Every owner of real property has to pay property
taxes. There are a few exceptions, of course. For example,
the property of governmental units, schools, charities, churches,
and certain other non-profit organizations is exempt from
taxation so long as it is not used for profit-making purposes.
Some states also have limited exemptions for indigent widows,
orphans, veterans and the like. But, in general, if you own
real property you can expect to pay an annual or semi-annual
Lack of Notice
What happens if you do not receive your tax bill for one or
more years, and the back taxes begin to pile up? After a few
years the bill can become huge when interest and penalties
are added in.
This unfortunate state of affairs seems to occur with some
regularity. Usually, the problem occurs because the tax bill
is sent to the wrong address. The property owner may move
and forget to tell the assessor, which often happens. The
tax bill may be sent to a lender who pays the taxes out of
an impound account. After the loan is paid off, the lender
may fail to tell the assessor, and the tax bill will continue
to be sent to the lender, who just ignores it. Sometimes the
treasurer just makes a mistake in transcribing his mailing
list. Whatever the cause, you can be blissfully unaware of
the taxes piling up until it is too late. Believe it or not,
it is actually possible to lose your property to taxes without
ever having received actual notice.
Is This Constitutional?
You might ask how a property owner can be stuck with interest
and penalties or lose his property if he never received a
tax bill. That's a good question. The Fifth Amendment of the
Constitution provides that property may not be taken without
"due process of law." The first requirement of due
process is notice. One can hardly be said to have received
due process if he is never notified of a pending procedure
to take his property. On the other hand, the government must
have dependable tax revenues to operate, and one should not
be able to avoid taxes by failing to tell the county treasurer
where he lives.
To resolve this problem the courts have developed a flexible
standard for determining when adequate notice has been given.
In criminal cases, where a person's life or liberty may be
in jeopardy, actual notice is nearly always required, usually
by arresting the person and bringing him before a judge. In
a civil suit, the requirements for adequate notice are also
strict, usually requiring personal service, but in certain
circumstances "constructive notice" may be allowed.
This might consist of publication in a newspaper if the party
cannot be found and served. However, in the case of a tax
levy, the requirements are generally much more lax. As long
as the taxing authority provides for some kind of reasonable
notice and an opportunity to be heard, it is likely to be
Most states have statutes providing for something less than
actual notice when it comes to taxes. Typically, the statutes
will provide for publication in a newspaper for several weeks,
together with mailed notice to the taxpayer's last known address.
It is up to the taxpayer to keep the treasurer informed of
his current address and to make sure his taxes are paid when
In many states, the statutes provide for notice by publication.
Of course, the county treasurer sends you a tax bill, but
it is not a legal requirement.
Mortgage lenders often require the tax bill to be sent to
them so that they can insure that the taxes are paid. Unfortunately,
many lenders fall into the habit of ignoring the tax bills
after the loan as been paid off, not bothering to notify either
the county treasurer or the borrower. This allows the tax
bills to pile up if the property owner fails to realize he
has not been receiving his tax bills. When the property owner
finally learns of the mistake, the amount owed can be huge.
If you are a property owner, make sure you know the status
of the taxes against your property, and check up on it every
year or so, even if your lender is paying your taxes through
an impound account. This is especially true if you own multiple
properties, because it is easy for one property to slip by
unnoticed. Do not assume that everything is all right just
because you have not received a notice that taxes are past
due. If you change your address, be sure to notify the assessor.
Remember, it is the property owner's responsibility to make
sure his taxes are paid.
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