Each year, the Doña Ana County treasurer, along with the other 32 county treasurers in the state, are required by law to compile a list of properties on which the property taxes have not been paid. If the property owner hasn’t paid the delinquent taxes within three years of the first missed installment, New Mexico law requires that the state collect the arrearages by auctioning off the property.
The next Doña Ana County delinquent property tax auction will be held at 9 a.m. April 18 at the county government center, 845 N. Motel Blvd., in Las Cruces. Thirty-four properties are on the block. Here’s how the process works:
Step one is to procure from the county clerk’s office or state tax and revenue division a list of the properties to be auctioned. The easiest way to do that is to type the words “state of new mexico delinquent property auction” in your browser. You’ll find the link to the upcoming auctions at the top of the page.
Step two is to diligently research title and court documents to determine if any liens, other than those for property taxes, have been levied against the property. Conducting the research is a critical step because only the property tax lien is extinguished by the sale. Any remaining liens will remain in place and become the responsibility of the new property owner. Best practices dictate that a commitment to issue title insurance be obtained from a title company before bidding on a property.
Step three is to register and obtain a bidder number from the auctioneer.
Property types range from landmarks like the Santa Teresa Country Club, consisting of 147.94 acres (assessed at $355,066; minimum bid $57,000) and 8.9 improved acres (assessed at $960,000; minimum bid $70,000); to a 1,548-square-foot, three-bedroom, two-bath home at 1945 Anderson Drive in Las Cruces (assessed at $97,146; minimum bid $4,200).
Other examples include a 0.71-acre residential lot in the Summit Chase subdivision in Las Cruces (assessed at $110,000; minimum bid $5,000); and a 1-acre residential lot on North Castaneda Road in Hatch (assessed at $10,000; minimum bid $700). Additional properties are in Anthony, La Mesa, Chaparral, La Union, Fort Selden and Tortugas.
Determining the physical condition of the property can be challenging. While bidders may drive by the properties or view them from a public sidewalk, the Tax & Revenue Department cautions that “Prospective buyers shall not trespass onto any listed property, nor contact or disturb the occupants, if any, for the purpose of gathering information about any listed property.”
If you’re a successful bidder, you’ll be required to pay the full amount of your purchase on the spot. No cash payments will be accepted, but the county will accept money orders, certified checks, cashier’s checks, or personal or business checks that are accompanied by a letter of credit that will guarantee payment.
Being a successful bidder at the sale doesn’t necessarily mean that you’ll be the ultimate owner of the property. While federal law gives the IRS 120 days to determine if they want to seize the property to satisfy any liens they may have against the former owner, former owners also have a right of redemption under state law (Section 39-5-19 NMSA 1978). The latter redemption period ranges from a minimum of one month to a maximum of nine months, depending on the terms of the mortgage or a judge’s decision in the case of a judicial foreclosure.
According to Wikipedia, “The right of redemption, in the law of real property, is the right of a debtor whose real property has been foreclosed upon and sold to reclaim that property if they are able to come up with the money to repay the amount of the debt.” A similar right is afforded to property owners who lose their property due to unpaid back taxes. Now for an interesting twist.
People can buy and sell redemption rights. Let’s say that a property owner loses his home to foreclosure. The owner may not have the financial ability to redeem the property, but someone else may. In that case, the former owner could sell his right to redeem to a person who has the ability to redeem it. That person essentially takes the place of the former owner and redeems the property for himself.
In the event a sale is rescinded, only the amount paid at the auction will be refunded. So, don’t put up that fence or remodel that kitchen until you’re sure the redemption periods have passed.
Another important point to remember is that the price paid at the sale is not considered the actual value of the property for property tax purposes. In other words, if you purchase a $1 million property for $10, the property taxes will be calculated using the $1 million market value, not the $10 sale price.
See you at closing.
Gary Sandler is a full-time Realtor and president of Gary Sandler Inc., Realtors in Las Cruces. He can be reached at 575-642-2292 or Gary@GarySandler.com.
