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How The City Collects What It's Owed And The Impact On Low-Income Residents

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Each year, Baltimore city collects hundreds of millions of dollars from residents. This money comes from sources like property taxes and water bills. But, what does the city do when people don’t or can’t pay? You may have heard that this spring the city sent out notices to those more than six months behind on a water bill of at least $250 that the city will shut off their water. Shutting off service motivates a lot of people to pay, if they can. But, another way the city collects is through an annual “tax sale” or online auction. The tax sale this year is on Monday. Senior Producer Matt Purdy has been looking into how it does and doesn’t work and brings us this story.

You can find out more about Baltimore's tax sale at BidBaltimore.com. Also, check out this in-depth report from the Abell Foundation, released last fall.

UPDATE

After this story broadcast, we heard from Margaret Henn from the Pro Bono Resource Center of Maryland, who was featured in the story. She wrote:

Thank you for your in depth reporting on the tax sale issue. One point of clarification about the number of people affected by this issue – although only 88 deeds were recorded transferring tax sale properties to new owners, many more tax sale cases are filed. Judge Peters, who handles the tax sale cases in Baltimore City, provided us with the following data in July 2014: Between January 2013 and December 2013 2,588 cases were filed As of January 20, 2014 2,805 cases were open In many situations, the tax sale lien purchaser will file a foreclosure case and even get a judgment but never record the deed because they do not want to pay newly accrued taxes. The judgment vests interest in the property in the tax sale certificate purchaser even though a deed is not recorded. The City did not provide us with data about how many cases ended in a judgment, but we suspect it is much higher than the 88 deed recorded."

Robin Jacobs from the Community Law Center followed up, in part:

A number of these foreclosures that get filed but do not have deeds recorded can lead to a sort of legal limbo (sometimes called “zombie properties”) that is very much connected to the vacant property problem.