Left in the dark

Left in the dark

Despite warnings, D.C. tax office’s address records found rife with errors, preventing bills and critical notices from reaching homeowners

Published on October 11, 2013

For Josefina Castellanos, it was a simple request to the D.C. tax office: Send the property tax bills for her rental home in the District to her new house in Virginia.

But the mail never came.

Instead, the tax office sent her bills to a wooded lot across from a strip shopping center five blocks away. By the time she discovered the mistake in 2010, a tax lien investor was already moving to foreclose in court.

Above: It took nine months for Bill Black to discover the tax lien sale on his D.C. home because tax officials had mailed the bills to Iowa.

 

HOMES FOR THE TAKING:
LIENS, LOSS AND PROFITEERS

Part 1: How a small debt becomes a big problem

Part 2: Suspicious bids go unnoticed in D.C.

Part 3: D.C. tax office mix-ups put homes in peril

More from the series

“Think about this: I was about to lose my house,” she said. “You trust the government to do the right thing.”

Despite warnings from internal auditors, District tax officials are using property records riddled with errors, preventing bills and critical notices from reaching owners who have fallen behind on their taxes, The Washington Post found.

Using the agency’s address records, The Post mailed notices to more than 1,800 delinquent property owners this summer and found that nearly 400 — one in five — were returned as undeliverable. In some cases, the tax office had incorrect house numbers or missing unit numbers. In other cases, the owners’ primary mailing addresses were long out of date.

All of the owners had liens on their properties for sale at the July auction, with 171 sold on those with flawed addresses.

I find it appalling,” said D.C. Council member David Grosso (I-At-Large). “How does the government operate like this? You have an obligation as a government to make your data as clean as possible, especially when you are taking someone’s house.”

City leaders are pushing to reform the District’s century-old tax lien program after a Post investigation found that private investors had bought up liens, charged struggling homeowners thousands in fees, and then took the homes when the owners could not pay.

Tax office chief Stephen Cordi has said the agency routinely reaches out to distressed homeowners through newspaper ads and multiple bills and warnings mailed before and after liens are sold at auction.

Stephen Cordi of the D.C. tax office says multiple bills and warnings are mailed to distressed homeowners before and after liens are sold at auction. (Lois Raimondo / The Washington Post)

But time and again, property owners have said they learned about the liens on their homes only after investors filed to foreclose in court, with interest and legal fees mounting.

“I never received any notice whatsover,” said Bill Black, a communications consultant, who discovered that the tax office had sold a lien on his Southeast Washington home last year after he received a court summons.

Turns out, the tax office had been sending his bills and notices to Waterloo, Iowa, the location of a mortgage company that Black hadn’t used in a decade. “I was flabbergasted,” he said. “I feel very lucky that I was able to resolve the problem without losing my house.” (Black did freelance writing for The Post in the 1980s.)

Tax officials said that bills are posted online and that they have recently made improvements, such as putting bar codes on mail so it can be easily tracked, searching for alternative addresses in public records and updating addresses with forwarding information from the post office. The Office of Tax and Revenue “is employing new technology to update its address records to ensure that taxpayers have the information needed to meet their tax obligations,” spokeswoman Natalie Wilson said in an e-mail.

But The Post found that hundreds of addresses on file at the tax office were still faulty as of two months ago.

Of the mailings sent to 1,816 delinquent property owners, 393 were returned as undeliverable. About half the properties with bad addresses were in some of the city’s most distressed neighborhoods, such as Deanwood, Bellevue and Marshall Heights, The Post found.

The tax office sold liens on 171 of the properties with bad addresses, records show.

In an e-mail, Wilson said only 17 of those liens were on primary residences and that 12 of the owners had been in contact with the agency, indicating that they received notices or learned about the sale from the office’s Web site or in newspapers.

Where flawed addresses expose property owners to foreclosure threat

22%

faulty owner mailing addresses. That's 393 of 1,816 properties researched by The Post.

171

tax liens with flawed addresses were sold.

Areas with the most faulty
owner addresses

48

Deanwood, Burrville, Grant Park, Lincoln Heights, Fairmont Heights

40

Congress Heights, Bellevue, Washington Highlands

30

Capitol View, Marshall Heights, Benning Heights

Flawed owner addresses in 2013 tax lien auction

  • Residential
  • Commercial and other
  • Vacant
  • Sold at the auction

NOTE: Investors who buy tax liens can seek to seize the property and owner equity after a six-month waiting period. SOURCE: Post analysis of data from D.C. Office of Tax and Revenue. GRAPHIC: Ted Mellnik, Emily Chow, Laris Karklis, Scott Clement, Peyton Craighill and Steven Rich — Washington Post.

The problem isn’t new: The tax office was warned four years ago that thousands of addresses in its database were “either missing, incorrect or badly formatted,” according to an e-mail from the city’s technology office, which was contained in an audit obtained by The Post.

“The large number of faulty addresses is causing significant problems for residents and businesses and the D.C. government,” David Jackson, an information technology specialist in the Office of the Chief Technology Officer, wrote in 2009.

The audit

The D.C. Office of Integrity and Oversight warned the city's tax office about bad addresses in its mailing database

Click on the image to read the audit.

Two years later, the tax office was warned again about bad addresses by internal auditors, who sent an alert to Cordi that the 37,000 pieces of mail were returned on average each year out of about 600,000 property assessments and bills mailed to taxpayers.

Among other things, auditors pointed out that the tax office did not check addresses against the city’s master address repository.

City officials had spent years building the database. “It was built to give every agency access to clean addresses,” said Barney Krucoff, who ran the program and is now the geographic information officer for Maryland.

In response to the 2011 audit, Cordi promised changes, saying he would authorize an “address cleaning process.”

Two years later, problems persist.

Tom DiGiovanni, who works for an education company, said he discovered a lien had been sold on his Northeast Washington property in July from a law firm asking whether he needed legal assistance several days after the auction.

“I didn’t know who bought my lien and if I owed them anything,” said DiGiovanni, who immediately paid his $1,400 tax bill. “I’m no dummy, but it’s like a black hole if you don’t know how all this operates.”

Kevin Malone, a former federal auditor, said he was floored when he happened to spot his name in the newspaper shortly before the 2011 tax sale, indicating that he was delinquent. He rushed to pay the bill a week before the sale, but the tax office sold the lien anyway, and then later canceled it, calling it “an administrative error,” records show.

“There was zero notification — no communication,” he said. “It’s infuriating. The government is supposed to protect the public. That’s what data systems are designed to do, to make sure information is accessible and credible.”

The tax office had old addresses for both property owners, The Post found.

Agency officials said it is ultimately the responsibility of property owners to provide updated mailing addresses. But Castellanos said that her bills were sent to the wrong address even after she wrote to the tax office.

She said she sent the change of address to the tax office in 2004 — including her e-mail and phone number, court records show. Castellanos continued to make some tax payments on the house in Northwest, but realized she wasn’t paying the proper amount when she received a court summons from an investor who had bought a lien against her home for $7,604 in back taxes and interest.

Castellanos hired a lawyer and challenged the case in court. The tax office ultimately cancelled the lien, and Castellanos paid her back taxes.

“For the government, that’s the basics — the proper name, the proper address. If you’ve got that wrong, it doesn’t matter what else you do,” said Castellanos, who was dismissed from the case in 2011.

Other jurisdictions have taken steps to deal with bad addresses.

When mail is returned in Fairfax County, officials try to reach homeowners by phone, tax director Kevin Greenlief said. Howard County, among other things, hires runners from title companies to track owners. In Hartford, Conn., tax collector Marc Nelson said he compares addresses on returned mail to the agency’s motor vehicle records.

“Government is not on the other side of this divide,” he said. “The law says the burden is on the taxpayer, but that law does not relieve me as the tax collector of doing everything I reasonably can.”

On Oct. 17, D.C. Council members are scheduled to discuss permanent tax lien legislation, including caps on the fees that investors charge to homeowners. But Grosso said any improvements should include a cleanup of tax office records.

“You can’t talk about giving people notice if you haven’t gotten the right addresses,” he said. “We’ve got to modernize this system.”

Ted Mellnik, Jennifer Jenkins, Scott Clement and Peyton M. Craighill contributed to this report.

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