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The True Costs of Not Paying Your Property Taxes in Massachusetts

by | Mar 30, 2023 | Real Estate Law |

What happens if you are delinquent in making your property tax payment to a city or town? Chapter 60 of the General Laws governs the procedures available to municipalities for collecting delinquent real estate taxes. There are multiple remedies provided under G.L. c. 60, including bringing suit on the debt, presenting the claim against the estate of a deceased taxpayer, placing a lien on the property and selling that lien, taking title for nonpayment of taxes, and even arresting the taxpayer. The most common remedy, and arguably the most severe, is the process by which the municipality seizes absolute title to the taxpayer’s land by tax deed.

Section 53 of Chapter 60, states:

If a tax on land is not paid within fourteen days after demand therefor and remains unpaid at the date of taking, the collector may take such land for the town, first giving fourteen days’ notice of his intention to exercise such power of taking, which notice may be served in the manner required by law for the service of subpoenas on witnesses in civil cases or may be published, and shall conform to the requirements of section forty. He shall also, fourteen days before the taking, post a notice so conforming in two or more convenient and public places.

Simply put, Massachusetts statutory law allows a municipality to take title to a citizen’s property for any amount of delinquent ad valorem tax payments, with constitutionally-inadequate notice, and no hearing or an opportunity to be heard—the unreviewable authority to take title is vested solely in the municipal tax collector, as to whom Massachusetts law imposes no job qualifications. As there is no process, and tax collectors are not required to have any accounting education, experience or skills, no evidence is ever adduced before a neutral arbiter to prove the validity of any real estate tax arrearage before a tax taking occurs. Once title is taken without a hearing, G.L. c. 60, § 53 confers authority on the municipality to take possession and rents, leaving the citizen property owner with the mere equity of redemption. (It should be noted that, while Massachusetts statute vests such rights in tax collecting municipalities, cities and towns very seldom, if at all, seek to exercise these rights – likely because of their constitutional dubiousness.)

To foreclose the equity of redemption, Massachusetts law requires a municipality to file a petition with the Massachusetts Land Court. However, the claims and defenses that may be litigated in such quasi-judicial proceedings are highly-circumscribed; and, according to the late Chief Justice of the Massachusetts Supreme Judicial Court in one of his last decisions in 2020, the tax lien foreclosure process is “archaic and arcane[,]” the relevant “body of law is difficult to understand even for experienced attorneys[,]” and “the complexity and opacity of this process can, and sometimes does, result in catastrophic consequences for landowners[.]” Tallage Lincoln, LLC v. Williams, 485 Mass. 449, 450 (2020). The late Chief Justice, in fact, strongly suggested that this labyrinthine and confusing system is unconstitutional because, on top of these infirmities, “the taxpayer loses any equity he or she has accrued in the property, no matter how small the amount of taxes due or how large the amount of equity,” id. at 453; and Massachusetts law affords taxpayers no entitlement to excess funds when the property is ultimately sold by the municipality. See id. at 453 n.4. Adding further constitutional injury to facial constitutional insult, the quasi-judicial tax lien foreclosure process in Massachusetts does not promise a meaningful opportunity to be heard.

Until foreclosed, the taxpayer can redeem the property by paying the outstanding delinquent tax at an almost usurious interest rate of sixteen percent plus additional fees. However, if a taxpayer is unable to redeem the property during this time, a decree of foreclosure will enter. Most municipalities, however, are usually willing to allow a taxpayer to redeem the property through negotiations pursuant to G.L. c. 60, § 69, at any point before the subject property is sold to a third-party bona fide purchaser for value. In addition, for the first year after the foreclosure judgment is entered, it can theoretically be vacated by the Court.

However, after a recent decision, the standard to vacate this decree is very unclear and exceedingly difficult to satisfy. In Bourne v. Coffey, 101 Mass. App. Ct. 496 (2022), the Massachusetts Appeals Court affirmed the decision of the Land Court, which denied a petition to vacate the foreclosure decree for failure to pay taxes by a personal representative of a decedent whose property was foreclosed just months prior to his death after a near decade long battle with COPD. The court so held because the Recorder’s findings confirmed that the decedent “could have” participated in the proceedings, but affirmatively chose not to do so and, thus, no extenuating circumstances existed to warrant a reopening of the case under G.L. 60, § 69A.

One of the biggest shortcomings with the Massachusetts tax deed foreclosure statute is that it does not provide for the equity in the property after it is foreclosed upon. The failure of the statute to account for the surplus of the value of a property and what the delinquent property tax amount is raises many constitutional considerations.

These constitutional violations have been addressed in other jurisdictions. In July 2020, the Michigan Supreme Court struck down the unconstitutional tax foreclosure system and required counties to compensate victims of home equity theft. That decision left many counties with significant legal liabilities, sending a clear warning to local governments not to steal home equity. Other states in New England have also addressed this issue; Connecticut, Delaware, New Hampshire, and Vermont all protect delinquent owners’ equity in their properties. Each of those states requires property to be sold to the highest bidder and surplus profits to be returned to former owners.

The Massachusetts judiciary has yet to directly rule on the constitutionality of G.L. c. 60. It has been subtly suggested in recent opinions that, if confronted with the constitutionality issue, the Courts may agree that that statute violates federal and state constitutional protections. See Bourne v. Coffey citing Tallage:

Coffey decries the harshness of the resulting loss of equity, but does not challenge the constitutionality of the statutory scheme. We acknowledge the potential harshness of the statute as applied in certain circumstances. We are not the first court to do so. As noted by the Supreme Judicial Court in Tallage at 453 n.4:
‘In Kelly v. Boston, 348 Mass. 385, 388, 204 N.E.2d 123 (1965), this court considered the legislative history of the statutory scheme governing tax lien foreclosures and determined that the Legislature intended that the process result in forfeiture of the taxpayer’s equity to the municipality. The parties in that case did not raise any constitutional challenge, and [the court] did not address the constitutionality of the statutory scheme. Here, too, the parties have not raised a constitutional challenge, and we do not address the constitutionality of the statutory scheme.’

Representatives in the Massachusetts legislature have recently introduced a bill that aims to protect home equity in the tax foreclosure process and improve notice provisions for property owners facing foreclosure. If passed, House Bill 3053 would require municipalities to provide clear notice to property owners when their properties are in danger of foreclosure. Instead of legal jargon that many property owners may not understand, the required notice would state in bold letters that property owners are in danger of losing their homes if they fail to pay tax debts before foreclosure. In addition to requiring clear notice, the legislation would require lienholders to auction foreclosed properties to the highest bidder, dispersing proceeds in a manner consistent with traditional mortgage foreclosures: applied first to the tax debt and other liens on the property, with all remaining proceeds returned to the original homeowner.

If you received any notice from the town or city in which you reside regarding delinquent property taxes, you should act promptly to remedy any delinquency. If you receive notice that your property has been taken you should immediately consult with an attorney.

Copyright (c) 2023-2024 by Jeffrey T. Angley, P.C. All rights reserved.

Disclaimer: The information contained in this post is general in nature and for educational purposes only. No personal legal advice is being provided. If you have an actual legal issue that needs to be addressed, you should seek the advice of competent legal counsel. This post does not create an attorney-client relationship between the reader and Jeffrey T. Angley, P.C., Phillips & Angley or their attorneys.


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