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HomeMy WebLinkAboutRe: property background MEMORANDUM TO: Mayor and Orono City Council FROM: Thomas J. Radio, City Attorney R�: S ruce Place Lot 4, B , Saga Hill Revised DATE: Fe�ruary 19, 1985 � FACTUAL BACKGROUND Tne above property has been involved in a hazardous building action initiated by the City, since July 13, 1983. The contract for deed holder, James Archer, responded to the City's action and the case became a matter for protracted litigation. � On January 7, 1984, the above-cited property became the property of the State, due to tax forfeiture. The owner had from January 7, 1983, to January 7, 1984, to redeem the property. As no redemption was completed, the State now owns the land, with control vested with the Department of Natural Resources (DNR) . Dennis Morris from the County Department of Taxation has informed us that because the lake frontage of the Archer property is exactly 50 feet, the DNR could allow the sale of this to the City. Mr . Morris has prepared a resolution for the County Board requesting the DNx to release the Archer property for sale. The Board will make a decision on the resolution March 12, 1985. unce the County votes their approval, the resolution will be sent to the DNR for approval or denial, as to releasing the property for sale. Mr . Morris said the DNR process may take a month or more. If the DNR approves the sale of the land, the County will send notice of the DNR's decision to the City. The County will also ask the City whether the property should go up tor public sale. The City may, at this point, approve a public sale and further specify whether the sale should be open or restricted to the adjacent land owners. Mr . Morris felt that due to the number of procedures involved, any final public sale might not take place until Se�tember or Uctober of this year . } A �r _ >� f-: i, ^�"F,F�� �r �Y��' � Fe�ruary 19, 1985 Page 2 Accordingly, if the City were to raze the structure and rid the neighbornood of the hazardous building, it could recoup its initial expense one of two ways: 1. Purchase the land from the DNR with an appropriate deduction for the razing cost from the purchase price. If the City wishes to purchase the land from the DNR, it should request the Park Commission to review the pote�tial of the land for park and/or recreational purposes. 2. The City could sell the land at a public sale and levy an assessment on the property. The City may also recommend that the County Board pass along to the DNR, any restrictions or conditions the City may want to impose upon the land, such as restrictinq the sale to owners of adjoining land. STAFF RECOMMENDATION 1 ) The house should be razed as it presents a hazard to the public health, safety and welfare. 2) The Council should decide whether the land should be purchased for park purposes, or placed for public sale . 3 ) If the Council wishes a public sale of the land, it should decide what, if any, conditions should be imposed upon the sale. cc: John Gerhardson, Public Works Coordinator Thor�as Jacobs, Builaing Inspector 4947f - � ���� t iaa�. 3 TO: Department Heads I \ � FROM: Mark Bernhardson, City Administrator�'Z' DATS: March 17, 1987 SUBJECT: Tax Forfeited Property Procedure INTRODUCTION - Sporatically through the year the City receives listings of parcels from the County that have gone tax forfeit. The County passes these to the City as the City has the first right of refusal on tax forfeited properties. (But not County of State property otherwise acquired.) Over the years Orono has handled this in a number of different ways and it is the intent of this memo to establish a guideline by which the staff can process these requests and ensure that all the appropriate considerations are taken into account. BACKGROUND - In the State of Minnesota for a property to go tax forfeit , taxes would have not been paid for at least five years for homestead property and three years for non-homestead property. (Homestead property that has been placed for sale by the County in 1987 first had delinquent taxes in 1981. In the first year of delinquency a judgement is placed on the property, if there are no tax payments made in five years homestead property will be placed for sale. Non-homestead property placed for sale by the County in 1987 first had delinquent taxes in 1983. In the first delinquent tax year a judgement will be filed and after three years of non-payment of tax the property will be placed for sale.) Once it has gone tax forfeit the County, after having it reviewed by the respective municipality, can then place it for sale. The options that exi�.: to the City are: A. That it not be sold, B. That the City acquire the property or C. That it be placed on a limited sale because of its unique nature to abutting property owners . There are generally three types of monies that the taxing jurisdictions attempt to recoup from the sale of a property. A. S ep cial Assessments - Special assessments have priority on the money from the sale proceeds. This includes the total principal outstanding plus the last six years of interest. B. Unpaid Taxes - The amount that may be available for unpaid general taxes are prorated out to the various taxing jurisdictions based on the appropriate mill rates . C. Expenses Subsequent to Forfeiture - Occasionally 1 A l there are times that work is done on a property ' subsequent to it going tax forfeit. These expenditures are usually recouped separately from the sale price of I the land and are the ones that have first claim on the property. It should be noted on special assessments that when a property goes tax forfeit the special assessment is no longer valid on the property. It has generally been the County's policy that 80� of the purchase price will go to pay off any outstanding specials up to the amount of the specials plus interest and the other 20� to pay off any unpaid taxes. Any amount over that for which it is sold goes to the County. As mentioned above expenses occurred subsequent to tax forfeiture , but prior to sale , are an additional item added into the sales price and are taken out lfd0� prior to distribution of the other two areas. PROCESS GUIDELINE - The following represent the steps and considerations that should be taken into account when working with a piece of tax forfeited property. A. Receipt of Notice of Forfeiture - When the Clerk recieves notif ic on of a tax forfeited property or properties from the County the Clerk will in memo form transmit a list of the P.I.D.'s plus the attendent maps showing the location of these properties. B. Review � Department Heads - Each of the appropriate department heads will review as follows: Administration - Administrator will review in conjunction with the department heads to determine if the City has need for acquisition of the property. Public Works Coordinator - The Coordinator will review to determine if there is needed right of way, parks or any other utilization that may be made by the City of the property. Building and Zoning - The Building and Zoning Administrator will review to determine the applicable zoning to see if the lot size meets the minimum building size for the zoning district or if it is line, could be given variances making it a buildable lot. Finance - The Finance Director will have the records researched to determine any outstanding special � assessments and other charges against the property. RECOMMENDATION TO COUNCIL - After review of the property the Ac�ministrator wi ma e recommendation to the Council in the following two areas : � 1. The recommendation will include : A. Disposition City Acquisition Release for general sale - (Shoreline property under 50 feet require approval of the Department of Natural Resources. Shoreline property over 50 feet would require an act of the State Legislature. ) � Limited release - The City based on various considerations can direct, by resolution, a release of limited sale generally to abutting property owners . B. Reimbursement for Monies - In addition to i ------------- --- ------ recommendation for disposition the staff will ', recommend the total expenses to be recouped by catagory or whether the City is willing to waive any I or all of the assessments outstanding. 2. Resolution to County - The Council for the piece of propety should adopt a resolution indicating what type of sale they desire together with what expenses the City desires to be reimbursed and the total amount of those expenditures . 3 . Valuation - Once the County has received the � resolution from the City regarding disposition of the I property the County will undertake a valuation of the � property. It is helpful that at the time a resolution �I is mai led to the County that a copy of the most recent � Assessor's valuation be transmitted to the County and if � possible have the Assessor update his value on that ', property. i, 4. Property Sale - If the property is directed to be I sold then the Finance Director will transmit the amount � of money that the City wants to receive from the sale from the P.I.R. Fund to the Debt Fund to pay that off. Once the proceeds of the sale are received these will be used to reimburse the P.I.R. Fund. 5. Reassessment of Property - The City has its option for any monies not recouped in the sale price for an assessment on which there was a default the ability to reassess that amount outstanding against the property. This however, would ha ve to be subject to public hearing notice to the new property owner. It is suggested that if the City intends to reassess anything not recouped in the sale price that it be noted in the resolution to the County and that any new owner be put on notice of the possible reassessment. 3 CONCLUSION - It will be the Clerk's responsibility to track progress on the tax forfeiture items through transmittal of the resolution to the County, from there on it will be the Finance Director's responsibility to ensure that appropriate accounting for monies be undertaken. v V I 4 � � '1'AX rUltr�l'1'�ll LANll 5A1�5 ' - � �PIN COtNTY DEPA�'�-OF..PROPE�CY TAX & Pt�LIC RECORT)S S . PUBLIC SALES - All tax forfeited land offered at a public auction is sold to the highest i r. Occasianally auctio�ns are held to sell small parcels of property that hav�e been approved by the city cotmcil, in which the property is located, to be sold to adjacex�t �wners anly. ' . . TRS OVER Tf� COtNi'ER - Parcels not sold at a public sale may be purchased after the sale by paying the appraised value of�the parcel. Hawever, property appraved for sale to adjacent awners will coaztintie to be availabe to adjacent praperty. awners �ly. Prices c.annot be changed �less the parcel is reapprai.sed, republished, and subsequent publi� auctian. . ��Q `' �}.! D 'i TEItNS - Sa1e of -$150.00 of less - Flill payme�it at sale. -�I�� � �. ��; � ; Sale o 5 .00 to 00.00 - 20�'/, down or $150.00, whichever ' ea��e�r�� � �9$7 ; balance in fiv+e 5 �nual installments. �+;f�;. Sale of $1501.00 or unre - 20'/0 .do�m, except 10'/0 � all parcel mm- • _ structures, b �ce in taZ (10) �nua.l instal].m�nts + The interest rate of the �paid purchase price is a variable rate per M.S, 549.09. Approxi.mately 30 days before installments are c3ue, a billing will be mailed to indicate the aun�t of the installment, and accrued interest which is.due. Any or all install- ments may be paid in advance. There is a $23.00 state deed �d filing fee due at the time of the final payn�ent. ASSURANCE ACCOL�IT - At the time of the sale of tax forfeited land, the Department of Property Tax a�d Public Records collects, in fu11, an am�tmt eqval to 3% of the total sales price, to be paid into the state tax forfeited land assurance fimd. �This am��t is payable in adclitio� to the sales price. CO�TDTiZONS - Sales are subject to existing leases, to building restrictions appearing of record at the time of forfeiture �d to easem�ts obtained by any govemmental subdivision or agency thereof for any public purpose. The apprai.sed value does not repr�sent a basis for fut�e taxes. Cantact the city where the l�d is located for details of b�uilding codes or zociing laws. ALL PROPERTY IS SOLD "AS IS" AND MAY NOT COIV�URM T0� IACAI� BUILDING AND Z�TIl�TG ORDINAi�TTCES. T� COL$�TI'Y MAKES NO WAI2RANTY ZHE1T T� L�TD IS "BUn'.naRr�", �,j, ` SAIES ARE FIlVAL, AND NO REFLIJD6 OR EXCEEIE�N(�S ARE PERMIZI'ED. If a parcel had cancelled special assessments, as indica.ted � the publica.ti� list, approximately 90'/0 of the p�chase price will.be applied to the published. am�tmt o£ special assess�ments. Any rema�*+Tng balance may be reassessed by the ua.azicipality. Local impro�v�ents not yet assessed, and speci.a.l assessm�ts levied after forfeit�e, m�st be ass�ed by the pt�chaser. TIT1.E - The purchaser taill receive a certificate of sale at the time of purchase. The Co�nissianer of Revenue will issue a deed frcm the State of Mirmesota. after full paym�.zt '� is made. Tax forfeitur.e ma.y create a break in the chain of title, �d services of an attorney may be necessary to make the title marketable. DEFA�T - Contracts may.be cancelled by the Cotmty Board of �C�ssioners if the purchaser defaults by failure to' pay an installmen.t� and interest whe�n due, or failing to pay c�rent taxes becaming due during the tezm of the contract. A OWI� .��1T� ' The �dersigned aclmowledge(s) receipt of omplete .capy of this statement on this • day of , 19 , rior to the purchase of tax forfeited land in Heimepin Cotmty, e � rsigned st e s) at he or she has read a�d �derstands the statea�ent. - Sig�atur