City Desk

Judge Halts City Property Tax Auction

If you were hoping to show up today at the Office of Tax and Revenue and bid on a piece of tax-delinquent property, think again: A Superior Court judge has halted the yearly tax sale.

Judge Brook Hedge granted a preliminary injunction yesterday halting the sale, scheduled for today through Friday, as part of a lawsuit filed against the city by Aeon Financial LLC, billed as "one of the nation’s leading purchasers and servicers of delinquent municipal property tax liens."

LL has yet been unable to obtain a copy of Aeon's complaint, but Hedge's injunction order indicates some sort of dispute over whether properties with outstanding tax bills of less than $1,200 would actually been put up for sale tomorrow or not. Aeon seems to want them sold; the District does not. Hedge noted that the District provided no explanation of why this is so.

UPDATE, 3:30 P.M.: So here's the deal: Aeon's business is buying up a lot of properties at tax sales—last year, it spent $4.6 million buying 445 District properties, which is 35 percent of all the properties sold. This year, the company alleges in its complaint, the city has decided not to sell properties that owe less that $1,200 in taxes. That's a problem, Aeon says, because the city is required by law to sell all properties that haven't paid their taxes—and because the city isn't following the law, Aeon argues, any delinquent property owner who did have his property sold can ask a court to declare the entire auction illegitimate. That would be bad for Aeon.

UPDATE, 5:15 P.M.:David Umansky, a spokesperson for OTR, says that the office decided not to sell the sub-$1,200 properties to improve the efficiency of the auction. Last year, he points out, the auction did not include properties owing less than $1,000. (See Michael Neibauer's Examiner story yesterday for more.) "We think everyone agrees that the city should not be in the business of seizing properties for just a few hundred dollars," Umansky says. The city, he says, plans to appeal Hedge's ruling.

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