DC's Property "Fire Sale"

• March 7th 2011

by UrbanTurf Staff

✉️ Want to forward this article? Click here.

Having tried a couple times before, DC is holding a “fire sale” of tax liens on residential and commercial properties in the District that have unpaid property taxes, according to The Washington Examiner.

The Examiner reports that “a total of $10.2 million is owed on 353 delinquent properties, some of which owe more than $200,000 in taxes” and that starting bids at the auction, which will be held on Monday, March 14th, will start at $300.

It is important to note that the properties are not being auctioned, but rather the city’s property tax liens against the properties. It’s a little complicated but the gist of it is: If you are the winning bidder for one of the property tax liens, you may have the opportunity to foreclose on the property in question because of the unpaid taxes. However, the current delinquent owner still has an opportunity to pay those outstanding taxes, in which case you don’t get the property. If the owner never pays what is due, you can foreclose and win title — though you’ll have to pay down the overdue property tax first.

Back in 2009 when UrbanTurf wrote about a similar DC tax lien auction, a reader commented on how the hysteria at these events can result in some unfortunate mistakes:

I went to an auction in 2005 and it was absolutely insane. People acted as if they were buying the property itself – $1,800 liens were selling for tens of thousands. I remember a few touched or exceeded $100K. One poor woman, who didn’t know what she was doing, mistakenly bid on and bought the tax lien on a parking spot [!] when her kids distracted her; she paid $35K for the lien on a parking spot worth $35K.

In the past, these auctions have been held at 941 North Capitol Street NE (map), but there is no word yet on where this auction will occur.

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/dc_s_property_fire_sale/3109.