Westbrook’s new tax policy is expected to recoup upwards of $1 million for the city by July, accounting for the majority of outstanding property taxes.
The policy allowing the city to foreclose on properties for back taxes came in August 2020 after years of inactivity on the city’s part to collect them, Mayor Mike Foley said.
With over $450,000 collected to date, Foley expects the remainder of the unpaid taxes, some dating back to 1998, to be paid off by the end of the fiscal year on July 1. The city is working with delinquent property owners and plans to settle one of the bigger debts owed, $400,000, next month.
“With the process we now have in place, we should never get back to this place again,” City Administrator Jerre Bryant said. “The incredible success has surprised me; we’ve cleaned up the older delinquencies and those are usually challenging.”
Foley said he expects property owners will not let their overdue tax payments get to the point where the city forecloses.
“For decades the city failed to properly collect unpaid property taxes and deal with tax-acquired property as allowed by law,” Foley said. “The city has adopted a new policy concerning tax-acquired properties, establishing a brief period in which any prior owner could come forward to pay all overdue taxes in order to get the property deeded back to them.”
Eighty-seven properties remain in foreclosure – 34 residential, four commercial and 49 parcels of land. The largest dollar value owed on a single property is $86,818.
“There is one individual who owns nine properties and owes the city approximately $350,000,” Tax Collector Dena Lebeda said.
Last year, the city also offered an amnesty program that allows people to pay off delinquent taxes without the interest accrued.
“We thought it was fair to give amnesty for residential owner-occupied properties. Everyone on that list got a mailing from the city,” Bryant said.
Four property owners took advantage of the amnesty program, paying off taxes that in some cases initially had hundreds of thousands of dollars in interest attached.
City councilors will meet with Lebeda this week to review the list of foreclosed properties to determine which ones the city made take, keep or sell.
The city doesn’t plan to take owner-occupied homes. Some of the properties are unoccupied or are just vacant lots.
“We look at it and if it is a bigger piece of land with no public use available for it, we may sell it. We haven’t gotten to that decision point yet because we’ve had great success in getting payments,” Bryant said.
So far the city has sold no properties.
Lebeda is contacting property owners with more recent unpaid taxes.
“For this year, FY21, liens will be filed for any unpaid amount over $50 this August,” Lebeda said. “After 18 months, the lien matures, resulting in automatic foreclosure. Once this occurs, the city legally owns the property.”
A lien matures in 18 months. After a few months of legal notices, the city can then take the land and auction it or keep it. However, if families or elderly people reside on the property, the city, after a review by Lebeda and other officials, can allow them to keep living there. If those owners sell the property, the new owner is responsible for the outstanding taxes.
“The city can become more aggressive and diligent in pursuing delinquencies, but we can still do it in a compassionate and discreet fashion. We have an obligation that taxes assessed get paid for the fairness of every other taxpayer,” Bryant said.
The new policy can be found on the town website.