Tax sale funds tangled in heirs’ property, other issues, often go to county
Sandra Scott, a widow living in Rantowles, could sure use some of the $7,273 that Charleston County is holding in her late husband’s name, but it seems there’s no practical way for her to get hold of it.
“For the money to just sit there — I could use it even for food,” said Scott, 67, who gets by on about $1,000 a month from Social Security. “That’s a lot of money to me.”
But at the end of this year the county will most likely get to keep that money, along with nearly $500,000 the county is holding for other people and businesses. It’s something that happens in every county, every year, across South Carolina.
The cash comes from the excess proceeds of delinquent tax sales.
In Scott’s case, the county auctioned off an acre of land owned by her husband and his extended family, out past Rantowles Creek, to collect $281.53 in unpaid property tax and penalties.
How it works
The way such sales work is a tax-delinquent property owner has a year to reclaim their property after it’s sold at auction, by getting the taxes up to date and making substantial interest payments to the auction bidder.
How it works
Most bidders participate in the auctions in order to get the interest payments, currently up to 12 percent of the bid amount, and most properties do get reclaimed.
But if the property isn’t reclaimed, the auction bidder gets to keep it. The county only gets the amount of money owed for current and past-due taxes, and the rest of the auction bid — in Scott’s case the $7,273 — is supposed to go back to the previous property owners or their heirs.
What happens next
The problem typically is, some of those property owners have died, others have moved, businesses have closed, and in a case like Scott’s involving heirs’ property, there could be a dozen or more names on the deed and little way to determine who’s owed what — if the named owners can even be found.
What happens next
“I tried to collect it, but the attorney told me it would cost more money than I could have gotten,” said Scott. “I have to get all the heirs to sign off on it, and that’s pretty much an impossibility, because there are 11 names on the deed, but only about two of them are alive.”
That’s a common complication with heirs’ property, which is property that’s been handed down through generations of inheritance, usually without a will. Often in South Carolina, heir’s property involves land owned by black families following the Civil War.
An heirs’ property could have many owners who may not even know one another — an arrangement that makes everything from tax payments to mortgage loans very difficult, if not impossible.
“When it comes to heirs’ property, I will tell you it’s difficult,” said George Boniface, director of revenue collections for Charleston County. “There’s got to be some sort of legal untanglement before we can give the money to somebody.
“We, by law, are supposed to give (the money) only to the defaulting taxpayer on the deed, on the record as of the redemption date,” he said. “If it’s heirs, and somebody passes, then it’s a probate issue.”
Josh Walden, staff attorney for the Center for Heirs’ Property Preservation, said there’s no easy answer.
“The process of clearing title to an heirs property, when you are talking about multiple generations, you’re looking at legal fees that can range from $20,000 to $30,000,” he said. “Very often, it’s not worth the amount of money it would cost to get a judge to determine which heir is entitled to what portion of the money.”
The result, which tends to fall disproportionately on black residents with lower incomes, takes many forms and they are all bad. First, there could be people on a property’s deed who don’t even know the property exists, but someone has to pay the taxes.
“Often the people paying the taxes don’t even live on the land, but were paying the taxes because it’s family land,” Walden said.
That’s what Scott’s husband, Ben, had been doing. She said he always paid the taxes on that acre of land, sometimes by selling timber, but without a clear title the land couldn’t be sold, or borrowed against.
“I let that one (property) go because the heirs, the family members, didn’t want to do anything to help with the taxes,” Scott said.
Next, the heirs’ land goes to tax sale, and is sold at a bargain price. The cash in excess of the taxes owed is supposed to go back to the previous owner, but the ownership can be impossible to sort out.
Benefitting from this system are the buyers, who pick up cheap land, and eventually the counties, which end up keeping the excess cash.
“We try like anything to get in touch with people,” Boniface said.
County paralegals research titles, the county sends letters to the addresses they can find, and the county posts the names of all the people and businesses who are owed money on the county website.
Hard to find
The Post and Courier tried to track down dozens of the people on those county lists, using journalistic resources and commercial people-finding services, calling relatives and in-laws in some cases, and was only able to track down two people, including Scott.
Hard to find
In most cases, the prior property owners had moved or died, numbers had been disconnected, trails had grown cold, businesses had been long-closed. In some cases the people may have wanted to vanish.
“His ex-wife would like to know where he is, too,” the relative of one man owed money by the county told The Post and Courier. “He owes her child support.”
Another man, informed by a reporter weeks ago that Charleston County is holding more than $110,000 in his son’s name, never called back and has been unreachable since.
Georgia resident Theodora Backman was one of the lucky ones.
Related to the family that owns Backman’s Seafood on James Island, Theodora Backman went to court and got the 2007 sale of her family land on Sol Legare Road reversed just a few months ago, as the county was about to keep $49,892 from the sale.
“They sold my property without me even knowing,” she said. “I fought it, and I won.”
But such outcomes are the exception.
As just one of many heirs, Sandra Scott can’t stake a legal claim to the $7,273 in her late husband’s name, and the outcome will likely be that none of the heirs get any of the money, and the county gets it all.
“I sure could use it, I’ll tell you,” Scott said.Reach David Slade at 937-5552