Published 8 April 2019
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 30 at the commission chambers of the DAC Government Center, 845 N. Motel Blvd. in Las Cruces. Fifty-seven properties are currently 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 simply type the words “state of new mexico delinquent property auction” in your browser. You’ll find the link to the upcoming auctions right 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 a single-family home at 3240 Jupiter Road in the Four Hills area of Las Cruces (assessed at $142,567; minimum bid $6,700) and a two-bedroom, two-bath condominium at 3650 Morningstar Drive, Unit 1501 in the Casitas at Morningstar (assessed at $123,913; minimum bid $6,500); to a 1,634-square-foot three-bedroom, two-bath home at 989 Rio Bravo way in the Elks area (assessed at $145,767; minimum bid $9,000).
Other examples include a three-bedroom, two-bath mobile home on a 0.25 acre residential lot at 434 Bamert Road in the Fairacres area of Las Cruces (assessed at $57,034; minimum bid $1,300); and a 1.17-acre residential lot at 103 Tall Tree Court east of Las Cruces (assessed at $26,900; minimum bid $1,000). Additional properties to be auctioned are located in Anthony, La Mesa, Chaparral, La Union, Hatch, Tortugas, Berino, Organ, Mesquite, Sunland Park, Doña Ana and Chamberino.
Delinquent tax auctions for Santa Fe, Los Alamos, Torrance, Hildago, Grant and Luna have also been scheduled to be conducted during April.
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 from the bidder who acquired it at the sale.
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 sales price.
See you at closing.
Gary Sandler is a full-time Realtor and president of Gary Sandler Inc., Realtors in Las Cruces. He loves to answer questions and can be reached at 575-642-2292 or Gary@GarySandler.com.