AUGUSTA — A law that aims to help elderly homeowners avoid tax foreclosure appeared likely to remain on the books for another year after lawmakers voted Thursday to hold off on revisiting the initiative led by former Gov. Paul LePage.
Last year, lawmakers passed a bill that lays out a long, multistep process that municipalities must follow before acquiring and selling homes from Mainers age 65 or older who are severely delinquent on their property taxes. Those steps include requiring municipalities to notify homeowners about options for assistance, to try to sell the home “at fair market” value, and to pay homeowners any excess proceeds after accounting for back taxes and fees.
LePage pushed hard for the bill after hearing about the case of an elderly Albion couple who lost their home to a municipal foreclosure. But municipal representatives said the Albion case was “mischaracterized” during last year’s debate and that the new law actually complicates towns’ ability to quickly sell properties back to the original owners.
Two bills introduced in this legislative session – one by a Republican and one by a Democrat – would repeal the law less than six months after it took effect. The bills were similar and were condensed into one measure.
On Thursday, members of the Legislature’s Taxation Committee voted unanimously to essentially shelve the bill until next year’s legislative session.
“It really needs to have some time to play out so we can actually see if it’s worth repealing or not,” said Rep. Bruce Bickford, R-Auburn. “In light of that, I’m going to ask that we give it some time to see how it works.”
LePage, a Republican, made the tax foreclosure bill a major priority of his final two years in office. A former Waterville mayor, LePage seized on the case of the elderly Albion couple, Richard and Leonette Sukeforth, who lost their longtime home to foreclosure.
Following standard legal practice for tax-acquired properties, Albion sold the Sukeforths’ home in 2015 for $6,500 after years of fruitless attempts to recoup the unpaid taxes. In addition to singling out Albion officials, LePage accused municipal officials in general of not doing enough to keep elderly Mainers in their homes, lambasted lawmakers for changing his bill and called the Maine Municipal Association “the enemy of the elderly in Maine.”
In testimony last month in support of the repeal bills, municipal officials stressed that they typically go to great lengths to avoid tax foreclosures, including in Albion, where the couple reportedly owed six years of taxes. Many towns reach out to family members of elderly residents, forgive unpaid taxes, offer to connect homeowners with other services and hold onto foreclosed homes in hopes that the former owners can eventually reacquire them.
They also said last year’s debate became politically charged and wasn’t based on the typical process that plays out before foreclosure. And the new law doesn’t reflect the fact that tax-acquired properties rarely sell for “market rates” because of their condition.
David Little, Bangor’s deputy finance director, testified during the Feb. 26 public hearing that all but a few of the city-acquired properties have been vacant and many involve unpaid taxes dating back six to 10 years. In one recent case, the city was owed 19 years worth of taxes. But that is less likely to happen if the current law remains on the books because towns won’t allow properties to be diminished in value “year after year after year,” Little told the committee.
“If the intent is to get money back, municipalities aren’t going to let people go a number of years,” Little said. “If at the time the lien is filed they are under the age of 65, (towns) are not going to let people hit that threshold so that these procedures kick in. It will just move people to the front of the line and make us deal with the mature taxes a lot faster, which I think is doing a disservice to how we are dealing with taxpayers now.”
As part of the new law, municipalities are required to notify homeowners of potential assistance through the Maine Department of Professional and Financial Regulation’s Bureau of Consumer Credit Protection.
Will Lund, superintendent of the bureau, said Thursday that his office has been contacted about 11 tax lien foreclosure cases since the law took effect last fall.
For several of those, the homeowners contacted his office too late in the process to provide anything but a “soft landing” for the individuals after the property was acquired by the town. But in several of the cases, his office or other groups – such as Pine Tree Legal Assistance or local “community action program” agencies – were able to help the homeowners.
“In several cases, when we had time to talk to folks and get them connected to a counselor, there were other services that could be arranged for” such as Social Security or heating assistance, Lund said. “So there may be some side effect of getting these folks talking with someone who is familiar with the different resources that are in place. The failure to pay taxes rarely happens in isolation.”
Asked if he believes the new law was helping, Lund replied “yes.”
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