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Clearing Tax Lien in MA

Discussion in 'Liens & Encumbrances' started by Ray H., Jan 17, 2019.

  1. Ray H.

    Ray H. Law Topic Starter New Member

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    Jurisdiction:
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    Hello, I am considering the purchase of a property in MA. However, the property is abandoned and the previous owner is decreased with a growing Tax Lien.

    Is there a way to clear the tax lien, as the lien nearly exceeds the value of the property.

    Any insight is greatly appreciated.
     
  2. adjusterjack

    adjusterjack Super Moderator

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    You clear the lien by paying the tax.

    Though I suppose you could contact the taxing authority and attempt to negotiate a discounted cash settlement that makes it worthwhile buying the property.

    Otherwise, walk away.
     
  3. Tax Counsel

    Tax Counsel Well-Known Member

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    Contact the local real property tax collector (if this is a real estate tax lien) and see if/when the collector will auction the property to pay the lien. If you are the successful bidder at the sale, you'd get the property free of the lien.
     
    army judge likes this.
  4. Ray H.

    Ray H. Law Topic Starter New Member

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    Thank you for both replies.

    My environmental consultant expects the cost to remediate the land and existing structure to exceed the value of the land. If I am able to prove this, would I be able to negotiate recusing the cost to $1? Or is this only possible via auction?
     
  5. adjusterjack

    adjusterjack Super Moderator

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    Then it's a losing proposition even if you get the land for a dollar. Unless it's not really a losing proposition and you expect to make a substantial profit on the land at some point.

    I suppose it's remotely possible that you can get it for free but I doubt it. All the taxing authority has to do is sit on the arrears and wait until somebody comes along with cash. Doesn't cost them anything.
     
  6. army judge

    army judge Super Moderator

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    You can try, but gubmints rarely make deals, they have no incentive to do so.

    That said, nothing beats a try but a failure.
     
  7. Tax Counsel

    Tax Counsel Well-Known Member

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    Typically the rules provide the local tax authority must auction the property so as to ensure the authority gets the highest price for it. Cutting private side deals with jsut one interested party is usually not permitted as that suggests the tax authority is not meeting its obligations to the public and the owner of the property to get the highest price for it.
     
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  8. Ray H.

    Ray H. Law Topic Starter New Member

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    Thank you all, this potential project has many hurdles as the mortgage lien is approx. $275K, the Tax lien is approx. $100K, and the environmental clean up and demo will likely cost $200K.

    That being said, the potential is to turn the property into 9-10 Condos new Condos. With the debt alone listed above the project is not feasible as is and am hoping to find ways to bridge the gap. I am also trying to track down old insurance policies/claims for clean up.

    There is better projects out there, I just would really love to clean up this great area. =)
     
  9. army judge

    army judge Super Moderator

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    As a person who has invested in PROFITABLE projects, because whenever I have doubts I simply walk away.

    You are free to do whatever you wish to do, or chase any deal you wish.

    That said, I wish you bon chance and HUGE profits, mucho dinero for you, senor or senora.
     
  10. Ray H.

    Ray H. Law Topic Starter New Member

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    I have been in touch with the Town Economic Developer (Who has been helping me along with my desired project). He says the Town does not currently own the site and has no interest in purchasing or foreclosing on the site. (Obviously because they view the site as a liability).

    Here's a novice question, is it possible they can foreclosure the Tax Lien or Auction the Tax Lien only?
     
  11. army judge

    army judge Super Moderator

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    Anything is possible, many things are improbable.

    If the property goes to a sheriff's sale (or public auction), highest bidder wins.
     
  12. Ray H.

    Ray H. Law Topic Starter New Member

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    Army Judge - What would you try to do in this situation? =)
     
  13. army judge

    army judge Super Moderator

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    I'm very impatient.

    I'm risk averse, and avoid complications.

    If I can't purchase real estate as easily as I can chewing gum, I walk away!

    I'd find a better deal elsewhere.

    Contrary to popular reports, if one desires to buy property, one simply needs to seek to find.
     
  14. Tax Counsel

    Tax Counsel Well-Known Member

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    In some states the collector has the option to sell the property or to sell the lien. But my look at the Massachusetts statutes indicates only a right for the collector to sell the property or for the town to take the property for itself until the property is redeemed. You may want to consult an attorney in Massachusetts who is very familiar with real estate tax sales to see what options there might be.

    Frankly, though, even if you could just buy the lien, in the situation you have that might still leave you having to shell out more than the property is worth to clear all liens and encumbrances. Personally, given what you have said here, I would be inclined t to walk a way from it. Property with environmental problems can end up being extremely costly to remediate the contamination.
     

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