Tax foreclosure sale coming up

July 8, 2011
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Kent County will hold its annual tax-foreclosure sale next month, and as of last week about 200 parcels are expected be up for auction then — more than the 144 properties that made last year’s sale and the 102 in 2009.

The auction will be held Aug. 17 in the Grand Gallery at DeVos Place. Bidders can register at 11 a.m., and the auction will get underway at noon.

This year’s sale is coming a few weeks later than usual, as it is normally held in late July. Kent County Treasurer Kenneth Parrish told the Business Journal there are two reasons it’s being held in mid-August this year, and one has to do with the Internal Revenue Service.

“We’re trying to avoid any issues in dealing with properties that might have an IRS lien. There have been some situations like that in the past, not in Kent County but in other counties. If the IRS has a lien on a foreclosed property, they still have additional time to redeem the properties, which runs through the end of July,” said Parrish.

Parrish explained that if the county held an auction July 20 and sold a property that had an IRS lien attached to it, the IRS could have claimed it after it had been sold to a bidder to protect its tax claim. “That’s one issue. We simply want to avoid any problems with the IRS,” he said.

The second reason for the later-than-usual sale is that the firm that runs the auction, Title-Check LLC of Kalamazoo, provides the same service for dozens of Michigan counties, and logistics is a concern for the company as it will host many sales across the state in August.

“They asked if they could try to put together a schedule of when every county has their sale so they’re not going from Marquette to Detroit to Traverse City to Grand Rapids. They want kind of an orderly schedule so they’re just moving from one county to the next,” said Parrish.

Parrish said he didn’t know the exact number of parcels that will be available at the auction because some of the taxing authorities still have the right to hold on to some properties. There were 229 parcels on the list that went to the local units of government for their reviews, and Parrish thought that roughly 200 would be on the auction block. Each property will have a minimum-bid requirement so the county can cover the back taxes that are owed by the parcels’ former owners. The county buys the delinquent taxes from the local units each year.

“I’m expecting that we will have a very active auction,” Parrish said.

Active is an appropriate word to describe last year’s auctions. Seventy-eight of the 144 properties on the list were sold last July; the sales were worth more than $1.1 million. A second auction in September resulted in all but three of the remaining properties being sold for an additional $131,540 in revenue. The county needed $860,000 last year to make its delinquent-taxes revolving fund whole and was able to top that figure by more than $400,000 from the sales. This year, Parrish felt the fund will likely need close to $1 million to meet that mark.

This year, a few of the properties may be deposited into the Kent County Land Bank. If that happens, those parcels would be the first to come under the bank’s ownership.

“I’ve been reviewing the list and, over the next couple of weeks, we’re going to be out taking a look at some of the properties,” said Parrish. “So I do think the land bank will be approaching the county board of commissioners to exercise their right of refusal to acquire some properties on behalf of the land bank prior to the auction.”

Parrish added that he didn’t know how many the land bank will acquire or where those properties will be located, but his office was in the process of identifying those parcels last week.

“I’m very excited that we’re finally getting some momentum with the land bank,” he said.

“A couple of weeks ago we received notice that we were approved for a ($80,000) grant from the (Grand Rapids) Community Foundation. So we have some dollars available now and we should be able to hire an executive director very soon.”

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