The Perils of Not Paying Property Taxes In Massachusetts Illustrated In Bourne Case

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The heir of a home owner who didn’t pay full property taxes for a year can’t get the property back now that the town has foreclosed on it, the Massachusetts Appeals Court ruled Friday.

Nor does the heir get anything from the value of the house and land – even though the tax bill arrearage amounted to a little more than a thousand dollars.

Leona Warsowick owned a house at 34 Diandy Road in the Sagamore Beach village of Bourne from 1985 until she died in 1997. Her son, Robert Regan, lived there and paid property taxes on it for 14 years without incident, but never filed in probate court to have the title to it transferred to him.

In 2015, Regan, who was sick with chronic obstruction pulmonary disease and had stopped working, made a partial payment but didn’t pay the tax bill in full. In February 2016, the town moved to take the property for non-payment of taxes — $899.28 in real estate taxes, plus $48.79 in interest, $18.45 in certified public accountant fees, and $38.70 in unpaid water district fees, for a total of $1,167.44.

Regan died in December 2018, about five months after trying to make a partial payment but getting rebuffed because the town had already taken legal possession of the property, according to court papers. Regan’s cousin and heir, Francis Coffey, has been trying since then to regain title to the property.

Massachusetts state law allows the government of cities and towns to begin foreclosure proceedings after six months of unpaid property taxes, although many towns choose not to exercise that option for significantly longer than that. Former property owners can “redeem” their property by paying the taxes due plus interest and other costs. “If the taxpayer does not respond or fails to redeem the property, the taxpayer risks judgment foreclosing the right of redemption,” Appeals Court justice Eric Neyman wrote in the court opinion published Friday, August 12.

At that point, vacating a foreclosure is at a court’s discretion. The deadline to ask is one year after the foreclosure is completed, unless the person asking for a vacating of the decision can show a denial of due process.

Several months after Regan died, a Massachusetts Land Court recorder denied his heir’s motion to vacate the town’s taking of the property, finding that evidence submitted of Regan’s illness was scarce and that Regan had declined to participate in the foreclosure proceedings even though he was able to do so.

“The court was not, and is not, convinced that the high bar set for showing entitlement to the extraordinary relief of vacating a judgment has been met here,” wrote Land Court recorder Deborah J. Patterson, in a court order dated May 11, 2021.

The Land Court decision led Coffey to appeal to the Massachusetts Appeals Court. The Appeals Court is one step below the Massachusetts Supreme Judicial Court, which could eventually hear the case if Coffey appeals it further.

At stake is whether Coffey gets anything from his late cousin’s property.

A taking by “strict foreclosure” for back taxes by a town is not like a foreclosure by a bank, because when the town forecloses on a property it gets full title and doesn’t owe the former property owner anything, even if the property is eventually sold for more than the former property owner owed.

The Massachusetts Supreme Judicial Court described the difference between foreclosure by a bank and “strict foreclosure” by a municipal government in an August 2020 case called Tallage vs. Jessye L. Williams:  “Strict foreclosure … does not involve any type of sale; rather, the foreclosure judgment extinguishes the taxpayer’s remaining interest in the property — the right of redemption — and converts the municipality’s or third party’s tax title into absolute title. … Consequently, after a strict foreclosure, the taxpayer loses any equity he or she has accrued in the property, no matter how small the amount of taxes due or how large the amount of equity.”

In the Bourne case decided Friday, the Appeals Court justice noted in a footnote how large the disparity can be between what the property owner owes and what the town gets.

“The instant case illustrates this point. At the time the tax taking was executed, the total sum owed to the town was $1,167.44, while the property was valued at $258,000,” Neyman wrote.

In other words, the amount of property taxes, interest, fees, and costs owed to the town in the Bourne case was about 45 one-hundredths of 1 percent of the estimated value of the property. But the estate of the former property owner lost it all.

“We acknowledge the potential harshness of the statute as applied in certain circumstances.  We are not the first court to do so,” Neyman wrote for the Appeals Court.

The current estimated value of the house on Zillow is $300,800.

A lawyer for Regan’s cousin and heir decried the town’s actions in a brief filed with the Appeals Court.

“The prospect of realizing such a windfall is not foreign to the Town. The Town has made a cottage industry of funding its budget through tax takings and foreclosures,” wrote the heir’s lawyer, Nicholas Shapiro, of Phillips & Angley, a law firm in Boston.

Bourne town officials tell a different story. In a brief filed with the Appeals Court, lawyers for the town said the Bourne’s board of selectmen was willing to work with the heir even after the town formally held title to the property, but that Coffey did not prove he was the heir to the property in a timely fashion and did not pay the outstanding balance.

The town’s brief suggests that Coffey couldn’t afford to pay. By June 2018, the outstanding balance on the property had ballooned to $15,859.89. By October 2019, the balance had zoomed to $29,943.56, according to the brief filed on behalf of the town.

“The Town was more than fair with Mr. Coffey. It was under no responsibility to entertain Mr. Coffey’s request to redeem. It owned the Property and was incurring insurance expenses,” states the town’s brief, filed by David J. Coppola and James E. Coppola Jr., of Coppola & Coppola, a law firm in Marblehead.

The state Appeals Court upheld the Land Court’s decision not to vacate the foreclosure. While he was alive, Regan could have affected the outcome of the foreclosure even if he didn’t have the money to pay the tax bill, the Appeals Court decided.

In a footnote, Neyman, the Appeals Court justice, wrote:  “Inability to pay the redemption amount may ultimately lead to foreclosure of the right of redemption but it does not prevent a party from participating in the proceeding. For example, even if Regan could not afford to pay the redemption amount, he could have made an offer to redeem and sought an order granting him additional time to make the redemption payment.”

The case is Town of Bourne vs. Francis J. Coffey.  It was decided Friday, August 12, 2022.


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