County Officials ask Alabama top court to reconsider who gets extra money from tax auctions

Calhoun County officers are asking the Alabama Supreme Court docket to rethink a latest ruling that stops county governments from preserving extra cash after they promote personal property to pay overdue taxes.

Final month Alabama’s prime court docket dominated in favor of two enterprise homeowners who misplaced 1000’s of {dollars} in extra proceeds when the county offered their actual property after they didn’t pay their taxes.

“This state has lengthy acknowledged a property proprietor’s proper to the surplus funds generated from a tax sale of his or her property,” the court docket acknowledged in its June ruling in clarification of its determination.

Attorneys for the defendants and plaintiffs within the case didn’t instantly reply to a request for remark from AL.com on Monday.

On Friday, Calhoun County filed an software for rehearing, arguing that one of many plaintiffs within the case, actual property investor James Douglas, didn’t have standing. The county argued that Douglas filed his lawsuit earlier than the Calhoun County Fee made a closing determination about whether or not to pay him the surplus funds from the tax sale of his property.

“The likelihood that Douglas didn’t have standing to file his criticism was raised however not well-developed within the preliminary briefing,” attorneys for county acknowledged of their transient to the state’s excessive court docket.

In its June ruling, the Alabama Supreme Court docket decided that Douglas’ declare had been filed in a well timed method and that it was pointless for the court docket to determine if Douglas has standing due to his vested proper as a property proprietor.

James Douglas, an actual property investor and the principal agent for Strategic Municipal Funding, LLC, didn’t pay 2008 taxes on two properties in Calhoun County. One offered for a surplus of $16,939.96 and the opposite for an extra of $9,185.35.

In 2013, Douglas tried to say the surplus funds from the sale of his property, however the county denied his request stating he didn’t qualify because the proprietor on account of title points with the unique switch of the property to him. In 2016 he filed swimsuit to get well the surplus funds from the sale.

In 2014 and 2017, the state legislature amended state legislation to require Alabama property homeowners to redeem property inside three years of a tax sale to be entitled to extra funds. In its June ruling, the state’s excessive court docket asserted that property rights are vested rights and that the property homeowners in Shelby and Calhoun counties had been entitled to the surplus funds from the gross sales.

Though the plaintiffs within the case had been each enterprise homeowners, Will Hereford, their legal professional, instructed AL.com in June that the seizure of extra property funds from tax gross sales usually harms the aged and folks residing in poverty.

“All people desires to pay their taxes if they will. For properties offered it’s going to influence the poorest, typically, of property homeowners,” he stated final month, including that the court docket’s ruling may very well be helpful for future litigation on behalf of Alabamians whose properties have been offered for unpaid taxes.

Of their request for a rehearing, attorneys for the county noticed issues forward as a result of, they argued, Douglas sued earlier than his declare was formally denied.

“This case poses a really actual risk of opening the floodgates of anticipatory litigation, a lot to the detriment of our already-strained dockets and the general public (treasury).”