Tax Foreclosures and Competing Liens

When property owners stop paying their property taxes, it’s a good bet that they’ve been ignoring other obligations concerning those properties as well.  Weeds grow chest-high, houses slowly crumble, and neighbors begin to use the lots as informal trash dumps.

The properties become dangerous eyesores, forcing local governments to mow the weeds, demolish substandard housing, and remove the trash.  The clean-up costs become liens on the properties that compete with property tax liens if the properties are sold at foreclosure.

I’ve described the legal requirements of tax foreclosures in past blog posts and bulletins, focusing in particular on the priority of competing liens.  My colleagues have posted on the mechanics of nuisance abatement and demolitions of substandard housing.

Today’s post focuses instead on the policy concerns that arise when a tax foreclosure involves competing liens held by different local governments—specifically,  the decision by the foreclosing government to offer an opening bid and, if such a bid is offered, to set its amount. Read more »

Local Acts and General Laws: Another Look

In a prior blog post I wrote about the patchwork of local and general laws that collectively define local government authority. I noted that it can be difficult to determine when a general law does or does not override an earlier-adopted local act. Taking another look at this question, it appears that North Carolina case law recognizes a presumption in favor of the continuing validity of a local act, unless it is explicitly overridden by a subsequent local or general law. This blog post discusses the presumption and how it might affect the analysis of the state laws that define local government authority. Read more »

When Can a Biased Elected Official Participate in a Zoning Decision?

A rezoning petition is pending before the city council.  The parcel involved is zoned for single-family residential use.  The landowner wants to build a retail store on the site, so she is seeking a change in the zoning to a commercial zoning district.  The planning board has recommended approval, noting the adjacent street can handle the additional traffic and that the land use plan calls for more commercial activity in this general area.  Most of the neighbors strongly oppose the rezoning, objecting to the extra traffic, noise, and “commercialization” of their quiet residential neighborhood.

The day before the public hearing on the rezoning the local newspaper has a front page story about the controversy.  The article quotes the landowner on her plans and the leader of the neighborhood opposition about his concerns.  The article then includes the following –

 Things could get interesting when the council holds its public hearing tomorrow night.  Council member Hamilton Berger said he strongly supports the proposed rezoning.  Burger said the jobs that will be provided will greatly benefit the community and the tax revenues from this business will help reduce the tax burden on town residents.  “I’m pumped.  I can’t wait to help cut the ribbon at the store opening,” Burger said. But Council member Della Street also expressed strong opinions about the rezoning.  “I got elected to prevent exactly this type travesty,” she said. “Hamilton and his fast talking buddies may throw a lot of figures around, but I know in my heart just how bad this would be for the neighborhood.  I don’t care what they say tomorrow at the hearing, I can tell you right now I’m going to do everything I can to stop this terrible project.

We have two council members with strongly held opinions about a pending land use decision.  Both have proudly and unequivocally announced prior to the public hearing just how they intend to vote.  Does this pose a legal problem?  If they have indeed already made up their minds prior to the hearing, can they still vote on the rezoning?

Read more »

Accountability Requirements for Certain Entities that Receive Appropriations from Local Governments

As discussed in a previous post, local governments have broad authority to appropriate monies to private entities (including nonprofits, corporations, associations, and individuals). The monies, however, must be expended by the private entities only on projects, services, or activities that the local government could have supported directly. In other words, if a municipality or county has statutory authority to finance a particular program, service, or activity, then it may give public monies to a private entity to fund that program, service, or activity. But a municipality or county may not grant public monies to any private entity, including a nonprofit agency or other community or civic organization, if the monies ultimately will be spent on a program, service, or activity that the government does not have statutory authority to fund directly.

According to the North Carolina Supreme Court, a unit’s governing board is responsible for ensuring that any funds appropriated to a private entity are spent for a statutorily authorized public purpose. See Dennis v. Raleigh, 253 N.C. 400 (1960). How does a local government satisfy this oversight requirement? Generally, a local governing board has much discretion in establishing accountability criteria for grantees. Effective October 1, 2012, however, the General Assembly will require certain entities that receive public funds—namely nonprofit corporations—to comply with specified transparency requirements. Read more »

North Carolina’s Voter Identification Requirements

UPDATE November 2013: The 2013 General Assembly enacted new voter identification requirements, including the requirement that voters to show photo identification, beginning in 2016.  See this Coates Canon post:  2013—A Year of Election Law Changes.

UPDATE February 2017:  In July 2016 the federal Fourth Circuit Court of Appeals issued an injunction against enforcement of the provision of the 2013 legislation which required voters to show photo identification.  The matter is before the United States Supreme Court.

Should you have to show a photo identification when you come to the polls to vote?  In 2011, the North Carolina General Assembly passed such a requirement (in H 351) but the governor vetoed it.  For the time being, then, we do not have an at-the-polls photo ID requirement in this state.  What ID requirements do we have?  When do voters have to show identification? Read more »

State-County Special Assistance Program – What Might the Future Hold?

Last week the N.C. Department of Health and Human Services entered into a settlement agreement with the federal government (see press release here). Pursuant to the agreement, the state is committed to implementing fairly significant changes related to housing and community support services for individuals who have mental illnesses. Anticipating the possibility of this settlement agreement, the North Carolina General Assembly included several related provisions in the budget bill this past summer. I briefly discussed the changes during one of our recent Local Government Legislative Update webinars (on-demand versions now available here and here) and since then the story has continued to unfold. While I am not planning to work through all of the details of both the settlement agreement and the legislation, I do think it is worth highlighting some of the recent changes to the State-County Special Assistance program and considering whether additional changes may be coming in the future. Read more »

Early Enforced Collections

Property tax bills for the 2012-2013 fiscal year are arriving in mail boxes across North Carolina. Thankfully most taxpayers will pay up without further encouragement. But plenty will not, and it’s a long four months until these bills become delinquent in January 2013.

The general rule, of course, is that enforced collection measures such as attachment and garnishment or foreclosure may not begin until taxes become delinquent. Are tax offices’ hands completely tied until then? Or can tax offices take proactive measures before the delinquency date to pursue taxes that seem unlikely to be paid voluntarily? Read more »