Flagler County, FL Property Tax Delinquencies Down 26.35% from Last Year

Even with the state’s highest unemployment rate and flood of distressed properties, more owners are making sure their property taxes are paid.

Palm Coast, FL – May 14, 2010 – Flagler County, FL’s 2009 Property Tax delinquencies are 26.35% lower than last year’s. In spite of the abundance of distressed properties (lender-owned via foreclosure or deed in lieu and short sales) and the state’s highest unemployment rate, Flagler property owners are still paying their property taxes.
Property tax bills are mailed in late October. They’re due November1st and become delinquent on April 1st. There is a sliding scale of discounts to encourage property owners to pay early. Once delinquent, taxes can no longer be paid via business or personal check. The delinquent tax roll as of May 1st is subject to a public notice requirement. Even If taxes are paid during May, they will remain on the advertised delinquent tax roll.
The Flagler County Tax Collector’s office is fulfilling its legal obligation to advertise (publish) the delinquent tax roll; not once, but three times. Wednesday’s newspaper contained several supplemental pages listing the role of delinquent 2009 property taxes. Surprisingly, this year’s list was shorter than last year’s. Though the number of taxable parcels in the county grew from 77,567 to 79,567, the number of parcels making the delinquent list dropped 4.18%, from 6,572 to 6,297 for the 2009 tax year. Delinquencies represent 7.91% of tax year 2009 parcels vs 8.47% the previous year.
The total of delinquent 2009 taxes is $10,224,005.65; down 26.35%. The higher advertised $11,292,018 sum due includes penalties, interest and advertising expenses totaling $1,068,013.
This year’s list of delinquent taxes does not include parcels subject to bankruptcy. For instance, you will not find the nearly $1 million in unpaid taxes due from Crescent Resources LLC and its affiliated subsidiaries.
What happens next?
Even If taxes are paid during May, they remain on the advertised delinquent tax roll. Owners can still pay delinquent taxes (including penalties, interest, and advertising expenses through May. The next step for parcels remaining unpaid after May is the Tax Certificate Auction. The on-line Tax Certificate Auction began May 5th and closes June 1st.

Florida Tax Certificate Process  
Source: FloridaTaxSale.com

Please note:
While the following information is totally accurate, it is not meant to be a comprehensive explanation of Chapter 197 of the Florida Statutes which is the law governing tax certificates and their auction or sale.

What are tax certificates?
In Florida, taxes become due November 1 and become delinquent if not paid by April 1 of the following year. The tax collector in every Florida county then prepares a list of the properties with delinquent taxes, and sends out notices to all property owners with unpaid property taxes stating that a tax certificate will be auctioned on or before June1 if the taxes are not paid.
The tax certificate’s face amount consists of the sum of the following: delinquent real estate tax (unpaid amount), interest (1.5% for each of the months of April and May on the delinquent amount), Tax Collector’s commission (5% on the delinquent amount plus interest), and the newspaper’s advertising charge (& sale costs or other costs).
Tax certificates are a first lien against property which means there are very few other claims against a property which would be paid before the tax certificate lien. It even supersedes some IRS liens.

The Auction
The property taxes become delinquent on April 1. On or before June 1 the Tax Collector must start the tax certificate auction (Note: tax certificates and the auction of them is governed by Chapter 197 of the Florida Statutes. All requirements mentioned in this document come from Chapter 197 without the legalese).
To make a simplified analogy, think of the purchase of a tax certificate as a loan to the property owner. In return, the investor receives interest on the money loaned.
In Florida, the tax certificate conveys no property rights. It is simply a “loan” carrying an interest rate.
The certificates are advertised once a week for three consecutive weeks before the auction.
The interest on a certificate ranges from 0 to 18%. Bids are entered, with the certificate going to the bidder willing to take the lowest interest rate. Simple interest accrues on a monthly basis. If the certificate carries an interest rate of 12%, then interest will accrue at 1% every month until the certificate is redeemed. Once a certificate is issued, providing the redemption of the certificate is after May 31, the least an investor will receive in interest is 5% (Florida Statutes) except for a winning bid of 0%. A certificate won with a 0% bid earns no interest. The investor is guaranteed 5% over the life of the certificate IF THE CERTIFICATE IS REDEEMED. Certificates are good for 7 years from the date of issuance. At the end of 7 years, the certificate is retired (no longer exists). If the certificate is not sold to an individual, a certificate will be issued to the county bearing an interest rate of 18%, and may be purchased by visiting the tax collector’s office. Most counties today do not issue actual certificates anymore. The certificate is kept as an electronic file at the Tax Collector’s office.

Now you own a tax certificate, so what can happen next?
A certificate holder is not allowed to contact the owner of the property carrying the delinquent taxes for two years. Such contact can result in costly legal action.
When the owner pays the delinquent taxes, the interest is calculated and a check is sent out with a notice to the certificate holder.
The certificate can be sold and transferred (for about $2.25) to another name.
Let’s say the owner doesn’t pay the delinquent taxes. Two years from the date of the delinquency (April 1) but no longer than 7 years, the tax certificate holder can request a tax deed application. This process starts the foreclosure of the property. To foreclose the property, the certificate holder making application for a tax deed has to pay the Tax Collector an application fee, a title search fee and all amounts required for redemption or purchase of all other outstanding tax certificates, interest, omitted taxes, and delinquent taxes as well as applicable Clerk of Circuit Court fees, relating to the real estate. In most cases the property is scheduled to go to sale at public auction by the Clerk of Circuit Court within 3 to 4 months from the date of the tax deed application. Holding the certificate creates no advantage towards owning the property. The highest bidder becomes the owner of the property. If the property is a non homesteaded parcel, the opening bid is the amount of the taxes, accrued interest, plus costs and fees involved in a tax deed application. If it is a homesteaded property, the opening bid is half the assessed value plus the tax certificate face value and costs. IF THE PROPERTY DOES NOT SELL, THE TAX CERTIFICATE HOLDER IS REQUIRED TO TAKE DEED TO THE PROPERTY. IF THE PROPERTY IS NOT SALEABLE, THE CERTIFICATE HOLDER LOSES THE ENTIRE TAX CERTIFICATE INVESTMENT. BUYER BEWARE. Know what you are purchasing.

County Held Certificates
Certificates that don’t sell at auction become the property of the County and are offered for public purchase at a time and place announced after the auction ends. The unsold certificates carry an 18% interest rate per Florida Statute beginning on the date the certificate was struck off to the County. In Flagler County, a five percent minimum return is guaranteed on certificates purchased from the County and later redeemed. 

2 replies
  1. Tom
    Tom says:

    Tax Delinquencies

    Toby one of the factors that is effecting the lower tax delinquencies is that the number of foreclosures and short sales. When the seller gets behind in their mortgage payments and the banks files the Lis Pendens and the property taxes are due the bank pays them, normally at the end of November. So even if the property is not in foreclosure yet these taxes are paid. So this is good for the tax revenue and we also know these type of transactions are not so good for the value of home prices

  2. George Meegan
    George Meegan says:

    First position is property tax ,but

    If the courts find assets values different than the Property Appraisers values, they will not pay the bill until the figures agree with court. That’s what happened with the Landmar properties here in Flagler County, and it put the court in the drivers seat, as it would not pay unjust taxes.Since that happens, the county has to wait, but will get paid justly, as assest are available. If assests were not, as in chaper 7 procedings, the buyer of the property would have to pay, again posibly a lower figure if they argued the justness of the appraisal.

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