Topic:
SEWER SYSTEMS; PROPERTY TAX; LIENS; FORECLOSURE; WATER POLLUTION;
Location:
FORECLOSURE; LIENS;

OLR Research Report


January 17, 2008

 

2008-R-0052

WATER POLLUTION CONTROL AUTHORITY FORECLOSURES

By: Kevin E. McCarthy, Principal Analyst

You asked for a description on the power of water pollution control authorities (WPCAs) to impose liens and foreclose on them.

SUMMARY

Sewer connection charges and rates due to WPCAs and other municipal sewerage systems that are not paid within 30 days of their due date become liens on the real estate against which they were charged from the date they became delinquent. The sewer liens can be continued, recorded, foreclosed upon, and released in the same way as property tax liens. These provisions were adopted in 1937.

As with municipalities, if the lien is not discharged, a WPCA can foreclose on it. If the property's fair market value is more than $100,000 or more than the value of the lien plus interest, charges and fees, the foreclosure goes through the courts. If the property is worth less, the WPCA can use a summary foreclosure process. Under both procedures, a property owner can redeem the property by paying the back sewer charges and rates, interest, other charges and fees.

SEWER LIENS

Under CGS 7-258, sewer connection charges and rates due to WPCAs and other municipal sewerage systems that are not paid within 30 days of their due date become liens on the real estate against which they were charged from the date they became delinquent. The lien takes propriety over all other liens, except for property taxes. The sewer liens can be continued, recorded, foreclosed upon, and discharged in the same way as municipal property tax liens.

As described in OLR report 2004-R-0900 (attached), CGS 12-171 et seq. prescribes the procedures municipalities must follow in continuing, recording, and releasing liens. In addition, under CGS 12-177, municipalities with a population of 100,000 or more (Bridgeport, Hartford, New Haven, Stamford, and Waterbury) can adopt ordinances specifying how certificates continuing liens can be included in the land record.

The owner can discharge the lien by paying the back charges and rates, interest, fees, and other charges. The lien becomes invalid after 15 years unless the municipality starts a suit to foreclose it.

FORECLOSURE

As noted above, the procedure for foreclosing a lien for delinquent sewer charges and rates is the same as for property tax foreclosure. Under CGS 12-181 et seq., if the lien is not discharged, the municipality bring suit to foreclose it The court can limit the time in which the property owner can redeem the property (i.e., recover the property by paying off the back sewer charges and rates, interest, fees, and other charges), order the sale of the real estate, and make other orders that it judges to be equitable.

If (1) the property has a fair market value of up to $100,000 in the tax collector's judgment and (2) the amount of the lien is greater than the fair market value, the collector can bring an action for summary foreclosure of the lien. The tax collector can, up to twice each year, file a petition with the Superior Court, which can list multiple properties that meet these criteria. The petition must describe each of the properties with tax liens; provide the name and address of their owners; specify the amount of back sewer charges and rates, interest, fees, and other charges owed for each property; identify each person with an interest in or encumbrance on each property, and the nature and amount of each interest or encumbrance as described in the land records. The petition must also note the last day the property can be redeemed, which must be the last day of the fourth month following the month that the petition is filed.

Within two weeks after the petition is filed, the court must appoint two disinterested appraisers. They must appraise the property's fair market value within 30 days of their appointment. If the appraisers' report shows that a property is worth more than (1) $100,000 or (2) the amount due on the tax liens plus any other encumbrances, the town clerk must withdraw such properties from the foreclosure proceeding.

When the list has been edited, the clerk must notify the tax collector of this fact and the collector must publish a notice in a local newspaper of the fact that a foreclosure proceeding is pending. The collector must also post this notice at town hall and send a copy of the notice to the property owner by registered or certified mail.

The property owner or anyone else who has an interest in or encumbrance on the property (e.g., a bank holding a mortgage on the property) can file a notice with the court clerk raising a bona fide defense to the foreclosure. This notice must be filed no later than three months before the end of the redemption period. If the court is satisfied that there is a bona fide defense to the foreclosure, it must direct the town clerk to withdraw the property from the proceeding.

Any person who has a title to or an interest in the property can redeem it by paying off the lien amount, plus any interest, fees, or charges that accrued after the petition was filed. If no one redeems the property, the court must make a final judgment giving the municipality possession of and the title to the property. Any person who had any right, title, or interest in the property is thereafter barred from claiming it.

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