Delinquent tax sales pose a particular threat to heirs’ property owners, who may learn at the worst possible time that their local government doesn’t recognize their claim to the land.
Not only do families stand to lose their land at auction, but counties routinely pocket the extra cash when heirs’ properties sell for more than the tax amount owed. In at least one county, they can’t even try to get their land back without a clear title to the property.
That’s what happened to Summerville resident Wendy Reed, who jointly owned property on West Richardson Avenue with dozens of members of her extended family. Dorchester County auctioned off the family’s land in 2012 to collect on a delinquent tax bill for about $200.
Owners of properties sold at tax auctions have a year to pay up and reclaim them. But when Reed came up with the money to satisfy her family’s debt, Dorchester County rebuffed her repeated attempts to reclaim the property because her name wasn’t on the deed.
“I had been paying them (property taxes) for years,” Reed said. “I never imagined.”
According to Dorchester County’s interpretation of state law, there was no living person who could have reclaimed the Reed property. The land had been jointly owned by Reed's family since her grandmother died without a will more than three decades ago. And there wasn’t enough time to legally resolve the complex ownership issues before the land went to the highest bidder.
Had Reed succeeded, the property’s ownership would have reverted to what it was before the tax sale — communally owned heirs’ land.
Instead, the matter has been tied up in the courts for four years.
In a lawsuit, Reed’s attorney, Nancy Bloodgood, alleges that Dorchester County’s policies are unique and have “caused the loss of a significant amount of African-American-owned property in rural Dorchester County,” with hundreds being sold at delinquent tax sales in recent years. The suit contends the county's policy blocking heirs from reclaiming their land “is motivated by discriminatory intent."
Reed has continued to live in a mobile home on the property as the lawsuit runs its course. A second lawsuit, involving Reed’s sister Amy Gregg and an adjoining property, is also ongoing.
Lawyers representing Dorchester County in the two cases declined to discuss the unresolved litigation.
Both properties were purchased by Thomas Limehouse, a former state lawmaker who landed in prison following the Operation Lost Trust bribery scandal at the Statehouse in the 1990s. Limehouse, a one-time lawyer who also owns the stately Woodlands Mansion in Summerville, insists Dorchester County only did what the law requires when it auctioned off the Reed and Gregg properties.
“Tax sales can cure decades of neglect,” he said. “This isn’t just about rights, it’s also about duty.”
If the tax bills had been paid, the properties wouldn’t have gone to tax sale. If the heirs had cleared up the title to the property, establishing who the owners were, they would have been able to reclaim the properties.
“What the county did was proper,” Limehouse said. “They did the right thing. They did what the law required.”
Other counties take a different approach.
Charleston County Delinquent Tax Collector Dan Gregory said he has no problem with a family member reclaiming a property, and he can’t recall one time when an heir wasn't allowed to do so.
When it comes to distributing excess money from delinquent tax sales, however, that’s a different story.
The extra money comes into play when a bidder pays more than the tax amount owed to the county. If a property isn’t reclaimed, the previous owner loses the land but is supposed to get the excess funds.
But if a property’s ownership is unclear, the county can't determine who should get the money. So instead, the money ends up in the county’s coffers. To do anything else would require a change in state law, Gregory said.
“I can’t cut a check just to cut a check,” Gregory said. “If I could just give all that money away to who it belongs to, that would be great.”
In a case The Post and Courier profiled in 2013, an elderly widow in Rantowles allowed an acre of heirs’ property to go to Charleston County’s delinquent tax sale because she was tired of paying the bill on the jointly owned vacant land. The unpaid bill was less than $300.
After the land was sold, the prior owner should have received a check for $7,273, the excess money from the auction. But with 11 names on the deed, nine of whom were deceased, the property's ownership was murky.
So, as in many other cases, Charleston County kept the money.
“For the money to just sit there — I could use it even for food,” said Sandra Scott, 67, after she let the property go to tax sale in 2013. “That’s a lot of money to me.”
Most property owners in similar straits could consider selling their property instead of letting it go to tax sale, or borrowing against it to pay the bills. That’s often not an option for heirs’ property owners because of the same ownership questions that complicate tax sales.
One option that no county appears to have considered: using the excess money from these heirs' property sales to help resolve similar cases before more family land ends up on the auction block.