Introduction to Noticing and Due Process Lessons with Scott Walterbach of Bessine Walterbach
Scott Walterbach of Bessine Walterbach is a partner in that law firm with more than 16 years of experience in Missouri tax sales law. He spoke with Tax Sales Resources CEO Brian Seidensticker during a podcast focused on the ins and outs of notifications – particularly regarding the statutes in Missouri.
Notifications are a Vital Part of the Tax Sale Process
Many investors new to tax sales in Missouri may need clarification on how they work since every state is different, and rules and procedures can vary from one county to the next. However, the courts expect investors to make a concerted effort to give notice to any party with an ownership interest in the property. That critical step in the process is governed by state law and follows federal statutes. With fewer investments, you may have the time and resources to pay closer attention and do more due diligence related to notifications. However, if you have lots of properties in your portfolio, that can be a challenge. So it is something to consider and sufficiently prepare for to avoid problems carefully.
You’re Dealing with Constitutional Law, so Pay Close Attention
Constitutional notification law doesn’t just cover what you knew as an investor when you did your notifications. It also looks at what knowledge you may have learned after the notification process and whether that recent information could have allowed you to do more. In other words, you need to follow up on any leads you may later discover that can help you locate interested parties and ensure that they are properly notified. The process can be complicated and require a great deal of due diligence. That’s why it can be a good and more efficient idea to engage a local attorney's services to help with notifications.
A Hard-Learned Lesson in Noticing Homeowners
One example Walterbach cited involved an absentee owner who often traveled overseas. Although he once lived on the property, it was later used as a rental home, and he no longer received mail from that address. The county needed a record of the updated mailing address. The investor sent notifications to the property address and subsequently went to court to foreclose and take possession. However, the mortgage holder and the absentee owner filed claims based on the defense that the notifications were insufficient. The owner argued that he could have had the investor look more arduous to find his address. The court agreed with the owner and set aside the tax sale. As Walterbach explains and this case history confirms, notifications are the most significant thing investors underestimate when doing business in Missouri.
How the Courts Typically View These Cases–Effort is Key
Courts almost always side with owners vs. investors since they don’t like to force owners to forfeit their property. From the county’s perspective, tax sales intend never to take people’s homes away from them. Instead, it is only a tool of last resort, used to collect much-needed tax revenue to fund vital community services. There are times when you may not succeed at acquiring ownership. You may have to settle to repay your original investment and earn interest on the lien, which is paid throughout the redemption period and all the way through to the date of final judgment.
Don’t Forget These Tips When Noticing Owners of Tax Sale Properties
In some instances, investors have published the notifications, used process servers, and even attempted to reach property owners through social media platforms like Facebook. They take such creative approaches because courts want investors to demonstrate evidence of a genuine desire to give interested parties actual notice. The more proof of that effort you can provide, the more likely the court will side with you and render a favorable judgment. To learn more about improving the likelihood of success through a more effective notification process, listen to the full, in-depth podcast interview between Scott Walterbach and Brian Seidensticker. You can also learn more about the Missouri Tax Sale Process with Scott Walterbach here.
