November 18 Tax Lien Sale will auction delinquent real estate taxes for 2009 in Garfield County

November 10, 2010

The number of properties in Garfield County with delinquent in taxes has risen by approximately 30% since this time last year. This year 912 tax liens have been advertised for the sale, while in 2009, 663 tax liens were advertised. This year’s tax lien sale is November 18, at 9:30 am in the Garfield County Administration Building, Room 100. Doug Britten will be the auctioneer.

“People are coming in daily to catch up on their taxes prior to the sale,” said Georgia Chamberlain, Garfield County treasurer. “Last year 282 tax liens or approximately 43% of the tax liens listed were auctioned at the sale. I expect about 400 tax liens to go to sale day this year which is another indication of how hard the recession has affected local residents.”

At a tax lien sale only the tax amounts owed (not the actual properties) are auctioned to investors who pay the taxes. If taxes for subsequent years become delinquent, that investor also has a first right to pay those delinquent taxes prior to the tax lien sale and add those amounts to his certificate earning interest at the rate established when the first tax lien was purchased. Investors earn interest accruing at 9.5 basis points over the discount rate on September 1 each year. Investors will earn 10% interest this year.

“It amounts to a short term loan for property owners without the paperwork of going to the bank,” Chamberlain says. “When an investor pays the taxes, it helps taxpayers who are having trouble with cash flow; it helps the taxing authorities receive the revenues they depend on; and, although there is some risk, investors make a much higher return on their investment than banks are typically able to pay.”

At any time during the three year term, landowners can pay the tax bill and interest off through the county. The treasurer’s office receives all payments and distributes them back to investors as they are paid and redeemed by the property owner. If at the end of the three year period the taxes remain unredeemed, the investor may apply to the treasurer for a treasurer’s deed to the property.

Looking back over the last three years, in 2007, prior to the 2008 recession, 127 tax liens owing $236,715 were auctioned at the tax lien sale, and the interest rate was 15%. In 2008, 154 tax liens owing $383,206 were auctioned, with an interest rate of 11%; and in 2009, 282 tax liens owing $1,053,326 were auctioned, with an interest rate of 10%. At the 2007 sale, the average premium bid was 9% above the beginning amount of taxes with penalties; at the 2008, the average premium bid was 5%; and in 2009 the average premium bid was 2%.

More information on the sale:

REGISTRATION: Everyone participating in the tax lien sale must register at the Garfield County Administration Building, Room 100, the morning of the sale. Doors will open at 8:30 a.m. for registration. Buyers are responsible for ensuring that the information on the registration form is legible and correct. The name given at registration is the name that will appear on the certificate of purchase.

FORM W-9: W-9 forms will be available and must be completed prior to registration. The IRS now requires County Treasurers to report on form 1099 interest income earned through tax lien investments.

SALE: Each delinquent parcel will be offered for a minimum bid (the amount of taxes, advertising, penalty interest, and costs), and will be subject to general bidding and sold to the highest bidder.

PREMIUM BIDS: Bids above the minimum bid amount are non-refundable and draw no interest.

INTEREST: When redeemed, the investor will be paid 10% per annum on the minimum bid amount.