are not limited to,
bankruptcy filings prior to the tax sale, transfer errors on the assessor’s
records that cause the failure of notice to the proper property owner or sale
of incorrect property, payment of taxes prior to the tax sale, issuance of a
revised tax bill by the County, value changes by the assessor, erroneous service
charges, service fees, special improvement levies, WSSC charges, or refuse
charges. There is no warranty, expressed or implied, that a property has a
marketable title or that it contains the area of land which it is said to
contain; therefore, the purchaser assumes all risks in that regard. At the tax
sale, a property tax lien is offered for sale to the highest bidder. Once sold
and the total amount due is paid by the bidder/purchaser to the County, the
County's lien on the property passes to the bidder/purchaser. The public sealed
bid sale is conducted annually on the second Monday of June of each Levy Year.
For Levy Year 2012, the sale will take place on Monday, June 10, 2013, between 8:00
a.m. and 2:00 p.m. Eastern
Time (ET) in the Division of Treasury,
Department of Finance, located at 255 Rockville Pike, Suite L-15, Rockville, Maryland 20850. These tax sale procedures are unique
to Montgomery County and may differ from those used in
other Maryland
counties. This document provides information and procedures relative to the
June 10, 2013 tax sale. Tax sales are complex proceedings and the County
recommends that individuals seek legal advice prior to participation in the
annual tax sale.
NOTICE OF
SALE
Real
property taxes, refuse charges, WSSC charges, special improvement levies,
service charges and other fees or charges are due and payable without interest and
penalties on July 1st of each taxable year. For the purpose of this
document, the term “taxes” shall include, but is not limited to all the
preceding types of charges (Section 14-801(c)). The taxes are overdue and in
arrears on the succeeding October 1st for annual billing accounts;
and October 1st and January 1st for semi-annual billing
accounts, respectively. Interest and penalty accrues from October 1st
and/or January 1st at the rate of 1 & 2/3 percent per month or
any fraction of a month until paid in full (Section 14-603 and Section 14-703).
Supplemental ¾, ½, and ¼ year levies are overdue and in arrears 30 days from
the date of billing. Interest and
penalty accrues at the rate of 1 & 2/3 percent per month or any fraction of
a month until paid in full (Section 14-603 and Section 14-703).
At
least 30 days prior to the date the property tax lien is first advertised for
tax sale, the Collector will mail a notice of sale to the person who last
appears as owner on the Collector's tax rolls, at the last mailing address
shown on the tax rolls (Section 14-812).
The
Collector will cause to be published, once a week for four successive weeks, a
listing of the delinquent properties in one or more local newspapers. This
advertisement serves as notice to the property owners and any lien holders that
the property tax lien is to be sold at tax sale. The advertisement contains the
date, time, and place of the sale, as well as a description
of the property, the name of the person who last appears on the Collector's tax
roll as the owner, the assessed and full cash value of the property as
determined by the last assessment, and the tax sale amount. The amount
advertised includes, or may include, any one or combination of the following:
delinquent taxes (State, County or Municipal), interest, penalty, refuse
charges, special improvement assessments (total unpaid), weed and tree bills,
demolition costs, front foot benefit charges, and service charges. The amount
advertised also includes an advertising fee and, if required, the cost of
surveying and attorney's fees incurred by the County, plus an administration
fee to cover the County's cost of holding the tax sale (Section 14-813).
Property
groups are advertised for sale, along with the rules and procedures for bidding
on the groups, in the Montgomery County Sentinel newspaper on May 16, May 23, May
30, and June 6, 2013. Properties will also be advertised on the County’s dedicated
internet website at www.montgomerycountymd.gov/taxliensale
THE SALE
Each
parcel of property liable to sale shall be sold as an entirety as the parcel of
property is assessed in the assessment records (Section 14-814). Effective with
the 1998 tax sale, a sealed bid process is utilized. No property tax lien will
be sold for a sum less than the advertised price. When sold, the County's lien
on the property passes to the bidder/purchaser (Section 14-817).
At the time the advertisement is
prepared, all delinquent tax accounts from the various election districts will
be divided into groups consisting of approximately the same number of randomly
selected properties. During the advertising period - May 16 through June 6 - and
up to 4:30 pm on June 7,
2013, properties can be removed from groups because of payments received and
other events deemed necessary by the County. Therefore, the final number of
properties within each group may be less than advertised. The property groups
will be numbered for identification.
In accordance with legislation
passed in 1998 by the Maryland General Assembly, the County utilizes a sealed
bid process to conduct the tax sale. Bidders can bid on the tax liens for one property group, multiple property
groups, or on any number of individual properties from different groups. Bidders
bidding on full groups will be given priority over bidders seeking to purchase
individual property tax liens.
All
bids must include the following information to be considered:
§ The name, address, and daytime telephone number of the
bidder.
§ The name to appear on the tax sale certificate.
§
For group bids,
the group number must be identified. For individual property tax lien bids, the
tax account numbers of the individual properties as well as the associated
group number must be identified.
§ The bid must be expressed as a multiple (bid factor)
of the full cash value of each property or, for group bids, all the properties
in the group. For example, a group bid factor of 0.45 indicates that the bidder
is bidding 0.45 times the full cash value on all properties in the
group. If a bidder is bidding on more than one group the bid factor can be
different for different groups. However, in that case the bid factor may not be
different for individual properties within the group. If a bidder is bidding on
multiple individual properties, the bid factor can be different for the
individual properties.
Bids that do not include all the
preceding information are not responsive and excluded from the tax sale.
In the case where the bids are identical for the same group of properties, the
winning bid will be selected by lottery no later than 9:00 a.m. ET on Tuesday, June 11, 2013.
Bids must be received between 8:00
a.m. and 2:00 p.m. ET on
Monday, June 10, 2013. Bids may be submitted by express mail, overnight or
courier delivery, or in person. Bids must be addressed to the attention of the “Tax
Sale Administrator,” Division of Treasury,
255 Rockville Pike, Suite
L15, Rockville,
MD 20850.
Bids may also be submitted via e-mail to: taxliensalebid.finance@montgomerycountymd.gov.
All attachments must be MS Windows compatible. Faxed bids will not be
accepted.
The high-bid premium is 20% of the
amount by which the bid amount exceeds 40% of the property full cash value. In
the event that the computation results in a negative high bid premium, the
premium amount will be set to zero.
All successful bidders/purchasers
will be notified by telephone no later than 10:00 a.m. ET on Tuesday, June 11, 2013. Notification will
include the tax sale amount and the amount due for the high-bid premium. Bidders
who are subject to a lottery will also be notified at that time. The successful
bidder/purchaser is required to pay the full amount due for all
winning bids as advertised plus any high-bid premium with payment received by
the County no later than 4:00 p.m. ET
on Tuesday, June 11, 2013. The method of payment is electronic funds transfer.
The County will confirm with its bank the receipt of the payment. Wire payments
must be directed to PNC Bank, 800 Connecticut Avenue, NW, Washington, DC 20006 ABA
#031000053 for credit to Montgomery County Maryland Depository Account Number
5303548113, TIN#526000980.
Successful purchasers who do not
make payment of the full amount due for all winning bids by the
specified time are considered non-compliant and excluded from the auction. At
that time, the County reserves the right to make the award to the next highest
bidder until all tax liens are sold. The Collector reserves the right to take
appropriate action under Tax-Property Section 14-817(a)(3) including, but not
limited to, the right to refuse to accept bids that are not made in good faith
and the right to bar a purchaser or holder of a certificate from participating
in future tax sales held by the County. At the County’s option, property groups
and/or individual properties not sold may be offered for sale, at a later date,
to the highest bidder until sold.
THE
CERTIFICATE OF SALE
The
Collector will deliver to the purchaser a certificate of sale. The certificate
sets forth the fact that the property tax lien described therein was sold by
the Collector to the purchaser, the date of sale, the amount paid (total tax
sale amount excluding the applicable high-bid premium), and the interest rate
for redemption. The certificate is null and void if an action to foreclose the
right of redemption is not instituted by the holder within two years from the
date of the certificate. Thereafter, all rights of the purchaser of the
certificate cease (Section 14-820). Certificates of sale will be prepared and
delivered within six months of the tax sale. A receipt of all property tax
liens purchased and the amounts paid will be issued to the purchaser.
Any
certificate of sale, properly executed, can be assigned. The assignment vests
in the assignee all the rights, title and interest of the original purchaser
(Section 14-821).
The
certificate of sale may be recorded among the land records of the County.
However, failure to record does not in any manner affect the right to institute
foreclosure proceedings within the time limits prescribed (Section 14-822).
The
certificate of sale is presumptive evidence in all courts, in all proceedings
by and against the purchaser, of the truth of the statements therein (Section
14-823).
REDEMPTION
BY OWNERS
The
owner or other person having an estate or interest in the property sold has the
right to redeem the property tax lien at any time until the right of redemption
is finally foreclosed by an order of the Circuit Court (Section 14-827). During
this period of redemption, the owner of the property has the right to continue
in possession of and to exercise all rights of ownership until such time as the
right of redemption is foreclosed (Section 14-830).
To
redeem a property tax lien, the owner must:
§ Determine the redemption amount and obtain a
release for actual and reasonable expenses from the certificate of sale holder
by calling the County at 240-777-0311.
During the first four months after the date
of the tax sale, properties may be redeemed without payment of the expenses of
the certificate of sale holder, including legal fees;
§ Reimburse the certificate of sale holder for
actual and reasonable expenses incurred after a four month waiting period in
preparation for any action to foreclose the right of redemption including fees
paid for recording the certificate of sale, for reasonable attorney's fees for
each certificate of sale, for expenses incurred in the publication and service
of process by publication, for reasonable fees for a necessary title search,
and for taxes (together with interest and penalties) arising after the date of
sale that have been paid by the plaintiff or the holder of the certificate of
sale (Section 14-843).
§ Obtain a release from the certificate of sale
holder, the plaintiff, or their attorney, that all reimbursable fees and
expenses, if any, were satisfied; and
§ Present the release and pay to the Collector
all redemption amounts due described below and all taxes in arrears after the
tax sale to bring the tax account current. The redemption amount includes the
amount due at tax sale and any interest computed from the date of the tax sale
to the date of the redemption payment (Section 14-828). The current redemption
interest rate, as stated on the certificate of sale, is 20 percent per annum
calculated on a daily basis beginning June 10, 2013. Redemption payment must be
made by certified check, cashier's check, money order, or cash to Montgomery County. Any subsequent years taxes must
also be paid at that time.
When all
redemption obligations are satisfied by the owner, the Collector will:
§
Notify the holder
of the certificate of sale that the property tax lien was redeemed and that the
certificate must be surrendered to the Collector prior to payment of any amount.
§
Upon receipt of
the certificate of sale, the County will remit all money received for
redemption and any high bid premium to the holder of the certificate (Section
14-828(c)).
§
Redemption
payments will only be made for those properties for which the certificate of
sale has been returned to the County.
§
The County will
refund the high-bid premium, without interest, to the holder of the tax
sale certificate on redemption of the property tax lien or to the plaintiff in
an action to foreclose the right of redemption on delivery of a tax sale deed
for the property for which the high-bid premium was paid. The high-bid
premium is not refundable after the time required (under Section 14-833) for
the filing of an action to foreclose the right of redemption, if there has been
no redemption and if an action to foreclose the right of redemption has not
been filed within that time.
If an
action by the holder of the certificate to foreclose the right of redemption
was filed and there is a dispute regarding redemption, an order of the Court is
required before the County will release payment (Section 14-829).
Suggested
formats for this release are attached as Exhibits A and B. The property owner
is provided with the telephone number of the purchaser of the certificate of
sale and is required to secure such release.
ACTIONS
TO FORECLOSE
The
holder of a certificate of sale may at any time after the expiration of six
months from the date of sale, file a complaint in the Circuit Court to
foreclose all rights of redemption of the property to which such certificate
relates. If this action is not taken within a two-year period subsequent to
sale, the certificate is void (Section 14-833).
The certificate of sale must be attached and
made a part of the complaint (Section 14-835). The plaintiff in any action to
foreclose the right of redemption must be the holder of the certificate of
sale. The defendants in the proceedings must be (a) record owner(s) of the
property, (b) owner of ground rents, if applicable, (c) mortgage holders and
trustees under any deed of trust, (d) the State of Maryland, and (e) the County
(Section 14-836).
If
the court enters a final judgment for the plaintiff, the judgment vests in the
plaintiff an absolute and indefeasible title in fee simple. If the property on
which the tax lien sold was subject to ground rent, the judgment vests a
leasehold interest in the plaintiff (Section 14-844).
The
final judgment of the Court will direct the Collector to execute a deed upon
payment to the Collector, the balance of the purchase price, together with all
taxes, interest, penalty and charges accruing subsequent to the sale. The deed is
to be prepared by the holder of the certificate of sale or an attorney. The
Collector is not obligated to execute the deed until the Clerk of the Court has
furnished the Collector with a certified copy of the judgment. If the holder of
the certificate does not comply with the terms of the final judgment within 90
days, the judgment may be stricken by the Court upon the motion of an
interested party (Section 14-847).
Once
a judgment is granted, the plaintiff becomes liable for taxes due after the
judgment and for any surplus bid (Section 14-844(d)).
Any
person who acquires a deed to property under this subtitle is entitled to
issuance of a writ for possession of the property under the Maryland Rules as
if the person had obtained a judgment awarding possession of the property
(Section 14-850).
Any
questions regarding this tax sale information and procedures document may be
directed to Montgomery County,
MD by either calling 240-777-0311,
or mailing your correspondence to the Montgomery County Division of Treasury, 255 Rockville Pike, Suite-L15, Rockville, MD
20850 Attention: Tax
Sale Administrator.
This
information is provided as a courtesy to any interested party. The County does
not warrant the accuracy of the information contained herein. You should refer
to State and Local Statutes for more detailed and precise information. The County
may not provide you with any legal advice.
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