Courthouse is last safeguard for D.C. homeowners struggling with tax liens

The Scotch-taped sheets listing the day’s cases cover nearly half the door to Room 519 in D.C. Superior Court. On the list of 105 cases, the plaintiffs are frequently the same, as are the lawyers.

Wednesday is tax lien day here. In a courtroom off a quiet fifth-floor corridor, a judge handles the aftermath of the thousands of property tax debts auctioned off by the city in recent years. The courthouse is the last safeguard in a system, a Washington Post investigation revealed, that has seen residents lose their homes for tax debts of no more than a few hundred dollars.

This series: Homes for the taking

Homes for the Taking

Homes for the Taking

The Washington Post carries out one of the first comprehensive studies of tax lien sales in the country.

“We’ve got a pretty full calendar today,” Magistrate Judge Joseph E. Beshouri tells the courtroom, already swelling with lawyers and property owners, shortly after 10:30 a.m. “I thank you in advance for your patience.”

A deputy director of the Office of Tax and Revenue is on hand, equipped with a laptop with direct access to city tax records. An official from the Department of Consumer and Regulatory Affairs also is here to handle any disputes over the classification of property as vacant or blighted, which can have a dramatic effect on tax bills. And a bow-tied lawyer from the attorney general’s office stands at attention, prepared to cancel a lien sale if the circumstances warrant.

Pro bono lawyers, including those from the AARP Legal Clinic for the Elderly, are on hand to help property owners navigate what can be an intimidating process.

The cases are, with few exceptions, disposed of within minutes.

Sometimes the properties are “redeemed” — meaning the owners have paid the back taxes, plus interest and attorneys’ fees — and the cases are dismissed. In others, the owners do not appear — as in the case of a vacant Brookland lot owned by a Bowie resident and carrying a $77,833 tax bill.

More often, the property owners need more time to come up with the money needed to clear title, or there are other complications, such as a pending bankruptcy or problems serving notice to an owner.

In those cases, Beshouri gives the parties more time — a few months, typically — to work things out.

On several occasions Wednesday, homeowners told Beshouri they had satisfied their unpaid tax bills but had yet to pay off the legal fees tacked on after a sale.

The fees were the major driver behind the loss of the homes detailed in the Post’s investigation, and theD.C. Council is scheduled to vote Tuesday on a measure that will limit attorneys’ fees to $1,500 per case.

Two brothers appeared before Beshouri, defending a home near RFK Stadium that had been in the family since the 1950s, now owned jointly by four siblings. A tax debt of $1,963 grew after more than $3,500 in legal fees were attached.

“I understand they charge by the hour, but I’m sure they’re not spending three or four hours a day on this case,” said the younger brother, 58, who spoke on the condition of anonymity because he did not want to publicize the family’s tax debt. “They’re charging more because they think they can get it.”

Another woman, a 58-year-old Capitol Hill resident who spoke on the condition of anonymity for similar reasons, mentioned the Post series to Beshouri. About $3,400 in legal fees were added to her original tax bill of roughly $2,500, she said.

“It’s very, very scary when they put that yellow sticker on your door and you don’t know what’s coming,” she said. “It’s a problem when the fees are as high as the original tax. . . . Something needs to be done.”

When faced with a fee dispute, Beshouri encourages the parties to work the matter out among themselves, with the help of a court-appointed mediator if necessary.

Beshouri declined, through a court spokeswoman, to comment on how he handles attorneys’ fees or his docket more generally, but attorneys representing both lien-buyers and property owners praised his handling of the cases.

Paul Hunt, a lawyer who frequently represents lien buyers, said the system works well in the majority of cases. Those appearing most often as tax-lien defendants are developers who have not paid their taxes for business reasons, he said, and the auction process is the most efficient way to put properties back to productive use.

“This process is part of community development, strange as that may seem,” he said.

Most lawyers who practice in Room 519, Hunt said, are conscientious about who owns the properties they deal with, helping bona fide homeowners navigate the system to get their properties back.

“If we get the little old lady, we’ll continue it, and we’ll never ask for judgment,” he said.

But Hunt acknowledged that legal fees can be excessive for cases that are “a little bit procedural in nature.” Higher fees can be justified in more complex cases, he said, such as those with multiple defendants or requiring complex title research.

One case heard Wednesday seemingly contained all of those elements — a complex legal situation, rocketing legal fees and a family home in the balance.

Muriel Oliver, 64, and son Brian Oliver, 45, stood before Beshouri trying to save a home on Kennedy Street NE that has been in the family for nearly 50 years. After the matriarch of the family died, they said, the home was placed in a trust. With the property no longer eligible for tax exemptions for seniors and owner-occupiers, tax bills skyrocketed, and the family fell behind after Brian Oliver lost his job.

The tax bill of $3,391, including interest and penalties, was sold last year to a bank. Now, the fees total $12,000 and counting. To pay the bills, the family hopes to get a loan secured by the property, but the bank won’t sign until title is transferred away from the trust — requiring the location of long-lost documents.

Beshouri gave the family until January to get the financing in place. Brian Oliver said afterward he was hopeful he would be able to save the family home, but said he felt overwhelmed by the system.

“I’m disappointed in the city,” he said. “It’s hard to see people lose their homes, see the greed that’s taking place.”

 
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