Lien sales can prove lucrative

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— As April 15 approaches, paying someone else's taxes seems like the last thing anyone would want to do.

But if it is property taxes paid through the Routt County tax lien sale, it can become a lucrative investment.

Property owners have until April 30 to pay their Routt County property taxes. If they miss the spring deadline, they have to pay a 1 percent late fee each month.

If they still haven't paid by September, the Routt County Treasurer's Office begins to advertise for people to step in and buy the loans.

Paying the delinquent taxes essentially constitutes making a loan to the property owner, and it's a loan with a very good interest rate. Property owners who pay off the loan do so at an interest rate 9 points higher than the prime interest rate as of Sept. 1.

After the November sale, the lenders are guaranteed a least one month's worth of interest.

Deputy Treasurer Tammy Green said last year more than 250 property owners failed to pay off their property taxes by November and those taxes went into a tax lien sale.

The tax lien sales are done so the county can collect the money, part of which is then distributed to school districts.

"Basically the county is not out that money. The schools get that money. It's another way to retrieve that money," Green said.

A person who pays last year's tax lien on a property has the opportunity to pay the same property's tax lien in August. If that person does not want to pay off the lien again, it goes back to the tax lien sales.

However, if lenders pay off the tax liens on the same property for three consecutive years, they then get the opportunity to apply for a treasurer's deed to own the property.

Before ownership of the property is transferred, the lender must first make a $300 deposit and then the treasurer's office does a title search and advertises in the paper for three consecutive weeks.

If the property owner does not pay off the lien in 105 days, the deed is transferred over to the lender.

Stagecoach and Steamboat Lake lots are often bought through treasurer's deeds, Green said. But, nine times out of 10, Green said, property owners will find some way to get the money to pay off the lien.

"Steamboat property is pretty valuable, people don't let it go," Green said.

And, most lenders prefer not to apply for the treasurer's deed even after the third year because the interest grows on the tax lien over time. The lenders can hold onto the lien for 15 years and the treasurer's office can hold onto the lien for 30 years. In that case the lender can either file for a treasurer's deed or the lien becomes void.


-- To reach Christine Metz call 871-4229 or

e-mail cmetz@steamboatpilot.com

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