Norfolk auctions off homes of delinquent taxpayers

NORFOLK

Officials in the city treasurer's office have put property owners on notice: If you don't pay your real estate taxes, they'll be coming for you.

After years of allowing overdue real estate tax bills to mount, the treasurer's office on Thursday night put a handful of properties up for public auction.

Property owners took notice. Of the 22 houses and lots slated for sale, a dozen owners came forward to pay off their bills. The remaining 10 properties all were sold, at prices that recouped Norfolk's costs and most of the back taxes.

"We call that a win," Deputy Treasurer Carl Cox said Friday. "There's no doubt this is going to send a clear message to everybody. This real estate tax money is important to the city."

Last summer, The Virginian-Pilot reported that Norfolk had the region's biggest backlog of delinquent real estate, and the city had failed to adopt the aggressive collection practices of other localities.

As of April, Norfolk had roughly $13 million in uncollected real estate taxes - some of which had been overdue for more than 20 years.

That figure has since shrunk dramatically. After a list of delinquent taxpayers was published online, it dipped to $9 million. And since Norfolk adopted more stringent policies - including more frequent warnings to owners who became delinquent - the treasurer's office has collected $1.5 million more than it did last year, officials said.

On Thursday night, several extremely overdue properties changed hands.

The owners of a vacant house at 1050 Lindenwood Ave. hadn't paid taxes for more than two decades. The two-story Cape Cod cottage had collected 11 code violations in the past three years, for overgrown weeds, debris and general lack of maintenance.

At auction, the house fetched a price of $30,000, which came close to covering the long overdue bill, Cox said.

"Some of these, you're not going to get all the taxes," he said. "But we're certainly going to get most of it. And now maybe somebody's going to fix it up and pay the taxes on it from now on."

Until Thursday, the city had been handing over delinquent accounts to private attorneys.

An auction occurred only when a buyer expressed interest in a house, and the process wasn't widely publicized. The city sold fewer than a dozen houses a year through that process, leaving a backlog of hundreds of overdue properties.

Norfolk's new procedure uses a private auctioneer, who e-mails thousands of residents and investors, posts signs on each property and advertises online. Thursday night's auction drew a crowd of about 220 to the Workforce Development Center. Only those who were current on their private property and real estate tax bills were allowed to bid.

"We actually had some people write us some checks right there," Cox said.

A house at 810 Fremont St. that was more than three years and $4,000 behind on taxes had failed to sell at an attorney's auction on the courthouse steps last year, but raised $12,000 on Thursday. Another single-family vacant house in Ingleside drew a heated bidding war and sold for $119,000.

After attorneys, auctioneers and taxes are paid, any leftover money will go into a fund with the Circuit Court for two years, so the previous owners can claim it. If it is unclaimed, Cox said, that money goes to Norfolk's general fund.

Cox said Norfolk's next tax auction, in April, may include as many as 40 properties, including a larger number of vacant lots. The trick, he said, will be to find a space big enough to accommodate all the bidders.

"We're going to make this as regular as possible, because we have to clean these books up," he said.

"And I'm certainly going to have to look for a bigger venue."

Meghan Hoyer, (757) 446-2293, meghan.hoyer@pilotonline.com