In the box accompanying the same article, the telephone number for Appeal Forms and Filing Information was incorrectly reported by the D.C. tax office. The correct number is 727-1189. This is also the number to call for information on the March 27 taxpayer appeal workshop. An article in the March 11 edition of The District Weekly that dealt with delinquent property taxes mentioned the Neighborhood Housing Center as an agency that provides financial assistance to property owners. NHC is a part of Friendship House, located at 1529 Pennsylvania Ave. SE. Dorothy Kemp is the housing director. Her telephone number is 547-8880.
Glenno Williams didn't know that her $69,000 Southeast home had been sold by the city for $800.
Josie Pettus didn't know that the District government had sold her $60,000 Northwest home at a public auction to a buyer who paid $600 plus interest and penalties--the amount of an unpaid delinquent property tax bill.
Come March, as predictable as the icy winds, the District's Department of Finance and Revenue sends out property assessment notices, setting in motion a three-year tax process that last year cost 900 residents their homes. City officials say the numbers may be rising.
Misunderstandings, ignorance of the law, illiteracy, and the plain fright of opening a registered letter are reasons offered as to why property owners have been unaware that their homes were for sale at a tax auction. Bidders who simply paid the amount of the delinquent tax owed purchased their homes. Another reason may be a worsening economy: those who are on fixed incomes or unemployed just may be unable to pay their taxes or other fees.
"The process is confusing to many people who don't understand that they can lose their homes for nonpayment of a $29 water bill," said Dorothy Kemp, executive director of a private agency that rescued Pettus and Williams at practically the last moment.
"Taxpayers won't ask questions. They don't read. They throw things away. They don't listen. When they're like that, they lose their property," said Joyce Grogan, a staff assistant in the tax assessment office. Over the past three years, the number of District residents who have lost their homes has increased steadily, Grogan said, and the Department of Finance and Revenue has begun an outreach program "because these people need help when they lose their jobs, or when they're elderly, live alone, and can't read well."
Last week, assessment notices were delivered to 153,000 District households and commercial establishments representing a combined assessed value in excess of $17 billion. According to Al Richards, manager of the Department of Finance and Revenue's assessment services division, last year the number of delinquent properties jumped to 7,000 or 2.5 percent of all taxable properties after remaining fairly constant at 2 percent for the past 10 years. Richards blamed the economy, saying, "The number of hardship cases is amazing."
Although nearly nine out of 10 properties advertised for tax sale are redeemed by the owners, according to Richards, the number of properties lost by owners is steadily increasing: in 1979, 700 properties were lost; last year, 900 properties were lost by owners.
Many property owners, according to Kemp and Grogan, don't realize their delinquent property has been sold until they're served with an eviction notice.
The Neighborhood Housing Center (NHC), a Southeast community organization funded by local churches, monitors this procedure closely by poring over delinquent tax records, notifying property owners of an impending auction, and then lending money at 6 percent interest to pay off the debt. Nearly $1 million in tax sale properties were saved last year by Kemp and her agency's timely intervention into the lives of those either ignorant of the delinquent tax law or too strapped for cash to ante up.
"It was a miracle from God," says Glenno Williams of the time Dorothy Kemp contacted her. "Our house had been sold and it took Miss Kemp to tell us about it. We could have been thrown out in the street without ever knowing why."
With four months left to redeem her property, Williams borrowed $800 from NHC and paid off her 1980 delinquent tax bill last October. Tax bills had been sent to Williams' elderly and ailing widowed mother, Gertrude Joshua, who either misplaced or ignored them.
"It's an overly familiar story--the husband dies, it takes the wife three or four years to master household finances, and by that time the house has been sold at a tax sale," said attorney Paul Taulose, who has represented widows attempting to reclaim their homes after a tax sale.
"I couldn't handle a $600 tax bill," recalled Josie Pettus, who lives on a $314 monthly social security check. "After paying utility bills and the cost for repairing water pipes that burst twice, I have barely enough left to buy food. While I was trying to figure out how to pay my taxes, they sold my house," she said. Because of her hardships, Pettus has not been able to make any payments on the $600 loan from NHC. But "they don't hassle you, those people," she said. "They're beautiful."
Pettus, Williams, Joshua and countless others fell through the cracks during the District's fiscal tax year that runs from July to June. Failure to respond to any of the four notices sent out during that period resulted in their homes being put up for tax sale.
The first tax bill, based upon the assessment figure mailed out last week, will be sent out in August. It will be for half the total tax and is due by Sept. 15. After that date, the amount accrues interest and penalty charges at the rate of 1 percent a month. If the amount is paid after that date and the interest and penalty charges are not paid, a property may still be sold at tax sale for those charges. The second tax bill, asking for the other half of the amount due, goes out in February and is due by March 31. (Those who wish to make quarterly payments must contact the Department of Finance and Revenue by May 1.)
If those bills are ignored, a delinquent notice for the total payment is sent in June. Another notice is sent in November stating that the property will be advertised for tax sale, but does not specify where or when the tax auction will be. The properties are advertised in The Washington Post's classified section on the third Saturday in December. But if the owner does not see the ads he will not know the time, date or place of the auction.
The public auction held in January is open to all bidders. For prices ranging from $29.33 to a couple of thousand dollars, bidders may purchase a property by paying the outstanding tax bill. The city issues a certificate of sale to the buyer redeemable at the end of two years. If the property owner hasn't paid the bill during that period, the certificate holder gets the property.
Until last year, the property owner did not receive any city notification during this redemption period until 30 days before the time expired. At that time, a certified letter would be sent to the property owner warning him of the short amount of time left to pay the bill. "By statute, we don't have to send this letter; this is a courtesy letter," said Joyce Grogan.
Grogan launched her "outreach" program last July by sending 1,500 letters by regular mail informing property owners they had five months left to redeem their property. "We got a good response; people had more time to get the money together, and they were more receptive to the regular mail," Grogan said. "Registered mail scares some people into thinking about tragic news, so they don't accept it."
Kemp, a harsh critic of the delinquent tax procedure, augments Grogan's outreach project by copying the names of all people who have one year left in their redemption period. "It takes nearly a month to copy all the names from their ledgers. It's exhausting work." Kemp has done this for two years and she claims that the hundreds of people she contacted were unaware that their houses had been sold.
"The city obviously is not getting through to great numbers of people," she said. Kemp feels that the elderly, the handicapped, and all households at or below a certain income should be exempt from property taxes.
Kemp believes the city notices are unclear about the intention of a tax sale and that the two-year redemption period is too long. "People forget when notices are not forthcoming. It should be tightened up to one year and the city should double the number of its notices," she said. Kemp is especially scornful of the auction process. "It's awful; speculators show up with thousands of dollars and buy up dozens of properties for a song. Those people are vultures," said Kemp.
"People need more information, they need to be reminded to fill out their Homestead Exemption forms annually so they can qualify for a $9,000 deduction from their assessment," she said. "The city should do more. There is no reason why so many people should be losing their homes."