A brisk wind made a whistling sound as it whipped past the empty, ranch-style home at 128 Squan Beach Road.
The neatly-kept house, located on a lagoon in the Curtis Point neighborhood, has the distinction of topping Brick’s list of 1,007 properties with unpaid taxes released Monday. Taxes owed on the home, listed as being owned by a couple from Mountainside Borough, Union County, top $27,000 including interest. All of the properties on the list will have tax liens up for sale in a public auction set for April 5.
In the sale, bidders vie to buy up tax debt in a “Dutch auction” round of public bidding. Once a buyer successfully bids down an interest rate which the delinquent taxpayer will be charged, the lienholder satisfies the tax debt with the township immediately and begins a two-year waiting game before foreclosure proceedings can begin, Pezarras said. During those two years, the property owner can pay back the lienholder, with interest.
It’s a ritual that occurs each year in Brick and other municipalities. Some property owners will show up to pay their delinquent property tax or Brick Township Municipal Utilities Authority bill minutes before the auction begins, Pezarras said. Others will let the liens be placed on their properties and use it as a “loan they don’t have to apply for” because they can’t afford their tax obligations.
“Someone is basically lending you money, this third-party lienholder, and you don't have to apply for that loan,” said Pezarras.
Altogether, the 1,007 properties listed on Brick’s website are connected with outstanding bills to the township or the BTMUA totaling $1,812,312. Lienholders will buy up most of the debt, Pezarras said, and the township has the option of taking legal action, including foreclosure after six months, against properties whose tax debt isn’t scooped up by private investors.
The debt ranges from obligations of about $20 – most likely balances remaining on water or sewer bills from the previous fiscal year, according to Pezarras – to the more than $23,000 tax bill left unpaid from last year on the Squan Beach Drive home. The first quarter tax bill for 2011 on the same home remains unpaid as well, according to a public records search, adding another $4,766 to the bill that isn’t being included in this year’s tax sale. A message left at the phone number of the Mountainside home where the property owners live was not returned.
There is no minimum amount of debt owed before a tax sale is triggered, Pezarras said. And there is no minimum amount required for a lienholder to foreclose on a property if the debt, interest and other penalties are not satisfied by the two year deadline.
“If a lien was sold for $10, and it's not satisfied, you could foreclose on it,” Pezarras said.
That rarely happens, he added, but interest rates up to 18 percent and various penalties associated with tax liens can begin to add up over time – all while new tax debt is accruing each quarter for a property owner.
Residents who have outstanding tax bills have only way of avoiding being placed into a relationship with a lienholder, Pezarras said.
“They can stop the lien from being sold as long as they come in prior to the sale and satisfy that amount.”