Disputes surround Ontario County's handling of tax-foreclosed properties
Ontario County lawmakers say they have no plans to change the county's policy for selling tax-foreclosed properties — but the outcome of a recent court case and public opinion point in a different direction.
On Wednesday, Ontario County will hold its annual tax-foreclosed property auction. Twenty parcels are set to be auctioned off at the county Safety Training Facility. Taxpayers have two years to pay their county property taxes and if they miss a final deadline in January, the property goes up for auction.
“I understand you have to to pay your taxes,” said Marty McMillan, broker/owner of McMillan Welch Real Estate Agency. What he and others disagree with is the amount of money the county makes from selling those properties — recouping not just the amount of taxes owed, but what the property sells for at auction, as well.
“It doesn’t matter if it’s Inn on the Lake or the mobile home of a widowed war veteran, it is wrong to take more than what is owed to you,” said Matt Schaertl of Shortsville, a former Manchester town councilman.
Despite court challenges — some that have drawn on for years — as well as calls to amend the policy to fit what neighboring counties do, county lawmakers say they have no plans to change course.
The current way is “fair and effective,” said Canandaigua City Supervisor David Baker, who heads the county Ways and Means Committee where a discussion of changing policy would start. Attorney Jason DiPonzio, who represents the county in the real estate matters, said the county follows New York State Real Property Tax Law.
But the recent outcome of a case that returned a foreclosed property to its owner following last year’s auction could mean more wins for property owners who take the county to court.
Businessman Eric Lundquist won his Rushville property back after a unanimous decision by the state Supreme Court Appellate Division.
Not everyone — especially people who couldn’t pay their taxes due to hardship — has the means to challenge the decision like he did, Lundquist said.
Lundquist won in the Appellate Division, 4th Department, which reversed a decision by Judge Frederick Reed in Ontario County, who ruled the county had done everything according to statute. The county pursued it further, seeking a ruling by the Appellate Division in Albany, which did not review the decision.
Ruling for the property owner based on a matter of equity, the 4th Department decision stated that taking the property from Lundquist would be “a disproportionately harsh result.” The 15-acre lot and its buildings, once a facility for Lundquist’s Document Reprocessors company, is assessed at more than $400,000. Lundquist paid $31,000 on Dec. 29, 2017, according to county records, which covered property tax payments for 2015 through 2017. He said he spent more than $120,000 in legal fees to pursue his case.
Another case that returned a foreclosed property to its owner ended in 2009 when the state Appellate Division 4th Department ruled a property owner should be allowed to keep his 8-acre wooded parcel on Monks Road in Canandaigua. The issue centered on $24 owed in interest on delinquent property taxes. If the county had sold that property “that minor amount of interest would result in a disproportionately harsh result,” the court concluded.
Another case involved the 2007 foreclosure of the Akropolis Family Restaurant in Hopewell. The owner sued the county over the sale, claiming the county mishandled the foreclosure process regarding notification and other issues. A relative bought back the property in Hopewell at the county auction on the owner’s behalf for $160,000. The owner, who was recently widowed at the time, sought to pay the $22,110 in back taxes she owed at the time of the sale and recoup the $160,000 plus interest and other expenses she incurred. State Supreme Court Justice John Ark denied the county’s attempt to have the case dismissed, and the county appealed the decision.
McMillan said people get in all kinds of situations that put them in a bind.
“Hard times are not completely resolved ... they may be ashamed or simply have financial difficulties,” he said.
In Ontario County, “the gavel drops too hard and too fast,” he said.
Surrounding counties provide examples of other ways to handle foreclosures.
In Wayne County, the tax-foreclosed properties auction will be June 13. To avoid the auction block, property owners have until May 31 to pay up. The county keeps whatever the properties sell for, but does not charge the new owners for the amount of taxes due.
In Yates County, the auction will take place June 21. Property owners have up to one month before the auction to pay their taxes and avoid a county sale of their property. (This year they have until May 21). Like Wayne, Yates County does not recoup back taxes.
“We get whatever the property sells for — hopefully it covers back taxes, but it doesn’t always,” said Yates County Treasurer Winona Flynn.
If you go
WHAT: Ontario County real estate auction
WHEN: Wednesday, May 23; preview, registration 6 p.m.; auction 7 p.m.
WHERE: Ontario County Safety Training Facility, 2914 County Road 48, Hopewell
DETAILS: County will sell 20 parcels at auction of tax foreclosed real estate. More information at https://bit.ly/2JFmgKG