Wednesday, August 11, 2004

American Dream or Legalistic Nightmare?

"We are here from the government to help you..."
Anonymous Bureaucrat

Do you own your home?

Many of you may say yes. Some, might even quip, "Well, me and the bank..."
Others may aspire to someday stop paying a landlord.
Some of you may have completed your mortgage payments and own your home 'outright'.

Or do you?

Residents of Suffolk County, on New York's Long Island are beginning to discover the surprising answer to this question.

In summary, New York law allows the County Government to, after due-diligence in notifying the tax-payer, to attain title to homes where property-taxes are owed. Having attained said title, the County Government to sell the property at auction.

Here is the kicker: The County Government then keeps the ENTIRE proceeds from the sale. In the case of Mr. Charles Weber, whose wife, Patricia, was dying of cancer and whose business was failing, owed the county $22,995 by 1998, including unpaid taxes, interest and penalties. The County sold Mr. Weber's Fire Island home, which had been in his family over 50 years, for $615,000. The entire proceeds were, in full accordance with New York State statutes, were kept by the Suffolk County Treasury, a tidy $550,000 profit (in round figures).

Sarah Jones, 68, who had two strokes and has been living on Social Security disability since 1988, was another victim of Suffolk's auction process. Her house of nearly 40 years was taken by Suffolk County in 1997, because she owed the County $11,723 in taxes and penalties on her two-bedroom Patchogue home. Her home was sold at a June auction for $185,000 - with all of the money going to county coffers.

I have often quoted Bastiat in the past.

On this particular subject his discussion of 'Legal Plunder' is particularity presented.

How to Identify Legal Plunder

"But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime."

Now, it just so happens that I did a little search using Mr. Weber's name as my criteria. The first hit was John Beck's site about making big profits from Tax Auctions.

Whatever you may think of the methods detailed on the site, Mr. Beck seems to be advocating the very practice that the NewsDay article describes as SOP in Manhattan and Nassau Counties. (Did you know Manhattan is it's own county?) In the case of these local governments, the former resident of the tax-delinquent property do not lose their entire equity in the government-mandated process.

You may not think much of Mr. Beck and what he advocates, but one thing is sure. He could never dream of attaining the kind of profits that Suffolk County enjoys. If Mr. Beck, or one of his protege' were to attempt to foreclose on a tax-lien and pocket the entire proceeds of the sale, we would all cry with alarm at the violation of legal principles.

"See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime."

What do Suffolk County officials say when questioned about this practice?

"John Cochrane, Suffolk treasurer, however, says the county goes to great lengths to notify delinquent taxpayers of their impending loss of property. After three years of nonpayment, the county lists the properties in an array of newspapers and sends out letters via certified mail to the owners, he said. Financial advice is also available, he said."

In other words, WE WARNED THEM.

I have heard the County Executive of Suffolk County attempting to justify this situation. His responses were basically the same as the head of the County Legislature:

Providing incentive

As for Suffolk's approach, Joseph Caracappa (R-Selden), presiding officer of the Suffolk County Legislature, said it may appear heavy-handed. "But we have given them every opportunity to pay. There needs to be a cut-off period - or there would not be much of an incentive to pay on a timely basis."

Now, it seem a good time to ask:

What is the procedure in your county? What is State Law?

I admit, I do not know the specifics here in Jackson, CO MO.

But I, for one, intend to find out.

Make no mistake, the sheer amounts of money and the very remote aspect of the Federal Government in DC bares huge scrutiny.

State and Local Government, being closer at hand are SUPPOSED to be more in tune with the electorate.

I suppose if you have been bored or otherwise annoyed by my droning on and on about politics, you would not be reading this now.


And so, I ask once more, Do you OWN YOUR HOME?


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