Danny and Maura Walker bought their house on Margaret Mitchell Drive 19 years ago. It’s five minutes from Danny’s job in Buckhead and close to downtown, and they like living ITP.
So the couple has rejected recent offers from developers who are razing older houses and replacing them with mini-mansions. They don’t want to move.
But the Walkers were put at risk of losing their property after they paid their 2010 taxes a day or so late and incurred $12.78 in penalties and interest.
Danny Walker said the Fulton County tax commissioner’s office never notified him of the charge. He only found out when a private company, Vesta, sent him a bill for $27.
The bill came as a folded-over sheet of paper, sealed with perforated edges, marked with pre-paid postage and a company name he didn’t recognize. It looked like junk mail or some kind of scam, and he almost threw it away.
Walker is lucky he didn’t. Overdue tax bills, if unpaid, can balloon into larger sums, and the lien-holder can recoup the debt by having the county sheriff auction the tax deed to the property. If that happens, and the property owner doesn’t pay off the taxes, penalties and fees within a year, the owner faces the possibility of losing the property.
What happened to Walker is a byproduct of a system where the tax commissioner rapidly slaps liens on properties for overdue bills, then rapidly sells those liens to third-party investors. No other county in Georgia operates that way.
Sometimes, the process moves so quickly that taxpayers who settle up weeks or a few months late get turned over to collectors over late fees or interest owed. Walker’s bill was among hundreds of tax liens for less than $50 that Fulton County Tax Commissioner Arthur Ferdinand apparently sold to private tax collectors from 2002 through 2011, according to an AJC analysis of tax lien transfer data.
Ferdinand says the only time he would sell a tax lien under $50 is when there are multiple liens on a property where the total amount owed is greater than $50.
"If any liens less than $50 were inadvertently transferred they have been subsequently reversed," Ferdinand wrote in response to questions from The Atlanta Journal-Constitution.
In a follow-up question, the AJC pointed out that Ferdinand’s tax data shows transfers of involving 870 properties where the combined value of liens from all years was less than $50. Ferdinand replied, “Very possible they were reversed or were not actually transferred to begin with.”
Vesta Holdings – the company that far and away purchases the most tax liens from the Fulton County office – also said that it does not request the transfer of liens valued at less than $50 unless it has other liens on the property in a greater amount.
But there are circumstances where it will acquire the liens, company officials acknowledged in an email response to AJC questions.
“Frequently, taxpayers will pay their tax bills late and not pay interest and penalties, which results in the lien being reduced to less than $50,” the email says. “We may have requested transfer of the lien prior to this late payment. Taking transfer of small liens actually results in an economic loss to our Company but would appear to be unavoidable in certain circumstances.”
Soon after County Commissioner Liz Hausmann took office in early 2011, she said she started receiving complaints from constituents about being turned over to collections firms over small debts that they didn’t know about.
She spoke to Ferdinand and, according to correspondence from her office to his, he agreed to send a second bill and a lien notice when debts are $50 or below. Hausmann said people shouldn’t be at risk for losing their homes over penalties and interest they may not know they owe.
“That’s been our issue, the lack of notice,” she said. “A lot of times, the envelopes don’t look like what they are.”
In his written response, Ferdinand said that the transfer data alone would not provide accurate information on the lien sales. But he did not specify what other information would be needed to ascertain the lien sales and he would not consent to an interview.
In spot checks of a tax database on the tax commissioner’s website, the AJC found numerous small tax liens that were transferred without later being corrected. Property owners contacted by the AJC also said they received bills from Vesta for under $50.
“It’s absurd,” Walker said. “I can’t imagine that anybody thinks I’m trying to get away with not paying $12 on my taxes. It generates money for somebody.”
About the Author
