Liens sold on 123 properties at Woonsocket tax sale

Liens sold on 123 properties at Woonsocket tax sale

WOONSOCKET - In a tax sale that generated more than two and a half times the expected amount, the city of Woonsocket pulled in nearly a half-million dollars by selling liens on properties with past due taxes or water and sewer bills.

Finance Director Thomas Bruce told the Budget Commission Monday that the sale was a reflection on the city's tough economic times.

In July, Bruce had predicted $80,000 from investors buying liens on real estate, a figure last week's sale nearly tripled.

The sale, which took place Aug. 23 at City Hall, brought in more than 50 investors, lured by the prospect of yielding high interest rates on the properties over the next year.

The parcels up for grabs included any property on which the owner owed the city more than $100 on real estate taxes due prior to Feb. 15, 2013, or water and sewer fees from 2012. Letters warning of the impending sale of the liens were sent to 906 homeowners in July, and while many settled their debt with the city, 180 remained when the auction, accomplished in two hours, began last week.

Participants paid the past due bills on 123 properties in exchange for the liens, which will begin immediately to accrue interest at a rate of 10 percent. If the owner has not paid off the original bill plus interest after six months, rates begin rise, earning 1 percent more in interest each month in the final 7 through 12 months, for a total of up to 16 percent.

For the city, the sale means revenue, bringing in around $221,000 in past due taxes on 46 properties and $183,000 in water and sewer fees on another 77 for a total of around $404,000.

But for the owners, tax sales can mean increased hardship as they struggle to escape a cycle of debt.

"Some believe its a sale of their property and its not," said Bruce. "Its the sale of a tax lien on your title, not to be confused with foreclosure by the bank."

Bruce said he fears that those unfamiliar with the process will not realize they still have time to act, and that help is available.

"They have another year," he explained.

Residents hit with a high-interest lien who are unable to pay the bill should find a HUD approved Housing Counseling Agency by calling the National hotline number at 1-888-995-4673.

"It's a really sad thing," Bruce said. "I go through a lot of tissues in my office."

Lien holders can petition Superior Court to begin sale of the property after a year has passed, but so far, Bruce said, that has seldom happened.

The liens are disbursed throughout Woonsocket, effecting homeowners in every district. In real estate alone, three properties on each of the roads: Lincoln, Providence and Grove Streets had liens sold.

And for city residents in financial hardship, the pain may have only just begun. The recent sale does not reflect the troubles of those unable to pay the new supplemental tax, or the permanent 23 percent jump in the levy. Those homeowners could likely face more hardship by next August if they can't pay the bill.

The supplemental tax, which is currently being challenged in Superior Court by a group of city taxpayers in a class action lawsuit, is due Friday, Aug. 30. The group is holding a meeting at the Woonsocket Elks Lodge on Social Street on Wednesday, Sept. 4 to update residents on their progress. Those who have not yet joined the suit, but in interested in learning more, are encouraged to attend.

The city's financial plan projected collection of $1.6 million, or 60 percent of that $2.5 million tax addition by the end of the month. As of Monday, Bruce said the city had collected only 21 percent.

Still, he said he believes they'll reach the goal, as most bills come in around three days before or four days after the deadline.

"Can we do a million in 10 days?" he asked. "I think we're going to."


A tax lien is a lien imposed by law upon a property to secure the payment of taxes. A tax lien may be imposed for delinquent taxes owed on real property or personal property, or as a result of failure to pay income taxes or other taxes. A number of individuals across the country are losing their houses to tax liens, held against their houses for owed property taxes.