MAHONING COUNTY Treasurer seeks bill on tax lien sales

Only Cuyahoga County can sell tax liens for less than the full amount as the law stands.
By BOB JACKSON
VINDICATOR COURTHOUSE REPORTER
YOUNGSTOWN -- Now that he's got one tax lien sale under his belt, Mahoning County Treasurer John Reardon is going for more.
Reardon is pushing for state legislation that would allow him and other county treasurers to hold negotiated tax lien sales. Such a move would mean millions of dollars in revenue for the county, he said.
In Ohio, the 12 largest counties by population are permitted to hold tax lien certificate sales to recover delinquent taxes. The treasurer sells the county's tax lien against delinquent property to a private investor for the full amount of the back taxes plus an administrative fee.
The buyer then collects the delinquent tax amount from the property owner, plus 18 percent interest. If the money isn't paid within a year, the buyer can foreclose on the property to recover the investment.
First for county: Mahoning County's first tax lien sale was in November 2000. A Florida company paid more than $1.2 million for delinquent taxes on 293 parcels.
Currently, the law requires counties to sell a tax lien for the full amount of back taxes. Reardon wants the law to be changed to allow negotiated lien sales, in which a county treasurer could sell to the highest bidder, even if the high bid is less than the full delinquency amount.
Only counties with a population of at least 1.4 million in Ohio are permitted to hold such a sale. Reardon said the law was specifically written that way so that only Cuyahoga County qualifies, because other large counties were not interested in participating. He has no such reservations, though.
"Granted, we might not receive the full amount of the back taxes, but under current law we can't get anything at all," Reardon said.
Parcels left: There are still more than 20,000 delinquent parcels in the county, but some aren't attractive for a lien certificate sale because the tax delinquency exceeds the value of the property.
"Investors aren't interested in buying liens where they have no chance of recovering even their initial investment, let alone any interest return," Reardon said. That's why he wants to see the law modified.
If an investor buys the tax lien certificate for less than the total delinquency amount, and the property owner does not pay up within the 12-month period, the investor can foreclose and the balance of the delinquency is wiped off the books.
Reardon has enlisted support from other county treasurers to push for the modification and said he is confident is will be approved by the end of this year.
"If this law passes, it will mean we can collect millions and millions of dollars [in delinquent taxes] that would otherwise be uncollectable in Mahoning County," Reardon said.