The "Lienfield" Initiative
Recycling Lien-Infested Inner City
of "Lienfield": "Lienfields" are abandoned inner-city properties
that accumulate unpaid taxes year after year which developers avoid because the
cost of paying all the back taxes often exceeds the economic value of the land.
The Solution - a "Lienfield Initiative": We need work with the
Miami-Dade Housing Agency to create a local program that will allow them to (1)
acquire title to the abandoned lien infested properties, (2) waive the back taxes,
and then (3) make the parcels available for redevelopment.
The Opportunity: In 1999 State Senator Kendrick Meeks sponsored legislative
amendments that reformed Florida's archaic procedures for dealing with tax delinquent
properties. The amendments significantly shortened the time period that local government
had wait to acquire title to lienfield properties. If the land was to be used for
"infill housing development", local government could to acquire the parcels
without having to pay the back taxes and without conveying title to a local municipality.
Local governments, however, need to create mechanisms to take advantage of this
The Law Prior to Senator Meek's Amendments:
AN OVERVIEW OF "TAX CERTIFICATES"
In some states, like New York, local governments can directly take title to seriously
tax delinquent properties and re-cycle them for redevelopment, but that's not the
case in Florida. Instead, investors are solicited to pay off the back taxes owed
by deadbeat property owners. Florida Statutes Chapter 197 gives to the state's taxing
authorities the power to sell tax certificates in order to recoup revenue lost because
of unpaid property taxes. Each year the countyholds an public auction at which
private citizens can bid on the tax certificates. Each certificate is valued at
the amount of the taxes owed for that year on an individual piece of property. The
certificate accrues value at the rate of interest set by the bidding process until
someone with a valid interest in the property redeems the certificate from the county.
At that time the certificate holder recoups his investment when the county pays
him the value of the certificate.
The true value of the certificate to many private holders lies in the provision
giving him the option, after a waiting period, of acquiring the property for the
value of the taxes owed. He does so by applying for a tax deed, paying a deposit
equal to the sum of all taxes owed on the property. Upon receipt of such an application
the Clerk advertises and holds a public sale at which the minimum bid for the property
is the tax certificate holder's deposit. The property is sold to the highest bidder.
Certificates not redeemed, or for which no tax deed has been applied expire 7 years
after they have been issued.
Certificates on economically valuable parcels are gobbled up at the auctions. This
fact allows the county to collect money to replace the unpaid taxes. Additionally,
the waiting period allows the delinquent taxpayer time to pay the taxes and recover
the property, if he so desires or is able to. The certificate holder makes an investment
which he recoups, either by collecting the interest on the certificate, or by acquiring
the property at below-market prices for the sum of the taxes owed on the property.
Thus, the process described above serves several functions.
A very different situation exists with respect to those properties that are not
economically attractive (and thus unable to attract bidders at the tax certificates
actions). The statute requires that the tax collector issue the tax certificate
to the county where: a) there are no bidders at the public auction; or (b) the certificate
represents delinquent taxes of less than $100.00 on homestead property. After a
two year waiting period, the county must apply for a tax deed on the property, (although
unlike the private certificate holders the county is not required to make a deposit).
Upon receiving such an application the Clerk advertises and holds a public sale.
If no one bids for the property, the county can either buy the property by paying
all the back taxes or continue to keep the property available for sale by placing
it on a "List of Land Available for Taxes" for an additional waiting period.
Taxes continue to accrue during this second waiting period. If this period expires
with no takers for the property the title, finally, escheats to the county. The
county was required to then transfer title to the municipality within whose boundaries
the property lies.
SENATOR MEEKS' 1999 AMENDMENTS
1. Shortening the Period Time Property Must
Sit on the "List of Land Available for Taxes"
As stated above, after two (2) years certificate holders may apply for a tax deed
at which time the Clerk holds a public sale (the County must apply for a tax deed
on the certificates that it holds in most cases). The amendment shortens from seven
(7) years to three (3) years the waiting period following the public sale during
which unsold properties will continue to accrue taxes until they are either bought
or, failing to attract a buyer, escheats to the county free and clear of all back
taxes and liens
2. Changes to Allow the County to Forgive Liens on Land it Acquires for
Infill Housing: Under present law the County is allowed to "purchase"
certificate properties at the public sale (which occurs 2 years after the certificate's
issuance) by payment of all back taxes. The amendment allows the Board of County
Commissioners, for properties being acquired for the express purpose of providing
"infill housing", to cancel all county-held tax certificates and omitted
years' taxes on the properties in being acquired.
NOW THAT THE AMENDMENTS HAVE
Outline of the Statutory Steps for County to
Obtain Title to Tax Delinquent Properties
ELEMENTS OF A MIAMI-DADE COUNTY LIENFIELD
Tax certificates are put on sale each for all
delinquent properties. If there is no buyer for a particular tax certificate at
the annual sale, the statute requires that the certificate be issued to the County
- 197.432(5). Following the annual sale and issuance of the certificates, the tax
collector is required to compile a "list of tax certificates sold" showing
the identify of the purchasers and other relevant data - 197.432(8)
Two years after the issuance of a tax certificate
to the County, the County is required to apply for a tax deed on all properties
valued at more than $5,000. It may, if it chooses, also apply for tax deeds on property
worth valued at less than $5,000. In submitting such applications the County, unlike
individuals holding tax certificates, is not required to pay off any other outstanding
certificates on the property. 197.502(3)
Upon such application for a tax deed, the Clerk
shall advertise and administer a sale of property 197.502(5). The opening bid on
all County held certificates shall be the sum of the value of all outstanding certificates
plus omitted years taxes. 197.502(6)(a)
If there are no bidders at the public sale the
Clerk shall enter the land onto a list entitled "lands available for taxes".
During the 90 days after the land is placed on
the list of "lands available for taxes" the County may purchase the land
for the opening bid. Thereinafter, anybody, including the County, may purchase the
land from the Clerk for the opening bid -197.502(7) - except that when the County
is acquiring the land by this mechanism for the express purpose of providing infill
housing, the board of county commissioners may, in accordance with 197.447, cancel
the county held tax certificates and any omitted years taxes - 197.502(11)
Three years after the date that the land was offered
for public sale (reduced from seven years by Sen. Meek's bill), unsold land shall
escheat to the County and all tax certificates and liens against the property shall
be cancelled (that is, the County becomes the
owner). - 197.502(8)
There needs to be a better flow of information
between the Tax Collector and the Miami Dade Housing Agency (MDHA).
Since the County becomes the default holder of
all tax certificates that are not sold at the annual auction, MDHA, early on, should
become familiar with the official "list of tax certificates sold" generated
by the Tax Collector. MDHA should study the list to identify lots that are appropriate
for the infill housing program. The identified parcels need to be tagged and tracked.
The identified lots suitable for infill housing
need to be acquired by the County at the public sale that occurs two years after
the issuance of the tax certificate. Each year a list of the lots acquired by the
County in this manner needs to be presented to the Board of County Commissioners
for the passage of a Resolution that would cancel the outstanding tax certificates
and other back taxes (as provided for in Senator Meek's amendment).
Lots not acquired in this manner get posted onto
the list of "lands available to taxes". Each year following the expiration
of Senator Meeks' shortened waiting period the title to some of these parcels escheats
to the County. MDHA needs to have a mechanism in place to identify which of these
parcels could be used for infill redevelopment (the use of lots acquired in this
manner is not limited to only housing but could be used for commercial, industrial
or other uses)
The acquired lots would then be rolled into the
MDHA's Infill Housing Program (click here for outline of theCoaltion's
"Infill Housing Initiative").