HomeMy WebLinkAboutAgenda - 09-06-2022; 8-f - Resolution Regarding In Rem Foreclosure 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: September 6, 2022
Action Agenda
Item No. 8-f
SUBJECT: Resolution Regarding In Rem Foreclosure
DEPARTMENT: Tax Administration
ATTACHMENT(S): INFORMATION CONTACT:
Resolution Nancy T. Freeman, Tax Administrator,
September 6, 1983 BOCC Agenda Item (919) 245-2735
D7 - In Rem Foreclosure
Excerpt from September 6, 1983 BOCC
Meeting Minutes
NCGS 105-375
NCGS 105-374
PURPOSE: To approve a resolution confirming the authorization made by the Board of
Commissioners in 1983 to allow the Tax Collector to pursue In Rem Foreclosure proceedings to
collect delinquent property tax, pursuant to North Carolina General Statute (NCGS) 105-375, in
addition to the option to use Mortgage Style Foreclosure pursuant to North Carolina General
Statute 105-374.
BACKGROUND: At its September 6, 1983 meeting, the Board of County Commissioners
approved a request to authorize the Tax Collector to implement the In Rem Foreclosure method
according to NCGS 105-375 — as an alternative to the Mortgage Style Foreclosure method
outlined in NCGS 105-374. Since that time, the Orange County Tax Collector/Tax Administrator
has almost exclusively used In Rem Foreclosure as a method to collect taxes. Mortgage Style
Foreclosure pursuant to NCGS 105-374 is reserved for more complex properties, as determined
appropriate by staff. Copies of NCGS 105-375 and NCGS 105-374 are attached.
During a recent internal review, the Department discovered that although the Board of
Commissioners approved the use of the In Rem Foreclosure method in 1983, a formal Resolution
was not signed. The Department is requesting the approval of a formal resolution to continue this
practice. Agenda item D7 and an excerpt of the approved minutes from the September 6, 1983
meeting are attached for reference. Pages 3-4 of the approved minutes (pages 11-12 of this
agenda item) provide information on the 1983 unanimous vote of approval.
In Rem Foreclosure method is used for the vast majority of foreclosures initiated by the Tax Office,
due to the lower overall cost to the property owner, and general expediency in the process.
For further clarity, the Tax Collector does pursue all other enforced collection remedies under the
North Carolina General Statutes, including attachment and garnishment or levy and sale, prior to
beginning any tax foreclosure.
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The In Rem Foreclosure process includes an extensive title search, notice to all owners and
lienholders, docketing a judgment with the Clerk of Court, and sale of the property at public auction
after a three-month waiting period. The Sheriff conducts the sale of the property at the Orange
County Courthouse, a report of sale is filed with the Clerk of Court, and the upset bid period
begins. Once a successful upset bid period has expired, and the Tax Office receives payment in
full from the high bidder, the high bidder receives a non-warranted sheriff's deed.
FINANCIAL IMPACT: There is no financial impact associated with this item.
SOCIAL JUSTICE IMPACT: There is no Orange County Social Justice Goal impact associated
with this item.
ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal
impact associated with this item.
RECOMMENDATION(S): The Manager recommends that the Board approve and authorize the
Chair to sign the attached resolution.
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NORTH CAROLINA RES-2022-047
ORANGE COUNTY
ORANGE COUNTY BOARD OF COMMISSIONERS RESOLUTION
AUTHORIZING ORANGE COUNTY TAX COLLECTOR TO USE THE IN REM FORECLOSURE
AND MORTGAGE STYLE FORECLOSURE IN COLLECTION OF DELINQUENT PROPOERTY
TAX PURSUANT TO NORTH CAROLINA GENERAL STATUTE SECTION 105-375 AND 105-374
Whereas,we believe that it is important for all property owners of Orange County to recognize
their responsibility to timely pay their fair share of ad valorem taxes;and,
Whereas,in the interest of equity and fairness,it is the intent of the Orange County Board of
Commissioners to ensure the collection of delinquent taxes;and,
Whereas,Under North Carolina General Statute 105-375 of the Machinery Act,In Rem
Foreclosure is intended to provide,as an alternative to Mortgage Style Foreclosure,a simple and cost
effective method of enforcing payment of delinquent taxes;and,
Whereas,this Board desires that the Tax Collector use all means legally available,including In
Rem Foreclosure and Mortgage Style Foreclosure to collect delinquent taxes for the benefit of all residents.
NOW,THEREFORE,BE IT RESOLVED,that the Orange County Board of Commissioners
hereby authorize and instruct the Orange County Tax Collector to pursue collection of delinquent taxes by
In Rem Foreclosure as set forth in NCGS 105-375 and mortgage-style foreclosures as set forth in NCGS
105-374.
ADOPTED this the 6th day of September,2022.
Renee Price
Chair,Board of County Commissioners
WITNESS my hand and the corporate seal of said County,this day of
2022
Clerk to the Board of Commissioners
4
OWGE 00=
BOAM op amssiowms Acticn Agenda
ACTION AGMMA ITEM ABSTMCT Item No.
Subject: IN REM FORE-CLOSURE
REVENUE Publicfk-ar
2es X
Attachirent(s) Infoximtion Contact:
COPY OF G.S. 105-375 and work sheet JOHN T. HORNER
Phc)ne Nmber: 7328181 ext. 432
PUFPME: To contider, authorizing the Department of Revenue to implement the "in rem
foreclasur6 method" according to G.S. 105-375 as an alternate to the mortgage
type foreclosure method (G.S. 105-374)
NEED: In rem is ai, slmple -aad inexpensive method of enforcing payment -of`tAkes
necessarily'llevid, for the requirement. It is based on the recognition
that all peisons onwing interests in real property know or should know
what the tax lien on their real property may be forclosed and the property
sold for failure to pay taxes. . It allows the Tax Collector to foreclose
on real estate properties through an administrative procedure rather
than havingithe work performed by an attorney. While the method is based
on all properties, it is especially useful on properties where the values
are two small to justify the high expense intailed in the traditional
mortgage foreclosure method.
A copy of the procedural --steps to be followed is attached together with a
sample letter to the property owner and a list of the costs to be billed
to the deli"quent taxpayer in processing the foreclosure to date of payment.
DVACT: Return inactive real estate accounts to the active role.
RECOMMENDATION'
Approve',the pin rem foreclosure method and direct the Tax Collector to
initiate pro!cedures by filing the Certificate of Taxes Due with the
Clerk of Sup!prior Court.
5
442
;lice
sion Part 11
FORMS FOR USE
IN A FOREi:;LOSURE ACTION
UNDER G.S.'
105-375
it he
14g.
!for An alternative method of foreclosure to the mortgage type Of foiedosure is
is as made available to taxing units by G.S. 105-375.This is thein rem methodof
foreclosure,and it is a relatively simple and inexpensive means of foreclos.
ing the tax lien and selling the property, thereby returning the property to
the 'active tax rolls. The legal theory underlying the in rem method of
foreclosure is that the land itself—the res—is being proceeded against,
I
rather than the landowner.It is upon this theory that the summary notice
procedures are justified.
There are two prerequisites to use of"the in rem procedure-.The ta g
xin
unit must have held a sale of tax liens as required by G.S. 105-369,and the
I
hat r---vverning board Of,the-taxing unit must direct,thetax-collectorAo-file-taxes
)y a Certificates;,as judgments;-thereby beginning the in rern
foreclosure.Notice
1
of the docketing of the judgment is required to be sent by registered orcer-
tified1mail to the listing taxpayer at his last known address.After the judg-�
meat has been docketed for six months,
I execution maybe issued on-the judg-
meat and the property sold under execution.Notice must be mailed to the
listing taxpayer at the time execution is issued.It is not necessary that the
taxpayer and other persons who may have an interest in the proper,ty receive
actual notice of the foreclosure action.Notice is mailed to lienholders only if
they have filed a request for such notification with the tax collector.
By adding appropriate allegations, the in-rem procedure can be used to
foreclose the liens of special assessinents.17
It is not within the scope of this introduction to defend or attack the con-
stitutional validity of the in rem method of foreclosure. The decision in
Hendiison County v. Osteen(1977),18 however,went a long way toward es.
tablishing theposition that in rem foreclosures are constitutional if con.
ducted strictly in accordance with the statute.The lesson of that case and of
its successor's is that every required step called for by G.S. 105-375 must be
taken and documented. A record of every step taken should be made, and
copies df all significant documents should be placed in the file.
Foreclosure History
6
I
0 4�
I
FORECLOSURE HISTORY
NAME TAX MAP NUMBER
iDATE
TAX SALE DAiI'E �
1
MED OF TRUST SEARCH ( G monfih3 prior to judgement)
IETTER TO TAXPAYER ( 4 months after true lien sale)
LETTER TO MD OF TRUST-HOAR
I
REQUEST TO COUNTY COMSSIGNER5 (5 months atter TLS)
S .
CERTIFIED TETTER TO TAXPAYER
c,'tY 3O dura prior to jud�e,'ment)
ADVERTISMENT (once: a creek for 2 keeke beginning 18
deye after nonreciept) '
DOCKET JUDGFJ ENT (6 manors after TIS)
MAIL COPT OF JUDGEMENT.
ATTEMPT FERSDNAL CONTACT ( 4 months after udgejwnt)
3
' LETTER INFQR4ING OF EXECUTION ( 5 montbe after judgement)
V, REQUEST FOR }E MCUTION ( 6months after Judgement) �..
SHERIFF DELIitERX OF EXECUTION �.
I _
HAIL COPY OF(EXECUTION
CERTIFIED LETTER INFORMING OF MCUTION { 7 days prior to sale)
rADVERTISE FOR 4 WEEKS.
PLACE I'OR SAIF SIGN ON PROPER Sf IF CERTIFIED NOT RECIEVED
BOLT) SAIE
REPORT OF SAIF
. l
REPORT OF UPSET BIT}
- ORDER OF RFSAIE
ADVERTISE RESALE ( 2 weeks)
3
REPORT OF MS41E
ORDER TO ISSUE DEED � ��
7
M E M 0
TO: Orar I ige County Board of County Commissioners
FR ' I
OM.John T. Horner, Director of Revenue
REF: In Rem Foreclosure
i
The attached letter will be mailed to each Taxpayer
i
who has delinquent real estate taxes due the County
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of orange for years 1982 and prior. This letter preceeds
I
The In Rem Foreclosure proceedings .
8
ORANGE COUNTY DEPARTMENT OF REVENUE
208 SouTH CAwRor4 STREET
HULUBOROUGK NORTH CAROLINA.27278
JOHN T.-HORNER i August 16, 1983 Ph- Hillsbo"xq*732-8181
Mow of Reow j Chapel HM 967-9251
Mebane 227-2031
Durham 688.7331
Dear Bill Jon6s,
Taxes levied upon property owned by you for the years
and in the amount listed below are past due and unpaid. The
amount shown #does include. interest to date.
YEARS: AMOUNT,DUE:
1980 & 1982 81-7
_j
TAX MAP NUMBER:
20!-`B, 4A
.7
'me
At then Mi 11 et fnd,of the County
— t a
Ccmmissionersi I- wi I I 'request 'pe rmitsiran to enter judgement
in the Superior Court and sell your property for the taxes
due.
Very truly yours,
John T. Horner
Director of Revenue,
Tax Division orange County
JTH/rwt
9
i COSTS BILLED THE DELINQUENT TAXPAYER
-FOR"FROCESSING FORE-CLOSURE
• FORECLOSURE COST FROM MAILING OF FIRST LETTER THROUGH
FILLING OF THE JUDGEMENT
EMPLOYEE ' TIME (approx.)
hours ($6 .35 per hour) $ 31- 75
PRINTING & SUPPLIES .7.00
TOTAL $ 38- 75
2. FORECLOSURE COST FROM FILLING OF JUDGEMENT THROUGH
SALE IAND RECORDING OF DEED
EMPLOY!EE'S TIME (approx. )
iOk hours ($6 .35 per hour) $66 .68
i
PRINTING & SUPPLIES $10 .00
TOTAL �76-38
COST ER CERTIFIED LETTER $ 1 .65
Before judgement and before executuion
(list'ng taxpayer, current- all lienholders
of record)
cord)
4. CLERK OF COURT FEES FOR DOCKETING OF JUDGEMENT AND
EXECUTION, SHERIFF' S FEE AND ADVERTISING COST PLUS
COST O� ALL CERTIFIED LETTERS WILL BE BILLED THE TAXPAYER.
5. ANY ATTORNYE ASSISTANCE
6. ANY INTEREST ON THE PAYMENT DUE
10 S2�
1
MINUTES
September 6, 1983
The Orange County Board of Commissioners met in regular session on Tuesday,
September 6, 1983 at 7:30 P.M. in the Commissioners Room of the Orange. County
Courthouse, Hillsborough, North Carolina.
Commissioners Present: Richard E. Whitted, Chairman, and Commissioners Ben
Lloyd, Shirley Marshall, Norman Walker and Don Willhoit.
After the completion of one item,on the agenda, the meeting continued in
the Superior Courtroom.
with pleasure, the Honorable Ed Renfrow, Auditor with the State of North
Carolina, presented a Certificate of Conformance award to Orange County for its
1
outstanding reporting achievements, and commended the County for demonstrating
such high principles. This award had not heretofore been received at the state
level. The award was presented to Chairman Whitted, who in turn presented the
award to Mr. Wallace Harding, Finance Director. Mr. Harding recognized his
staff and members of the ToucherRoss Auditing Firm for a job well done.
A. BDARD_ COMMENTS
Commissioner Whitted added an announcement. Commissioner Lloyd added a
brief discussion on zoning. The County Manager, Ken Thompson asked the Board
to postpone item D-9.
B. AUDIENCE COMMMU,%
1. Matters on the printed agenda.
There were no comments.
2. Matters not on the printed agenda.
There were no comments.
D-1 Pnhlje Comment gn 2rQ2gSP.J_AniWa1 Qrdi= �P _AIllendmentis
Mr. Robert Greenberg spoke on behalf of the Board of Directors for the
Animal Protection Society of Orange County. The Board strongly supports the
strict Animal Control Ordinance as presented with two items of concern: (1)
omission of adequate shelter as a necessary protection for animals; and (2) a
civil penalty of $25 comparable to fines of other jurisdictions.
Mr. Gene Cole, a resident of the southeastern part of Orange County, stated
that he has problems with dogs roaming loose, damaging his garden and causing
property damage underneath his house; contacting the owners of the dogs is -no
help. He feels that there should be a restriction on the number of dogs an
owner can breed in a residential area; his neighbor breeds dogs.
Mr. Carl Walters, member of the Orange County Planning Board, stated that
he has two german shepherds for protection and would like for the Ordinance to
contain a section that allows an owner to leave one dog out at night.
Attorney Geoffrey Gledhill noted that according to the Ordinance a vicious
animal is any dog that threatens bodily harm or property damage and a public
nuisance includes having a vicious animal. Ultimately the courts decide if
there has been a violation. Initially the Health Director or Animal Control
Officers would issue a citation, and if there. is a question of violation, the
courts would then make the ultimate decision.
Mr. Bill Ray of Cedar Grove requested further study for rural Orange County
especially relating to hunting dogs.
Commissioner Willhoit noted that hunting dogs are exempt from this
Ordinance.
Ms. Louise Cole noted a need for the Animal Control Ordinance.
Attorney Gledhill noted that if an animal used for protection attacks a
+nhhar _ t}e owner i c 7 i ahl a_ anri tha art i c a eri nl mt i nn n E tha OrAi nane•w as
53C
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written; this Ordinance, as written, makes the keeping of a vicious animal a
nuisance -- after being notified, the owner has forty-eight hours to abate the
nuisance;. if no abatement is made, a violation of the Ordinance would occur.
Commissioner Willhoit noted the need for different levels of control for
various suburban areas and that members of communities can provide distinctions
appropriate to particular areas to be considered by the Board. The Animal"
Control Ordinance will be on the agenda again for public comment on September
20, 1983.
Commissioner Whitted noted the Board is trying to provide alternatives to
prevent animals from being shot if they are not on owners' property.
Ms. Boggs noted: (1) the amendments should only pertain to Orange County;
(2) hunting dogs should-be exempt; (3) guidelines to determine where or when a
dog is considered vicious.
Commissioner Whitted noted that Mr. Robinson and Attorney Gledhill will
review the comments and the draft ordinance in an effort to list the options
available.
D-4
Commissioner Whitted noted that it was determined necessary to await the
completion of the engineering study to continue the Board's considerations of
the land use plan and the zoning of Cheeks Township before making a decision.
There is also a proposed agreement with the Town of Hillsborough to extend a
sewer line from the present system in Hillsborough to the Efland Cheeks School.
He noted that the proposed ' sewer line will aid the pressure line that will"
connect the present system to the Efland Cheeks School, as well as connect the
school and the Efland Estates Subdivision with the sewer line.
The primary concerns raised at the last meeting were: (1) the service
expense for others to have the sewer lines; (2) the need for engineering
studies; (3) the determination of appropriate location; and, (4) financial
arrangements.
Chairman Whitted noted that the engineering study and the area study of
Cheeks Township would be complete within 90-120 days; that the Farmers Home
Administration had informed the Board that it would be necessary for the County
to get the joint obligation fund for a portion of the taxes to finance the
construction of the sewer line inside the subdivision. If the County agrees to
obtain the bonds, it would take 60-90 days to have the bonds issued.
Ken Thompson, County Manager noted the engineering report will be delivered
in December, 1983, and the application for revised funding will be made after
that. .. Papers for the tax district bond will have to be filed and will take
about 90 days, after which time construction can begin; the total time table
for this effort will be approximately one year.
Mr. Roy McAdoo stated that any delay is a potential health hazard to
members of the community.
Commissioner Willhoit stated that the approval for the eight inch line,
which is necessary to meet the needs of Efland Estates, and the agreement with
F'armer's Some Administration to fund this project would not be fulfilled by the
end of the year. He noted that the need for the engineering study is to design
a line that will serve the needs of the area in the most efficient and
economical manner. Commissioner Whitted further clarified the situation.
Dr. Dan Lunsford stated that he needs a recommendation which must include a
timetable for a solution of the immediate problem, with some statement of
financial backing. Commissioner Willhoit moved, seconded by Commissioner
Marshall to have the engineering report done on sewer lines to Efland, and to
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have the Planning Staff continue the study of Cheeks Township to prepare for a
public hearing on the land use map and extension of the zoning ordinance.
VOTE: Ayes, 3; Noes, 2 (Commissioners Lloyd and Walker) .
Commissioner Willhoit moved, seconded by Commissioner Marshall to release
$20,000 for pump repairs to the Orange County School Board and to hold the
balance in reserve for the initial start up cost for construction of the line.
VOTE: Ayes, 5; Noes, 0.
C-2 Fall 1983 Litter Camnaian
Mr. Wayne Weston noted that S.R.1148 (old Eno Mountain Road) is the key
target road for this year's campaign which will be .held the week of September
19, 1983. The Department of Transportation will provide vehicular
transportation and Cone Mills will provide front end loaders, etc.
Ms. Fonrose Core, staff member at the Agricultural Extension has prepared a
slide presentation ('Orange Choice') to be shown throughout the community in an
effort to give people the opportunity to view long range . visibility and
beautification aspects of the County.
C-3 Health-Care NeeS]$_Df Older Adults
Commissioner Marshall stated that she had distributed the report from the
statewide committee for the Board members information and she hoped the Board
of Commissioners will support both state and local efforts for long term health
care needs. When appropriate, older people would prefer to stay in their homes
which, with the proper supports, is cost effective for governments.
Commissioner Marshall noted that as requested by the Board, the Department
on Aging and the Department of Social Services have negotiated a memorandum of
agreement consolidating the functions of each in delivering home care services;
requested that the Board support this agreement' in an effort to coordinate
delivery of services and to provide more services with no increase in dollar
allocation.
D-2 Fox LajrSubdivision (see page for this plan)
Commissioner Walker moved, seconded by Commissioner Lloyd to approve the
preliminary plan for Woodglen Section One subject to the recommended staff
conditions. VOTE: Ayes, 5; Noes, 0.
D-3 secPadarx Boa Names. (see page for this resolution)
Commissioner Marshall moved, seconded by Commissioner Willhoit to adopt the
resolution for name changes. VOTE: Ayes, 5; Noes, 0.
D-g &greemgLitsthe Town of Quahand -hp
Orange County School Board (see page for this agreement)
Commissioner Lloyd moved, seconded by Commissioner Walker to approve the
request to provide data processing services to the Town of Hillsborough and the
Orange County Board of Education. VOTE: Ayes, 5; Noes, 0.
Attorney Gledhill noted the need for some minor changes to the agreement.
D-6
(see page of this book)
Commissioner Walker moved, seconded by Commissioner Willhoit to extend
access to the land records system to Carrboro and Chapel Bill. VOTE: Ayes, 5;
Noes, 0.
D-7 " 11_re .Brgr'Qdure
Mr. John Horner noted that in rem Foreclosure is an alternative to mortgage
foreclosure; there is a lot of property in the County which does not have
enough value to justify a mortgage foreclosure; in rem will allow the property
to be foreclosed for a debt to the County without creating a tremendous cost
against the existing lien; the County will be the buyer and the bid will be
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what has been invested by the County in terms of taxes. Under new law there
will not be a lien sell, but advertising will again take place.
Commissioner Walker moved, seconded by Commissioner Willhoit to approve the
requested in rem Foreclosure. VOTE: Ayes, 5; Noes, 0.
D-8 C.P.dr3L_Groyp PrnnprtyTransfer (see page of this book)
Commissioner Walker moved, seconded.. by .Commissioner Lloyd to accept the
property owned by the Orange County Board of Education. VOTE; Ayes, 5; Noes, 0.
D-9 This item was nostnoned.
D-10 PrQBnsaA EMV1oY &j2:t_,�ecurity offl&B
Ken Thompson, County Manager, noted the State had approached the County
concerning a desirability to locate the Employment Security Commission in the
Chapel Hill area. The intent is to have the County participate in the cost of
rent, and the State will pick up all other costs. The Housing Authority has
agreed to provide space at $8 per foot.
Commissioner Marshall moved, seconded by Commissioner Willhoit to
participate in the cost of reopening an Employment Security Office in Orange
County. VOTE: Ayes, 5; Noes, 0.
D-11 SUpp>emental,Gggntg kg_ELe&jLb Dapartmgn* (see page of this
book)
Ken Thompson, County Manager, noted that the Health Department is seeking
supplemental funds to remedy budget cutbacks.
Commissioner Willhoit moved, seconded by Commissioner Whitted to approve
the request for funds to the Health Department. VOTE: Ayes, 5; Noes, 0.
D-12 &uthority to Sign (see page of this
book)
Commissioner Marshall moved, seconded by Commissioner Lloyd to approve the
signing of the Social Services Contracts. VOTE: Ayes, 5; Noes, 0.
D-13 DUdgat AmandMents (see page far these amendments)
County Manager, Ken Thompson made note of some additional items to be
considered along with a need to transfer funds from the capital fund to
particular departments.
Commissioner Willhoit moved, seconded by Commissioner Marshall to approve
the proposed budget amendments. VOTE: Ayes, 5; Noes, 0.
D-14 Appointmcnts
Commissioner Willhoit moved, seconded by Commissioner Marshall to appoint
Beth Cole to the Commission for Women. VOTE: Ayes, 5; Noes, 0.
Commissioner Marshall moved, seconded by Commissioner Willhoit to appoint
Brenda Stephens, Mrs. Leroy Collins, and Beatrice Marshall to the Domiciliary
Home Community Advisory Committee. VOTE: Ayes, 5; Noes, 0.
Commissioner Willhoit moved, seconded by Commissioner Marshall to appoint
Valerie Greenberg to the Orange County Planning Board. VOTE: Ayes, 5; Noes, 0.
Commissioner Marshall moved, seconded by Commissioner Willhoit to appoint
Reverend Richard Hildebrandt and Dr. Jim Allen to the Orange County Senior
Citizens Board. VOTE: Ayes, 5; Noes, 0.
Commissioner Willhoit moved, seconded by Commissioner Whitted to reappoint
Ruth Long to the Jury Commission. VOTE: Ayes, 5; Noes, 0.
Commissioner Willhoit moved, seconded by Commissioner Whitted to appoint
Mary Howes to the ABC Board. VOTE: Ayes, 5; Noes, 0.
Commissioner Marshall moved, seconded by Commissioner Whitted to delete the
nomination of Kim Hoke (with the understanding that staff will be available to
the task force) , and appoint l8 members for the ad hoc School Capital Task
Force. VOTE: Ayes, 5; Noes, 0.
n-1F Tnint vlanninn Area RnnndAry
14
§ 105-375. In rem method of foreclosure.
(a) Intent of Section. - Proceedings brought under this section are strictly in
rem. This section provides, as an alternative to G.S. 105-374, a simple and inexpensive
method of enforcing payment of taxes necessarily levied, to the knowledge of all
persons, for the requirements of local governments in this State and recognizes, in
authorizing this proceeding, that all persons owning interests in real property know or
should know that the tax lien on their real property may be foreclosed and the property
sold for failure to pay taxes.
(b) Docketing Certificate of Taxes as Judgment. - In lieu of following the
procedure set forth in G.S. 105-374, the governing body of any taxing unit may direct
the tax collector to file with the clerk of superior court, no earlier than 30 days after the
tax liens were advertised, a certificate showing the following: the name of the taxpayer,
as defined in G.S. 105-273, for each parcel on which the taxing unit has a lien for unpaid
taxes, together with the amount of taxes, penalties, interest, and costs that are a lien on
it; the year or years for which the taxes are due; and a description of the property
sufficient to permit its identification by parol testimony. The fees for docketing and
indexing the certificate assessed pursuant to G.S. 7A-308(a)(11) are payable to the clerk
of superior court at the time the taxes are collected or the property is sold.
(c) Notice to Taxpayer and Others. -
(1) Notice required. - The tax collector filing the certificate provided for
in subsection (b) of this section, shall, at least 30 days prior to
docketing the judgment, send notice of the tax lien foreclosure to the
taxpayer, as defined in G.S. 105-273, at the taxpayer's last known
address and to all lienholders of record required to be served under
G.S. 105-374(c).
(2) Contents of notice. - The notice required by this subsection shall state
that a judgment will be docketed and the proposed date of the
docketing, state that execution will be issued as provided by law,
provide a brief description of the real property affected, and state that
the lien may be satisfied prior to judgment being entered.
(3) Service of notice. - The notice required by this subsection shall be
sent by registered or certified mail, return receipt requested.
(4) Additional efforts may be required. - If within 10 days following the
mailing of a notice, a return receipt has not been received by the tax
collector indicating receipt of the notice, then the tax collector shall do
both of the following:
a. Make reasonable efforts to locate and notify the taxpayer, if not
yet notified, and all unnotified lienholders of record prior to the
docketing of the judgment and the issuance of the execution.
Reasonable efforts may include posting the notice in a
conspicuous place on the property, or, if the property has an
address to which mail may be delivered, mailing the notice by
first-class mail to the attention of the occupant.
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https://www.ncleg.net/enactedIegisIation/statutes/htmI/bysection/chapter_105/gs_105-375.htmI
15
§ 105-375. In rem method of foreclosure.
b. Have a notice published in a newspaper of general circulation
in the county once a week for two consecutive weeks directed
to, and naming, all unnotified lienholders and the taxpayer that
a judgment will be docketed against the taxpayer.
(5) Costs of notice added to lien. - All costs of mailing and publication,
plus a charge of two hundred fifty dollars ($250.00) to defray
administrative costs, shall be added to the amount of taxes that are a
lien on the real property and shall be paid by the taxpayer to the taxing
unit at the time the taxes are collected or the property is sold.
(d) Effect of Docketing Certificate of Taxes Due. - Immediately upon the
docketing and indexing of a certificate as provided in subsection (b) of this section, the
taxes, penalties, interest, and costs constitute a valid judgment against the real property
described in the judgment, with the priority provided for tax liens in G.S. 105-356. The
judgment, except as expressly provided in this section, has the same force and effect as
a duly rendered judgment of the superior court directing sale of the property for the
satisfaction of the tax lien, and it shall bear interest at an annual rate of eight percent
(8%).
(e) Special Assessments. - Street, sidewalk, and other special assessments may
be included in any judgment for taxes taken under this section, or the special
assessments may be included in a separate judgment docketed under this section. The
tax collector may use the judgment as a method of foreclosing the lien of special
assessments. When used to foreclose the lien of special assessments, the procedure may
be instituted at any time after the assessment or installment falls due and remains
unpaid; the waiting period required by subsection (b) of this section does not apply to
the foreclosure of special assessments.
(f) Motion to Set Aside. - At any time prior to the issuance of execution, any
person having an interest in the real property to be foreclosed may appear before the
clerk of superior court and move to set aside the judgment on the ground that the tax
has been paid or that the tax lien on which the judgment is based is invalid.
(g) Cancellation upon Payment. - Upon payment in full of any judgment
docketed under this section, together with interest and costs accrued to the date of
payment, the tax collector receiving payment shall certify the fact of the payment to the
clerk of superior court and cancel the judgment.
(h) Relationship between G.S. 105-374 and This Section. - If, before the
issuance of execution on the judgment under subsection (i) of this section, the taxing
unit is made a defendant in a foreclosure action brought against the property under
G.S. 105-374, it shall file an answer in that proceeding and thereafter all proceedings
shall be governed by order of the court in accordance with that section.
(i) Issuance of Execution. -At any time after three months and before two years
from the indexing of the judgment as provided in subsection (b) of this section,
execution shall be issued at the request of the tax collector in the same manner as
executions are issued upon other judgments of the superior court, and the real property
2
https://www.ncleg.net/enactedIegisIation/statutes/htmI/bysection/chapter_105/gs_105-375.htmI
16
§ 105-375. In rem method of foreclosure.
shall be sold by the sheriff in the same manner as other real property is sold under
execution with the following exceptions:
(1) No debtor's exemption shall be allowed.
(2) At least 30 days prior to the day fixed for the sale, the sheriff shall
send notice by registered or certified mail, return receipt requested, to
the taxpayer at the taxpayer's last known address, in lieu of personal
service, and to all lienholders of record. If within 10 days following
the mailing of a notice, a return receipt has not been received by the
sheriff indicating receipt of the notice, then the sheriff shall make
additional efforts to locate and notify the taxpayer, if not yet notified,
and all unnotified lienholders of record of the sale under execution in
accordance with subdivision (4) of subsection (c) of this section.
(3) The sheriff shall add to the amount of the judgment as costs of the
sale any postage expenses incurred by the tax collector and the sheriff
in foreclosing under this section.
(4) In any advertisement or posted notice of sale under execution, the
sheriff may (and at the request of the governing body shall) combine
the advertisements or notices for properties to be sold under executions
against the properties of different taxpayers in favor of the same taxing
unit or group of units;however,the property included in each judgment
shall be separately described and the name of the taxpayer specified in
connection with each property.
The purchaser at the execution sale acquires title to the property in fee simple free
and clear of all claims, rights, interests, and liens except the liens of other taxes or
special assessments not paid from the purchase price and not included in the judgment.
(il) Fee. - The fee assessed in G.S. 7A-308(a)(1a) is payable to the clerk of
superior court out of the sale proceeds at the time the property is sold.
0) Attorney's Fee. - The governing body of the taxing unit may make whatever
arrangement it deems satisfactory for compensating an attorney rendering assistance or
advice in foreclosure proceedings brought under this section,but the attorney's fee shall
not be added to the judgment as part of the costs of the action.
(k) Consolidation of Liens. - By agreement between the governing bodies, two
or more taxing units may consolidate their tax liens for the purpose of docketing a
judgment, or may have one execution issued for separate judgments, against the same
property. In like manner, one execution may issue for separate judgments in favor of
one or more taxing units against the same property for different years' taxes.
(l) Purchase and Resale by Taxing Unit. -The rights of a taxing unit to purchase
real property at a foreclosure sale and resell it are governed by G.S. 105-376.
(m) Procedure if Section Declared Unconstitutional. - If any provisions of this
section are declared invalid or unconstitutional by the Supreme Court of North Carolina,
a United States district court of three judges, the United States Circuit Court of Appeals,
or the United States Supreme Court, all taxing units that have proceeded under this
3
https://www.ncleg.net/enactedIegisIation/statutes/htmI/bysection/chapter_105/gs_105-375.htmI
17
§ 105-375. In rem method of foreclosure.
section shall have five years from the date of the filing of the opinion (or, in the case of
appeal, from the date of the filing of the opinion on appeal) in which to institute
foreclosure actions under G.S. 105-374 for all taxes included in judgments taken under
this section and for subsequent taxes due or which, but for purchase of the property by
the taxing unit, would have become due; and the judicial decision shall not have the
effect of invalidating the tax lien or disturbing its priority. (1939, c. 310, s. 1720; 1945,
c. 646; 1957, cc. 91, 1262; 1971, c. 806, s. 1; 1973, c. 108, s. 52; c. 681, ss. 1, 2; 1983,
c. 808, s. 9; c. 855, ss. 1, 2; 1987, c. 450; 1989, c. 37, s. 7; c. 682; 1999-439, ss. 2, 3;
2001-139, s. 9; 2006-106, ss. 4-6; 2011-352, s. 1; 2019-243, s. 12(b); 2021-91, s. 3(b).)
4
https://www.ncleg.net/enactedlegisIation/statutes/htmI/bysection/chapter_105/gs_105-375.htmI
18
ss' 105-374. Foreclosure of tax lien by action in nature of action to foreclose a
mortgage.
(a) Intent of Section. -Proceedings brought under this section are strictly in rem.
This section provides, as an alternative to G.S. 105-374, a simple and inexpensive
method of enforcing payment of taxes necessarily levied, to the knowledge of all
persons, for the requirements of local governments in this State and recognizes, in
authorizing this proceeding, that all persons owning interests in real property know or
should know that the tax lien on their real property may be foreclosed and the property
sold for failure to pay taxes.
(b) Docketing Certificate of Taxes as Judgment. - In lieu of following the
procedure set forth in G.S. 105-374, the governing body of any taxing unit may direct
the tax collector to file with the clerk of superior court, no earlier than 30 days after the
tax liens were advertised, a certificate showing the following: the name of the taxpayer,
as defined in G.S. 105-273, for each parcel on which the taxing unit has a lien for unpaid
taxes, together with the amount of taxes, penalties, interest, and costs that are a lien on
it; the year or years for which the taxes are due; and a description of the property
sufficient to permit its identification by parol testimony. The fees for docketing and
indexing the certificate assessed pursuant to G.S. 7A-308(a)(11) are payable to the clerk
of superior court at the time the taxes are collected or the property is sold.
(c) Notice to Taxpayer and Others. -
(1) Notice required. - The tax collector filing the certificate provided for
in subsection (b) of this section, shall, at least 30 days prior to
docketing the judgment, send notice of the tax lien foreclosure to the
taxpayer, as defined in G.S. 105-273, at the taxpayer's last known
address and to all lienholders of record required to be served under
G.S. 105-374(c).
(2) Contents of notice. - The notice required by this subsection shall state
that a judgment will be docketed and the proposed date of the
docketing, state that execution will be issued as provided by law,
provide a brief description of the real property affected, and state that
the lien may be satisfied prior to judgment being entered.
(3) Service of notice. - The notice required by this subsection shall be
sent by registered or certified mail, return receipt requested.
(4) Additional efforts may be required. - If within 10 days following the
mailing of a notice, a return receipt has not been received by the tax
collector indicating receipt of the notice, then the tax collector shall do
both of the following:
a. Make reasonable efforts to locate and notify the taxpayer, if not
yet notified, and all unnotified lienholders of record prior to the
docketing of the judgment and the issuance of the execution.
Reasonable efforts may include posting the notice in a
conspicuous place on the property, or, if the property has an
address to which mail may be delivered, mailing the notice by
first-class mail to the attention of the occupant.
https://www.ncleg.gov/EnactedLegislation/Statutes/PDF/BySection/Chapter_105/GS_105-374.pdf
19
105-374. Foreclosure of tax lien by action in nature of action to foreclose a
mortgage.
b. Have a notice published in a newspaper of general circulation
in the county once a week for two consecutive weeks directed
to, and naming, all unnotified lienholders and the taxpayer that
a judgment will be docketed against the taxpayer.
(5) Costs of notice added to lien. - All costs of mailing and publication,
plus a charge of two hundred fifty dollars ($250.00) to defray
administrative costs, shall be added to the amount of taxes that are a
lien on the real property and shall be paid by the taxpayer to the taxing
unit at the time the taxes are collected or the property is sold.
(d) Effect of Docketing Certificate of Taxes Due. - Immediately upon the
docketing and indexing of a certificate as provided in subsection (b) of this section, the
taxes, penalties, interest, and costs constitute a valid judgment against the real property
described in the judgment, with the priority provided for tax liens in G.S. 105-356. The
judgment, except as expressly provided in this section, has the same force and effect as
a duly rendered judgment of the superior court directing sale of the property for the
satisfaction of the tax lien, and it shall bear interest at an annual rate of eight percent
(8%).
(e) Special Assessments. - Street, sidewalk, and other special assessments may
be included in any judgment for taxes taken under this section, or the special
assessments may be included in a separate judgment docketed under this section. The
tax collector may use the judgment as a method of foreclosing the lien of special
assessments. When used to foreclose the lien of special assessments, the procedure may
be instituted at any time after the assessment or installment falls due and remains
unpaid; the waiting period required by subsection (b) of this section does not apply to
the foreclosure of special assessments.
(f) Motion to Set Aside. - At any time prior to the issuance of execution, any
person having an interest in the real property to be foreclosed may appear before the
clerk of superior court and move to set aside the judgment on the ground that the tax
has been paid or that the tax lien on which the judgment is based is invalid.
(g) Cancellation upon Payment. - Upon payment in full of any judgment
docketed under this section, together with interest and costs accrued to the date of
payment, the tax collector receiving payment shall certify the fact of the payment to the
clerk of superior court and cancel the judgment.
(h) Relationship between G.S. 105-374 and This Section. - If, before the
issuance of execution on the judgment under subsection (i) of this section, the taxing
unit is made a defendant in a foreclosure action brought against the property under
G.S. 105-374, it shall file an answer in that proceeding and thereafter all proceedings
shall be governed by order of the court in accordance with that section.
(i) Issuance of Execution. -At any time after three months and before two years
from the indexing of the judgment as provided in subsection (b) of this section,
execution shall be issued at the request of the tax collector in the same manner as
executions are issued upon other judgments of the superior court, and the real property
2
https://www.ncleg.gov/EnactedLegislation/Statutes/PDF/BySection/Chapter_105/GS_105-374.pdf
20
ss' 105-374. Foreclosure of tax lien by action in nature of action to foreclose a
mortgage.
shall be sold by the sheriff in the same manner as other real property is sold under
execution with the following exceptions:
(1) No debtor's exemption shall be allowed.
(2) At least 30 days prior to the day fixed for the sale, the sheriff shall
send notice by registered or certified mail, return receipt requested, to
the taxpayer at the taxpayer's last known address, in lieu of personal
service, and to all lienholders of record. If within 10 days following
the mailing of a notice, a return receipt has not been received by the
sheriff indicating receipt of the notice, then the sheriff shall make
additional efforts to locate and notify the taxpayer, if not yet notified,
and all unnotified lienholders of record of the sale under execution in
accordance with subdivision (4) of subsection (c) of this section.
(3) The sheriff shall add to the amount of the judgment as costs of the
sale any postage expenses incurred by the tax collector and the sheriff
in foreclosing under this section.
(4) In any advertisement or posted notice of sale under execution, the
sheriff may (and at the request of the governing body shall) combine
the advertisements or notices for properties to be sold under executions
against the properties of different taxpayers in favor of the same taxing
unit or group of units;however,the property included in each judgment
shall be separately described and the name of the taxpayer specified in
connection with each property.
The purchaser at the execution sale acquires title to the property in fee simple free
and clear of all claims, rights, interests, and liens except the liens of other taxes or
special assessments not paid from the purchase price and not included in the judgment.
(il) Fee. - The fee assessed in G.S. 7A-308(a)(1a) is payable to the clerk of
superior court out of the sale proceeds at the time the property is sold.
0) Attorney's Fee. - The governing body of the taxing unit may make whatever
arrangement it deems satisfactory for compensating an attorney rendering assistance or
advice in foreclosure proceedings brought under this section,but the attorney's fee shall
not be added to the judgment as part of the costs of the action.
(k) Consolidation of Liens. - By agreement between the governing bodies, two
or more taxing units may consolidate their tax liens for the purpose of docketing a
judgment, or may have one execution issued for separate judgments, against the same
property. In like manner, one execution may issue for separate judgments in favor of
one or more taxing units against the same property for different years' taxes.
(l) Purchase and Resale by Taxing Unit. -The rights of a taxing unit to purchase
real property at a foreclosure sale and resell it are governed by G.S. 105-376.
(m) Procedure if Section Declared Unconstitutional. - If any provisions of this
section are declared invalid or unconstitutional by the Supreme Court of North Carolina,
a United States district court of three judges, the United States Circuit Court of Appeals,
or the United States Supreme Court, all taxing units that have proceeded under this
3
https://www.ncleg.gov/EnactedLegislation/Statutes/PDF/BySection/Chapter_105/GS_105-374.pdf
21
105-374. Foreclosure of tax lien by action in nature of action to foreclose a
mortgage.
section shall have five years from the date of the filing of the opinion (or, in the case of
appeal, from the date of the filing of the opinion on appeal) in which to institute
foreclosure actions under G.S. 105-374 for all taxes included in judgments taken under
this section and for subsequent taxes due or which, but for purchase of the property by
the taxing unit, would have become due; and the judicial decision shall not have the
effect of invalidating the tax lien or disturbing its priority. (1939, c. 310, s. 1720; 1945,
c. 646; 1957, cc. 91, 1262; 1971, c. 806, s. 1; 1973, c. 108, s. 52; c. 681, ss. 1, 2; 1983,
c. 808, s. 9; c. 855, ss. 1, 2; 1987, c. 450; 1989, c. 37, s. 7; c. 682; 1999-439, ss. 2, 3;
2001-139, s. 9; 2006-106, ss. 4-6; 2011-352, s. 1; 2019-243, s. 12(b); 2021-91, s. 3(b).)
4
https://www.ncleg.gov/EnactedLegislation/Statutes/PDF/BySection/Chapter_105/GS_105-374.pdf