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Updates for the Week of February 7, 2014
When all tax sale notices addressed to the property owner are returned “undeliverable,” due process requires the county to notify “occupant” at the property address. Terry Holton bought a condominium in Kansas City (Jackson County), Missouri in 2004. Holton’s son lived in the condominium for three years and then Holton rented the property to tenants. Holton himself lived in Overland Park, Kansas, and never notified Jackson County of his address. Holton paid property taxes on the condominium until 2007 but paid no taxes for 2008 through 2011. In 2011, Jackson County foreclosed the property for unpaid taxes, and mailed several tax sale notices addressed to Holton at the Kansas City condominium address. All the notices were returned “not deliverable as addressed-unable to forward” or “attempted-not known-unable to forward.”
Jackson County tried to post a foreclosure notice on the property but the condominium building was locked, so the posting attempt was unsuccessful. A notice of impending tax sale was published in a legal publication serving Jackson County, Kansas City and Independence, Missouri, for four consecutive weeks. At the sale, the property sold for $30,000 to satisfy unpaid taxes of $743. Holton sought to vacate the judgment and set aside the tax sale deed. The trial court denied Holton’s motion, finding that the county complied with the notice requirements of the Missouri tax collection law. The appeals court reversed this decision on due process grounds, because due process “may require more action on the part of the notifying party than the statutory scheme requires.”
The appeals court relied on the Supreme Court’s Jones v. Flowers decision, 547 U.S. 220 (2006) [enhanced version available to lexis.com subscribers], which identified additional “available, reasonable and practicable” steps the government could take if mailed notice of sale was returned unclaimed. Among these steps was mailing a notice addressed to “occupant” at the property address. Jackson County argued that because the sale notice was published in the paper, it took an additional step. Holton argued that his name, address and phone number could easily be found on the internet, so the county should have been able to find and notify him. The Missouri appeals court rejected both arguments. Jones v. Flowers expressly laid out the option of a notice addressed to “occupant” at the property address. This was the “additional step” the county should have taken to satisfy Holton’s due process rights. If a letter had been addressed to “occupant” and not returned, the county would have been entitled to conclude that it was received. The Missouri court was unwilling to require the county to conduct an internet search for a property owner, particularly one who failed to provide his address to the county.
Foreclosure of Liens for Delinquent Land Taxes by Action In Rem v. Holton, 2014 Mo. App. LEXIS 28 (Mo.App. W.D., January 14, 2014) [enhanced version available to lexis.com subscribers].
Real Cases in Real Estate is a periodic update on real estate law, with legal principles illustrated and explained by lawsuits from around the country. The topics are wide-ranging for appeal to a broad spectrum of readers including lawyers, homeowners, investors and the general public. Andrea Lee Negroni, a Washington DC attorney and legal writer with 25 years of experience in financial services and mortgage law, contributes the case summaries.
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