Tax Lien Truths

By Mark Czelusta

Teller County Treasurer & Public Trustee

Stunning natural scenery.  Quintessential mountain towns overflowing with personality.  A popular state park.  A national monument.  Limitless outdoor activities.  Vegas-style gaming.  Safety and security.  Genuine and genuinely happy locals who take care of each other.  Close proximity to noteworthy metropolitan areas.  What is there not to love about our home in Teller County?!

Fact is that we are the envy of Colorado.  We know that more and more people want a piece of Teller County.  All we have to do is watch the local real estate market to see how highly esteemed we are.

The rest of the story is that some people will do whatever it takes to get a piece of Teller County…for themselves or for resale…even if it means taking advantage of folks in a tough spot.  I respond to 1 to 5 Colorado Open Records Act (CORA) requests a week.  Nearly all of them ask for the same information:  they want a list of properties with existing tax liens on them.

Some shady actors use this information to pressure owners into selling their property for pennies on the dollar with a promise to get good folks out from under their tax liens.  Often presenting themselves as “Real Estate (or Credit) Specialists,” these people are aggressive.  They are usually from out of state.  They stretch the truth.  They paint a dire picture of your situation.  They will push you to make a quick decision and a quick sale.  I personally believe that such actors are demonstrating predatory behavior and do not have your best interests in mind.

We are recovering from 2020.  I know many of us are still struggling with concerns, financial and otherwise, that are very real and beyond simply, “legitimate.”  As a result, some of us could not make our tax payments and now we have tax liens on our homes and land.  It’s scary.  I wish I could simply announce a “Tax Lien Holiday,” but we also know that such an action would be illegal and detrimental to our communities.  The Treasurer’s Annual Tax Lien Sale is outlined in Colorado Statutes.  Our taxes fund critical services that are important to all of us.

But this doesn’t mean that you cannot be “eyes wide open” about the situation.  While having a tax lien on your property is very serious and something not to be overlooked, the predicament is usually not as dire as many might think, and rarely does it require that you make a quick, high-pressure decision.  So, what can you do, if you find yourself with a tax lien on your property, and are contacted by these “Real Estate Specialists” who want you to sell them your property?  Here are a few suggestions:

  1. Call or visit my office.  Ask for me personally.  We cannot stop these folks from contacting you, but we can give you the “full and complete story” about your situation.  We will be upfront, transparent, non-judgmental, and low-pressure.  We will tell you how much time you have.  We can tell you the interest and penalties that are accruing.  While we will not give you legal advice, or make these problems “go away,” we can outline real options.
  2. Check for credentials and references.  If the person identifies themselves as a “professional” in the real estate industry, insist that they show you their license, their license number, and their list of references.  Then look them up by searching on-line under “National Association of Realtors Background Check.”  The Association offers several options.  If that person refuses to show you their license, or has no references, or has compliance problems in their background, end the conversation immediately.
  3. If you want to sell, consider a traditional sale through a reputable real estate agent/broker.  You might realize that, even after all the fees and processes involved, you can wrap this up quickly and make a few more dollars than what these “quick sale” people are offering.
  4. If you elect to make a sale based upon the offer, insist on using a title company.  Do not close the sale via a Quit Claim Deed.

Finally, I ask that you arm yourselves with the myths and realities of tax lines.  Here are a few things these people might say…and here is the whole story:

  1. “You are accumulating interest and penalties at a very high rate, and there is nothing the County Treasurer can do to stop it.”  Actually, this is true.  Interest on delinquent payments initially accrues at 1 percent per month…12 percent per year.  The interest rate after the tax lien sale is set by the State of Colorado, and is usually 9 to 14 percent, depending upon the fed rate.  These are investment-grade rates of return, and the home (or land) owner is paying them.  Once the lien is sold at auction, the third-party investor is promised a rate of return that I cannot waive or set aside.
  2. “You are on the verge of losing your property anyhow, so you might as well make a small bit of money by selling.”  This is the most common high-pressure tactic these people use.  I ask that you call my office and get the whole story from us, specific to your property.
  3. “You cannot sell a property with a lien on it by traditional methods.”  This is false.  You can absolutely sell a property with a lien on it, but the lien should be satisfied as part of the sale.  This is where the title company comes in.
  4. “We don’t need a title company to do this.”  While technically true, this is very dangerous.   Title companies work out the details and resolutions of all liens (not just tax liens) and ensure a proper sale and recording of your actions.  You will not get this support through a simple Quit Claim Deed, and some of these liens may follow you even after you sold the property.
  5. “You are ruining your credit rating the longer you delay.”  This is false.  My office does not report tax liens to the credit bureaus.

Property owners in Teller County know what is best for themselves.  So, I am not going to tell you that you cannot work with these folks; that is your decision alone.  What they are doing is not illegal.  Many are honest businesspeople, I am sure.  However, I personally observed that most rarely tell you the whole story.  Consider that none of these people encouraged potential sellers to call me to discuss their situations in the over 2 years I have been in office.

I personally believe that such conduct reveals dubious intent, and this rapidly growing practice distresses me.  Make your decision based upon all the facts.  Do not believe that you have to make rush decisions.  Use all your resources…not the least of which is my office and other reputable professionals in our local area.  If you are approached by these people, please call us at 719-689-2985 to get the ground truth on what is in our records.  As always, we work for you.