GENERAL INFORMATION
MONTGOMERY COUNTY, MARYLAND
TAX SALE INFORMATION AND PROCEDURES
June 9, 2008
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, 2001 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 2007, the sale will take place on Monday, June 9, 2008, between
and including 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, 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, 2008 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 on the
succeeding October 1st, January 1st, and April 1st,
respectively. 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 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 15th,
May 22nd, May 29th, and June 5th, 2008. Properties will also be advertised on the County’s
dedicated internet website at www.montgomerycountymd.gov/finance/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 property groups consisting of
approximately the same number of properties randomly selected. During the
advertising period, May 15th through June 5th and up to
the tax sale date, properties can be removed from groups predicated on 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
would indicate 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 will be judged 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, 2008.
Bids
must be received between and including 8:00
a.m. and 2:00 p.m. ET on Monday, June 9, 2008.
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 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, 2008.
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, 2008.
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 for 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 will 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 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 receipted listing 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 the need to obtain a release
for actual and reasonable expenses from the certificate of sale holder by
calling the County at 240-777-8950.
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, and 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 to the Collector and pay 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, any interest computed from the date of the tax sale to the date of
the redemption payment (Section 14-828), and reimbursement to 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). The current redemption
interest rate, as stated on the certificate of sale, is 20 percent per annum.
Redemption payment must be made by certified check, cashier's check, money
order, or cash to Montgomery County.
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; and
§
Upon receipt of the certificate of
sale, the County will remit all money received for redemption and the high bid
premium to the holder of the certificate (Section 14-828(c)).
§
Redemption payments will only be
made for those properties that 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 may be directed to
the County by calling 240-777-8950, sending an e-mail to: treasmai@montgomerycountymd.gov,
or mailing your correspondence to the Montgomery County Division of Treasury, 255
Rockville Pike, Suite-L15, Rockville, MD 20850 Attention: Tax Sale Unit.
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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