There’s a delicate situation for some of Arlington’s senior citizens, as I was recently told by county Treasurer Carla de la Pava.
Homeowners in a certain age and income range are eligible for property tax deferral or outright relief. But because of forgetfulness, pride or poor record-keeping (exactly by whom is debated), their heirs, real estate agents, settlement officers and new buyers are sometimes unaware – after the senior dies and the home changes hands – that deferred taxes were due.
The result is a big mess of “who pays?” recriminations, which is one reason mortgage companies frown on a tax deferral program designed to help seniors age in place.
Word of several botched cases in Arlington reached me from professionals in the title and settlement business — though all declined to be identified by name. They are quite critical of the county’s practices in administering its Real Estate Tax Relief Program — which is being expanded for the 2019 budget submission.
“How could we collect the unpaid taxes if the county never recorded the lien or notice in the property record that the property was part of this program?” asked one executive. Years after a settlement, the county has been known to dun heirs or new owners for back taxes as high as $30,000. (Unexpected costs are usually borne by an insurance underwriter, but are eventually passed on to individuals.)
Most title companies “go the extra step” to verify whether deferred taxes are owed before going to settlement with the next buyer of the deceased’s home, said another title company owner. Best practices mean having the examiner who actually checks the records (online or, for older sales, in the county offices) produce a written report on the tax obligations before the sale, this title specialist explained, acknowledging that many recycle “back work” of past changes of ownership.
Getting a surprise message from the county announcing ancient back taxes is upsetting, of course. But this title business owner has succeeded in providing documentation proving the county wrong. Some in the industry believe the revenue-starved government is like a “predatory towing” operation when it combs past records looking for delinquent taxes. “It’s not easy for folks to go through the process of getting taxes deferred,” this company owner noted.
The treasurer’s office is working to make it easier, de la Pava said as she gave me a website demonstration. “Deferred taxes are hard to manage for everyone,” especially since they’re not due until a calendar year after the homeowner’s death, she said. In 2014, her office put all property tax records in the Real Property Code online. In a review, clerks found 127 properties over the past 20 years for which the title company neglected to pay the deferred taxes due at closing, she said. (Only 17 remain unresolved.)
Now the tax status entries for all Arlingtonians in the program carry a bright red notice reading “deferred taxes exist!” with the precise amounts a click away.
Title companies are ultimately responsible, de la Pava said, guessing that some may be used to different rules in other jurisdictions. Though participants get a letter from the Human Services Department explaining their obligation, the Treasurer’s office, beginning in January, will send its own annual letter as a reminder. Said de la Pava, “We don’t like to see our taxpayers caught up in this.”
I’m pleased the county board just named the government’s main building for the late Ellen Bozman, who served six terms (1974-97) on that board.
I knew her back in fifth grade, when she helped chaperone our special James Madison Elementary School field trip to the White House to meet President Lyndon Johnson.
Bozman later recalled that we kids, while waiting for our hosts in the Cabinet room, had messed up the laid-out pens and notepads. As she straightened up the table, LBJ entered angry at an aide, but on seeing her, instantly made nice for us all.