Record number of Woonsocket properties slated for tax sale

Record number of Woonsocket properties slated for tax sale

WOONSOCKET - Less than 30 days remain before the 850-plus city properties with outstanding bills for sewer, water and real estate head to tax sale.

The sale, which attracts investors with the promise of liens yielding high interest rates over the next year, is slated to take place on Aug. 23 at 1 p.m. at City Hall. Participants will have the chance to pay past due bills for property in exchange for the lien, which will begin immediately to accrue interest at a rate of 10 percent.

Such events take place semi-annually in Woonsocket, but according to Finance Director Thomas Bruce, the upcoming sale may be the largest yet, expected to bring in more than $1 million on real estate alone, for a city badly in need of the cash.

"The reason I have a tax sale in August is because the money can be applied for the prior fiscal year," he said.

For homeowners who have fallen behind, however, it can be a stressful time of year. All property on which the owner owes the city more than $100 on real estate taxes due prior to Feb. 15, 2013, or water and sewer fees from 2012, are subject to the sale, and were notified via certified mail 40 days prior to the event.

This year, Bruce said, he sent out 906 such letters, to around 550 residents owing water and sewer payments and another 350 that had not paid real estate taxes, the largest number on record. The list even included a few well known locals such as City Council member Albert Brien, who owes a water bill on his property at 155 Transit St., and Councilor Christopher Beauchamp. who owes both sewer and water fees for his property at 37 Meadow Road.

Developer Gary Fernandes appears numerous times, owing real estate tax on his property at 167 Blackstone St., and water and sewer taxes at 91, 26 and 32 Main St., 133 River St., and 837 Social St.

Bruce said that as of Wednesday, July 24, neither council member had been in to pay the bills.

Next week, the properties will be advertised, along with the names of the owners. The list will also become available at City Hall, and posted to the city's website.

"The idea is to attract potential tax sale participants," said Bruce, who added that he expects around 50 such buyers this year.

Investors who pay bills on the properties will be entitled to an additional 10 percent interest for the first one to six months they hold the lien. The rates start to jump in the final 7 through 12 months, earning one percent more in interest each month, for a total of up to 16 percent.

To remove the lien from their land, the owner must pay the original tax, along with any interest that has accrued.

"It's a very aggressive process," said Bruce.

After one year and one day, the lien holder can petition Superior Court to begin a sale of the property. In a process which Bruce said is very rare and takes several months for completion, a judge sets the purchase price of the land. If the lien holder pays the price, he or she assumes total ownership of the property.

"Most homeowners whose property went through tax sale will come back and redeem the property," explained Bruce. "The notion of losing a home rarely happens."

Bruce said he tries to work with taxpayers before the sale, extending payment plans and looking for other ways to help, and that he'll accept payment on the bills right up until the sale.

"I try to make it easy," he said.

He said he expects to collect around $900,000 in the days leading up to the event and another $80,000 from investors buying liens on real estate alone.

While the finance director admitted that he has many "regulars" - property owners who come in each year scrambling to catch up on past due bills before the sale takes place - he said the past few years have been a little different.

"It isn't just the regulars the past couple of years and it's sad," he said.

Bruce said multi-families in Woonsocket seem to have been hit particularly hard by the down local and national economy, as landlords struggle to attract quality tenants and find themselves paying on vacant units.

Other groups that seem to face the threat of tax sale more frequently in recent years include young couples and senior citizens, he said.

The finance director said he sits with homeowners through half hour meetings from seven to 15 times a week every June, July and August.

Felicia Diaz, director of home ownership services for NeighborWorks Blackstone River Valley, said such meetings are the first step in the process, and that homeowners who receive the notifications should contact City Hall immediately.

"If that option doesn't work, which many time doesn't, then contact a HUD approved housing counseling agency by calling the national hotline number 1-888-995-4673," Diaz said.

Rhode Island Housing may purchase the tax sale under the Madeline Walker Act, a 2006 law created after an 81-year-old Providence woman was evicted from her home because she had unknowingly failed pay a sewer bill of $496.

Under the law, effective January 1, 2007, cities, towns, and other taxing authorities are required to notify Rhode Island Housing of delinquent liens well in advance of tax sales. RI Housing will then investigate the factors that have led to the failure to pay the liens and take steps to keep the individuals in their homes.

"This achieves several goals," said Diaz. "The taxing entities receive the funds they are due and Rhode Island Housing provides homeowners with counseling, financial assistance and education to help keep them in their homes."