Chatham hires legal firm to handle tax foreclosures

Posted Tuesday, March 4, 2008

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"It is always the very last resort possible to begin the process to foreclose on someone’s property to collect late taxes, and it will stay that way under the new procedures with Zacchaeus Legal Services," said Frances Wilson, Chatham County’s tax collector.

"We have used foreclosures as an option in the past, as authorized by state law, but existing staff has limited time and legal expertise to handle the volume of unpaid tax cases," Wilson added. "The selected firm specializes in tax foreclosures and can handle more cases than we are able to do."

Zacchaeus Legal Services currently provides the same services for eight other counties in the state, including Durham County.

Most county property owners pay their taxes on time and will not notice any changes," said Margaret Goldston, who has worked with foreclosures in the Tax Office. "One reason this issue is so important is because it is not fair to responsible taxpayers if others do not pay their share on time."

By the time the county reaches the point of taking action to foreclose on any property to collect unpaid taxes, the Tax Office has tried numerous times to collect the money owed, Goldston said.

State law requires several notices to the delinquent taxpayer, including a tax bill, a delinquent notice in the following year’s tax bill, a newspaper advertisement listing past-due taxpayers and a pre-foreclosure letter. The letter includes a specific deadline for paying taxes owed before foreclosure actions are begun.

Under the new arrangement with Zacchaeus, the same number and types of notices are required and past-due taxpayers have the same opportunities to pay their taxes before foreclosure proceedings begin, said Goldston.

The Chatham County Tax Office began looking at outside legal expertise because an attorney or legal firm can "initiate foreclosures a bit faster and the overall process is shorter," Goldston said.

Goldston noted that some foreclosure cases are very complicated and time-consuming. "A law firm can better sort out these complicated title issues."

Wilson adds, "We also think that getting a notice from an attorney instead of a county employee may be a better motivator to pay past-due taxes, so we may well see a higher tax collection rate. This could bring in more revenue so that less pressure is placed on the property tax rate. Everyone benefits when this happens."

By handling foreclosure cases in larger batches on a set cycle, the law firm can keep its overall costs lower, while also processing cases at a faster rate than the Tax Office could do on its own, Wilson said.

Another benefit is that the law firm is not paid up front by the county. "They are paid only when a foreclosure has been completed. Their fee and expenses are paid out of funds collected from the foreclosure sale," Wilson said.

Zacchaeus Legal Services will post a Notice of Sale in the local newspaper and in the County Clerk of Court’s Office. The notice will include sale dates for any properties listed in the county for foreclosure. The Tax Office will link to these sales dates on the county website whenever dates are posted.

The procedures and terms of any foreclosure sales will be the same as before, which is determined by state law, Wilson said.

Wilson said that the Tax Office used a formal request for proposals process to select the legal firm. The Board of Commissioners approved the two-year contract with Zaccheaus Legal Services on Feb. 18, 2008, but the firm will not begin handling county cases until April 1.

"We know that paying your taxes is not a fun or popular thing to do, but it is everyone’s obligation to pay their taxes," Wilson said. "We do our best to work with people who are having bad times and need some extra time to pay their taxes, but many people don’t let us know until it is too late."

She added, "We keep hoping to see the day that we won’t have any foreclosures to do. Maybe we will get there someday."