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PROPERTIES WITH MATURED TAX OR UTILITY LIENS 1 Updated 1/23/2024 1.0 Purpose The purpose of this Policy is to provide guidelines for City staff to follow in handling and processing properties on which property taxes or utility liens have or will soon mature and to ensure that such properties are handled in a consistent manner that protects the best interests of the City. 2.0 Policy on Properties with Matured Liens It is the City’s policy to collect, to the greatest extent possible, all real property taxes and utility charges which are due in a timely fashion and in accordance with applicable state statutes. It is also our policy to work with individual citizens who make a good- faith effort to meet their obligations. The City will take possession of properties on which tax or utility liens have matured only after other alternatives have been exhausted and/or where such action meets the City’s community development and revenue collection needs. 3.0 Situation Where City May Take Possession of Property Under state law, the City becomes the owner of a property at the point where a lien matures. The City does not, however, become liable for the property until sixty days after the City becomes aware that the property has been abandoned or upon asserting possession of the property, an action which indicates that the City will no longer consider allowing the prior owner to redeem the property. The City will consider taking possession of properties with matured tax or utility liens under the following circumstances. 3.1 Vacant and Blighted. Properties which are vacant and considered blighted will generally be taken unless: 3.1.1 The property owner pays all amount due to the City for any and all purposes. 3.1.2 The property owner enters into a legally binding commitment to bring the property into full compliance with the City’s codes within a reasonable period of time, such period to generally not exceed 12 months. 3.2 Non-conforming Structures. Properties which do not conform to current land use and zoning policies may be taken by the City. This decision will be based on a consideration of the following factors: 3.2.1 The extent of the non-conformity; 3.2.2 The effect of the property on surrounding properties and uses; 3.2.3 The condition of the property including its overall appearance and the presence or absence of any code violations; 3.2.4 The willingness and ability of the property owner to pay all amounts due to the City, to address code issues, and to take steps to mitigate adverse ---PAGE BREAK--- PROPERTIES WITH MATURED TAX OR UTILITY LIENS 2 Updated 1/23/2024 impacts which the non-conforming use may have on surrounding properties. 3.3 Vacant Land. The City may take possession of any vacant parcels on which liens have matured. This decision will be based on the following considerations: 3.3.1 The willingness and ability of the property owners to pay all amounts due to the City; 3.3.2 The ratio between the amount owed the City and the assessed value of the property; 3.3.3 The extent to which the property has a negative impact on surrounding properties and/or has been found to be in violation of City ordinances. 3.4 Owner Occupied Residences. As a general guideline, it is not the City’s intent to take possession of owner-occupied single-family residences unless continued occupancy of the residences poses a direct and immediate threat to the health, safety, and welfare of the residents or those of neighboring properties or the City determines that the owner/resident is capable of meeting his or her obligations to the City but refuses to do so. 3.4.1 Where it is determined that continued occupancy of the property poses a direct and immediate threat to the residents or those of neighboring properties, the City may take possession of the property. City staff shall work with the residents to locate alternative safe and affordable housing. 3.4.2 Where it is determined that the owner/resident is capable of meeting his or her obligations and refuses to do so, the City may take possession of the property. Factors which may be considered in determining whether a good faith effort is being made to meet these obligations may include: 3.4.2.1 Willingness to enter into and meet the requirements of workout agreements; 3.4.2.2 Application for the Homestead or other available exemptions; 3.4.2.3 Application for the Maine Residents Property Tax Program and agreement to assign all payments from the program toward amounts due to the City; 3.4.2.4 Exploration of other options to meet obligations to the City including, but not limited to, applications for a hardship abatement, exploration of a reverse mortgage, or any other proposal or activity that will result in payment to the City and correction of existing code violations. 3.5 Other Circumstances. The City may take possession of properties on which liens have matured under other circumstances not listed above, regardless of the condition of the property, when it is determined that doing so is in the best interests of the City and its residents. Without limitation, such circumstances may include the following: ---PAGE BREAK--- PROPERTIES WITH MATURED TAX OR UTILITY LIENS 3 Updated 1/23/2024 3.5.1 Ownership of the property is required for construction or maintenance of necessary public facilities such as roads, utility facilities, parks, recreational trails, schools, or public buildings. 3.5.2 The property is located in a designated Community Development Project area and City ownership is required to facilitate a redevelopment project. 3.5.3 Ownership of the property is required for expansion of a City-owned commercial, industrial, or business park. 3.5.4 Ownership of the property is required to facilitate an environmental remediation project. 3.5.5 The City Council determines that ownership of the property is in the public interest for other identifiable reasons. 4.0 Procedure After utility or tax liens have matured, the responsible City staff will take the necessary steps to ensure that the City’s lien interests have been perfected and that owners are notified of the status of their property and the necessity to make immediate arrangements to meet their obligation. Where called for by this policy, staff will compile the necessary information to enable the City Council to make the determination of whether to take actual possession of a property. 4.1 Lien Perfection. Staff will ensure that all legally required notices have been sent and that all legal requirements have been met, including notification of any institutions or individuals holding a mortgage interest in the property. 4.2 Code Compliance. Once staff has determined that the City is legally authorized to foreclose the lien and take possession of the property, the Code Enforcement Officer will be provided with a list of these properties. Code will inspect them to determine their compliance with building, property maintenance, and life safety codes and their conformance with the City’s Comprehensive Plan and Land Development Code. 4.3 Notification. The property owner will be notified via certified mail that the City has a matured lien on the property in question and that acceptable arrangements must be made within thirty days of the date of the notice to pay all amounts due and, if necessary, commit to the steps to bring the property into compliance with all City Codes. 4.4 Where staff determines that the property in question poses a hazard to individuals or surrounding property, or where the property owner has a history of failing to meet his or her obligations to the City and/or to meet the City’s Codes, the requirements of 4.2 and 4.3 may be eliminated. 4.5 During the 30 day period outlined in section 4.3 above, staff shall endeavor to meet with the property owners in question and attempt to reach an agreement as to payment of amounts due as well as on the steps which the property owner will take, if necessary, to bring the property into compliance with the applicable City Codes. ---PAGE BREAK--- PROPERTIES WITH MATURED TAX OR UTILITY LIENS 4 Updated 1/23/2024 5.0 Policy on Lien Waivers Under state law, the City becomes liable for abandoned properties sixty (60) days after liens foreclose. Given this, there are circumstances where the City may wish to waive foreclosure in order to avoid liability or expenditures on a foreclosed property may not be justifiable. Such situations may include but not be limited to structures on leased property where the cost of demolition may not easily be recovered or properties which may expose the City to environmental liabilities. It is the City’s policy to avoid, to the greatest extent possible, assuming liabilities for foreclosed properties which exceed the financial or community benefits associated with acquiring them. 5.1 Advance Review of Properties Facing Lien Foreclosure 5.1.1 On or about November 15th of each year, Finance shall provide Code and Administration with a list of properties on which liens are scheduled to mature and on which the property owner has not agreed to acceptable arrangements to meet his or her responsibilities to the City. This list shall specifically identify structures located on leased land; 5.1.2 Code Enforcement shall review these properties to determine whether they are occupied or abandoned and their condition. 5.1.3 Code shall also identify any properties that may expose the City to environmental or other liabilities. 5.1.4 On or about December 1 of each year, Code shall submit a report to Administration on the result of these investigations. 5.1.5 Administration shall review this report and identify properties where it may be prudent for the City to consider waiving foreclosure and provide a recommendation to Council on properties where lien waiver should be considered. 5.1.6 Once the Council has waived foreclosure on a property or structure, Finance shall take the necessary steps to ensure that future 45-day foreclosure notices are not issued. These properties shall continue to be reviewed annually by Code and Administration to determine whether the City should continue to forego lien foreclosure or proceed to allow future liens to foreclose. Where the recommendation is for the City to allow foreclosure to proceed by issuing the 45-day notice, this recommendation shall be forwarded to the City Council for its consideration. 5.1.7 Finance shall file Council-approved waivers with the Androscoggin County Registry of Deeds. 5.1.8 For mobile homes or other structures on leased property, the City may contact the land owner to determine if the owner is willing to accept the transfer of the ownership of the mobile home or structure and to take the necessary steps to remove or rehabilitate it should the City allow foreclosure to proceed. In such instances, the City Council will be asked to transfer the ownership of the structure once the City takes possession. ---PAGE BREAK--- PROPERTIES WITH MATURED TAX OR UTILITY LIENS 5 Updated 1/23/2024 6.0 Council Action City Council approval is required to authorize the City to take possession of a property on which a lien has matured except where automatic possession has taken place due to abandonment of a property. Nothing in this policy shall limit the discretion of the City Council from taking possession of a specific property based upon the Council’s evaluation of that property and its determination as to what action, if any, is in the best interest of the City and its citizens. 7.0 Legal Rights This policy is not intended to create legal rights on the part of residents or taxpayers. Failure of the City to follow the guidelines or procedures established by this policy shall not constitute a defense or bar to the City’s foreclosure of matured tax or utility liens or to any legal titles derived from such foreclosures. Failure to follow the guidelines or procedures established by this policy shall not constitute a defense or bar to the City’s collection of any taxes, utility charges, or other charges owed. 8.0 Staff Responsibilities 8.1 The Finance Director shall have overall responsibility for implementing this policy to include: 8.1.1 Lien perfection; 8.1.2 Property owner notification; 8.1.3 Negotiating payment arrangements with property owners 8.1.4 Providing Code and Administration with a list of potential lien foreclosures on or before November 15th of each year; 8.1.5 Providing Code and Administration with a list of properties on which liens have been waived in prior years; 8.1.6 Requesting support from other City staff as necessary. 8.2 The Planning and Code Enforcement Director shall be responsible for: 8.2.1 Providing property inspection reports to City Administration; 8.2.2 Determining property compliance with the City’s Land Development Code; 8.2.3 Negotiating agreements to bring properties into compliance with City Codes. 8.3 Administration shall be responsible for making recommendations to the City Council as to properties on which lien foreclosure should be waived and those where the City should consider taking possession. 9.0 Sale of Tax Acquired Property Process 9.1 At least 90 days prior to listing property for sale the staff will send a written notice to the last known address of the former owner by U.S. Postal Service ---PAGE BREAK--- PROPERTIES WITH MATURED TAX OR UTILITY LIENS 6 Updated 1/23/2024 certified mail return receipt requested and first-class mail, of the right to require the sale process in 36 M.R.S.§ 943-C. The State of Maine, Municipality Notice of Intent to Sell Your Former Property form found under the section listed must be used to provide notice to the former owner 9.2 Properties that were foreclosed on will be sold by a real estate broker licensed under State of Maine, Title 32, chapter 114 who does not hold an elected or appointed office in the municipality and is not employed by the municipality. 9.3 Sell the property via quitclaim deed to the successful buyer at the highest price at which the property is able to sell or the price at which the property is anticipated by the real estate broker to sell within 6 months after listing. 9.4 Former owner will be paid the excess of the sale minus all the approved expenses under M.R.S. Title 36§ 943-C.