OLR Bill Analysis
AN ACT CONCERNING THE ASSIGNMENT OF LIENS FILED BY A MUNICIPAL TAX COLLECTOR AND A STUDY OF THE MUNICIPAL TAX LIEN FORECLOSURE PROCESS BY THE CONNECTICUT LAW REVISION COMMISSION.
Existing law requires the party to whom a municipality has assigned a real property tax lien, or any subsequent assignee, to provide written notice to any mortgagee within 30 days after the assignment. The notice must include (1) the name and address of the party to whom the tax lien was assigned; (2) the amount of unpaid taxes, interest, and fees as of the date of the assignment; and (3) information to identify the property. The bill requires assignees to provide the same information to the delinquent taxpayer within 30 days after the assignment.
The bill additionally requires the notice to delinquent taxpayers to include (1) the terms of any proposed payment plan offered by the assignee that delineates the amount of unpaid taxes, interest owed, and applicable fees and (2) information on the assignee's right to recover costs and reasonable attorney's fees from the taxpayer when initiating a foreclosure action or other legal proceeding to collect the debt.
The bill also requires the Connecticut Law Revision Commission to study the adequacy of state processes governing municipalities' tax lien foreclosures, including:
1. the feasibility of establishing an expedited process for tax foreclosures on small parcels for which taxes have not been paid in at least 10 years,
2. constraints that municipalities encounter when foreclosing such tax liens, and
3. due process issues affecting municipalities and interested parties when foreclosing such tax liens. (It is unclear if all three study requirements apply only to foreclosures on small parcels.)
By January 1, 2017, the commission must submit its recommendations, including any proposed statutory changes, to the Planning and Development and Judiciary committees and the chief court administrator.
EFFECTIVE DATE: October 1, 2016, except the provision regarding the Connecticut Law Revision Commission takes effect upon passage.
Assignment of Municipal Tax Liens
CGS § 12-195h permits municipalities to assign their property tax liens to third parties. The municipality's legislative body must exercise this authority by resolution and may do so for any and all liens. Payment for the assignment is a matter of negotiation between the municipality and the assignee. The assignee has the same powers and rights as the municipality and its tax collector regarding the lien's priority interest and collection fees. The assignee may also enforce the lien in the same manner as any private lienholder.
Joint Favorable Substitute