WORCESTER – The owner of a property on Sears Island Drive received a letter from a Boston law firm this week which says the City of Worcester sold a tax collector’s deed on his property.
The letter, dated Sept. 21, 2023, says the deed, sold at auction on June 2, 2022, was purchased by Tallage Brooks LLC. The letter also says the tax collector’s deed “vests title of your property in Tallage, subject to your right to redeem the property by paying all of the outstanding taxes, interest, legal fees, and costs.”
Tallage Brooks LLC is part of a group of private investment companies that participates in tax and property lien purchases.
The property owner, Holmes Wilson, says he hadn’t previously received a notice of a balance due and was surprised to first hear it from a lawyer of a third party.
The date the letter says the tax collector’s deed was purchased is just 28 days prior to the end of Fiscal Year 2022. Public records show that $3,981.47 was paid in Fiscal Year 2022 and the remaining balance due as $0.00. It also shows “previous years taxes totaling” as $0.00. Outside of charges shown as accrued since August 1, 2023, the only outstanding balance shown is $6.88 due for Fiscal Year 2023 and $147.19 for “other unpaid obligations due to the COW.’
Wilson said the city would not tell him what he owes. He’s waiting for an email back from Hill Law.
“When my lawn was messy, the guy from the city looked up my mobile phone number in their computer and called me personally, or city inspectors will just knock on your door about a problem with building code,” Holmes said. “But for taxes I don’t even appear to owe, I get notified by a law firm that the city sold a deed to my property over a year ago. And I could lose my house!”
In July, the Worcester Telegram and Gazette reported that Tallage had won a foreclosure on a Worcester woman’s home before she was aware the tax lien existed. She owes $2.256 in property taxes. Tallage bought the lien for $3,370. The home was assessed at $291,500.
23 Worcester Homes Sold for Tax Liens from 2014 to 2020
A study by the Pacific Legal Foundation of 31 Massachusetts municipalities, which are home to a third of the state’s population, sold 254 tax-foreclosed homes between January 2014 and December 2020. When these homes are foreclosed, the property owner does not receive the amount of the sale over the taxes owed. The study found that the average homeowner lost roughly $260,000 in equity, around 87 percent, for an average tax debt of $36,000.
During the study period, researchers found two homes sold by the City of Worcester for tax liens. The city retained $139,742 more than the taxes owed on those properties. Tallage purchased tax liens on 21 homes during the same period. It sold those homes for $1.751 million more than it paid the city for the purchase of those liens.
Of the 31 municipalities included in the Pacific Legal Foundation study, 11 did not sell any tax-foreclosed homes.
Worcester Holds Deed Auction 13 Days After SCOTUS Ruling
In May, a unanimous decision by the United States Supreme Court ruled in Tyler v. Hennepin County, Minnesota violated the Takings Clause of the Fifth Amendment of the Constitution when it seized a $40,000 condo from a 94-year-old woman who owed $15,000 in unpaid taxes and fees and did not return the $25,000 profit to the woman. The takings clause is the final clause in the Fifth Amendment, which reads, “nor shall private property be taken for public use, without just compensation.”
Thirteen days after the United States Supreme Court decision in Tyler v. Hennepin County, the City of Worcester held an auction on June 7 for tax collector’s deeds on over 200 properties in the city. The third property on the list, at 23 Albany St., owes $33.27 in unpaid taxes from Fiscal Year 2022. A property at 611 Cambridge St. owes $123.77 from Fiscal Year 2022. See the entire list of properties the city offered tax lien deeds for auction on June 7.
The city has not announced its next auction for tax lien deeds.
At the state level, Article X of the first part of the Massachusetts Constitution says, “but no part of the property of any individual can, with justice, be taken from him, or applied to public uses, without his own consent, or that of the representative body of the people.”
The practice of actioning tax lien deeds is authorized in Mass. General Laws §60 Ch. 43, which says “If the taxes are not paid, the collector shall, at the time and place appointed for the sale, sell by public auction, for the amount of the taxes and interest, if any, and necessary intervening charges, the smallest undivided part of the land which will bring said amount, or the whole for said amount.” The Massachusetts Supreme Judicial Court has yet to rule on a challenge to the law or its contradiction with the state constitution.
Article VI, Clause 2 of the United States Constitution, known as the Supremacy Clause, states that federal law is “the supreme Law of the Land; and the Judges in every State shall be bound thereby, any thing in the Constitution or Laws of any State to the Contrary notwithstanding.”
State legislation introduced in the Massachusetts House of Representatives, H. 2937, has over two dozen co-sponsors. Introduced by Jeffrey Roy of the 10th of Franklin and Tommy Vitolo of Brookline, the act would add additional requirements of collectors including notice periods. The bill was referred to the Joint Committee on Revenue in February and was part of a committee hearing on June 22. No other action has been taken on the bill. Previous bills addressing the topic have never advanced out of committee.
As This Week in Worcester reported earlier this week, a new study found the Massachusetts Legislature the least efficient in the U.S.
