Some tax matters are pretty simple. For example, if you don’t pay real estate taxes on property you own, sooner or later you will lose the property. Also, real estate taxes are close to universal and at least in every state I am familiar with payable at least annually. So how is somebody like Frederick Cornelius, a sophisticated real estate investor according to to the Appellate Court of Connecticut, surprised when property that he never paid taxes on is lost in a tax sale ?
According to the decision, he had acquired a warranty deed from Mercury Mortgage Company on property located at 78 Beacon Street in Hartford motion for summary judgment was a copy of the undelivered letter, the authenticity of which was not contested. The letter was stamped: “RETURN TO SENDER NOT DELIVERABLE AS ADDRESSED UNABLE TO FORWARD.” The defendants attempted to find another address for Mercury and to locate an agent of Mercury. Ultimately, the defendants sent notice to Mercury’s attorney, Hunt Leibert. The defendants did not provide notice to the plaintiff because his interest in the property did not appear of record.
Mr. Cornelius thought the tax collector should have tried harder, but the Court did not agree:
In the present case, the letter was not returned marked “unclaimed,” but rather “undeliverable.” Further, the marking indicated that the post office was unable to forward the notice. Under those circumstances, additional mailings to the same unworkable address most likely would have been futile. The defendants took additional steps, however. They searched to discover whether Mercury’s mailing address was accurate and, upon discovering that the unworkable address was, nonetheless, the apparently correct mailing address, attempted to locate Mercury’s agent of service. Upon discovering that Mercury’s agent of service had resigned and no new agent had been appointed, the defendants sent all other notices to persons who had been Mercury’s attorneys.
Mr. Cornelius also thought that the tax collector should have been able to figure out he was the real owner:
He contends that his interest was reasonably ascertainable given his longstanding continuous occupation of the property and knowledge of his name and address by other city agencies and employees who had interacted with the plaintiff while he occupied the property.
There were also some procedural issues in the appeal that are way too lawyerly for me, but what really intrigues me is what the story behind the story is. Was Mr. Cornelius just absent minded in not recording the deed or was he up to something ? How do almost three years worth of real estate taxes sneak up on you like that ? I have written about a few other cases where people lost or almost lost homes to tax sales, where I could work up a lot of sympathy for them, but it is kind of hard to do that in this case. As is often the case, I regret that I am but a tax blogger with a day job rather than an investigative reporter, because I think the rest of the story might be even more interesting.
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Originally published on Forbes.com on September 11, 2012