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GENERAL INFORMATION

  

MONTGOMERY COUNTY, MARYLAND

TAX SALE INFORMATION AND PROCEDURES

June 9, 2014

 

              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, and 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 2013, the sale will take place on Monday, June 9, 2014, 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 9, 2014 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 15, May 22, May 29, and June 5, 2014. 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 of May 15 through June 5 and up to 4:30 pm on June 6, 2014, properties can be removed from groups because of payments received and other events as 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 10, 2014.

             Bids must be received between 8:00 a.m. and 2:00 p.m. ET on Monday, June 9, 2014. 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 10, 2014. 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 10, 2014. 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 9, 2014. 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.

 

 
 

 

 
Last edited: 4/11/2014