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Property tax sale doesn’t mean instant ownership

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This home at 149 Pitt Street is one of four remaining homes destroyed by flood waters five year ago that the City of Franklin will purchase through a tax sale. Scott Roberson / Daily Journal
This home at 149 Pitt Street is one of four remaining homes destroyed by flood waters five year ago that the City of Franklin will purchase through a tax sale. Scott Roberson / Daily Journal

As many as 200 properties, ranging from a 1,200-square-foot house in Edinburgh to a 12,000-square-foot home in the Center Grove area, will be up for auction because of unpaid taxes this week.

The county has set 200 properties, including homes, business buildings, vacant lots and small pieces of land, for auction where owners have missed at least three property tax payments. At the annual sale Friday, the county will try to collect about $1.1 million in overdue taxes, ranging from $140 for part of a residential lot on Hants Lake in Prince’s Lakes to more than $220,000 for the site of a former motel near Interstate 65 in Franklin.

The number of properties set for sale is higher than recent years. But the list could get significantly shorter in the days leading up to the auction since some property owners will wait until the last opportunity — occasionally 30 minutes before the sale starts — to pay the overdue taxes and keep their property, Johnson County Auditor Jan Richhart said.

Buying a property at this week’s tax sale doesn’t guarantee you will become the new owner. Buyers bid in the auction to pay the overdue taxes on a property in exchange for a new lien and 10 percent interest. If the original owners want to keep the properties, they must pay that amount to the winning bidder within a year. If a year passes and the original owner doesn’t pay, the buyer can get a deed from the court and become the new owner.

How it works

What’s eligible: Any property that has at least three missed property tax payments spanning an 18-month period is placed on the list. Properties that are wrongly listed, are going through bankruptcy or have owners who make payments are removed. The owner can make payments up until 30 minutes prior to the sale and keep his property.

Auction: The county has an auction, starting with the overdue taxes as the minimum bid. Bidders can raise the price from there.

Winners: Winning bidders pay the amount they won in the auction and get a new lien on the property for that amount plus 10 percent interest. The buyer has to wait one year during which the original owner can pay the lien amount and keep the property. After one year, the buyer can get a tax deed from the court and become the new owner.

A lot to buy

The county’s annual tax sale is scheduled for Friday. Here’s some information about what’s for sale:


Number of properties listed

 for sale as of Friday.

$1.1 million

Total overdue taxes and penalties


Number of properties eligible

for tax sale in July


Largest overdue amount on a single property, 2180 E. King St., Franklin, the former Red Carpet Inn site.


Number of properties that were for sale in the 2012 tax sale

Investors will buy properties to make that 10 percent profit, and the county gets the money it hasn’t been able to collect for at least 18 months. That’s money that cities and towns, schools, libraries and fire districts expect to get each year but then have to do without when property owners don’t pay.

Few properties get new owners through the tax sale each year. In 2011, 66 properties sold in the tax sale, and 14 of those buyers became the new property owners after the yearlong waiting period, according to the Johnson County Auditor’s Office.

The list of properties for auction is always much longer when put together in July. But the number is reduced as county staff remove properties that were listed as a mistake, are going through bankruptcy or have had the owner come in and make a payment. For example, in 2012, 601 properties had more than three missed payments in July, but only 95 remained by the day of the tax sale.

“We never know how many we’re going to have,” Richhart said. “Some people literally wait until the last day.”

Most of the remaining properties have overdue taxes of less than $15,000. For example, a Needham Township homeowner owes $208 on less than a quarter-acre piece of land that is part of his back yard but taxed separately from his home lot. The strip of grass is landlocked between the owner’s home, his neighbors’ land and a farm field. A Greenwood home near County Line Road is up for auction for $1,500 in overdue taxes. And $9,800 is owed on a vacant lot near Johnson Avenue and Cincinnati Street in Franklin.

The former Red Carpet Inn site in Franklin near I-65 and State Road 44 has the largest overdue amount by far. The motel was demolished by the city in 2010 as a safety hazard, and more than $220,000 in taxes, penalties and fees are past due on the land, including an $80,000 lien for the costs Franklin paid to demolish the buildings. The next-highest overdue total is a Franklin home on Jefferson Street with about $55,000 in past due taxes and fees, according to county records.

Also on the list are four homes that are included in Franklin’s buyout of flood-damaged homes but that the city has not been able to purchase yet.

If properties don’t sell at the auction, they will continue to build up overdue taxes and will then be listed again the next year. However, the county plans to try a new type of sale in the spring, where properties that don’t sell in the tax sale can be offered a second time, Richhart said.

The tax certificate sale, or commissioners sale, allows the county to try to sell the properties for a percentage of the overdue taxes. Buyers also have a shorter waiting period, meaning they could get a deed for a home or lot more quickly than if they bought it through the tax sale. The new type of sale could help find new owners who will regularly pay taxes on a property or encourage owners to pay their overdue amounts before someone else buys their land, Richhart said.

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