February 23, 2009

"I somehow overlooked paying my taxes and a tax lien was sold on my property. I didn’t receive any notice in the mail of the impending sale of the property. Is the tax lien valid and do I have to pay the penalties and fees that have been tacked on?"

We have previously discussed the Arizona law that makes clear that an actual tax bill is not required to be sent to the property owner. As our Supreme Court wrote in 1941: “The payment of taxes is absolutely essential to the maintenance of government, and it is and always has been recognized that it is the duty of every citizen to pay his fair share of such taxes....”

When the property tax is unpaid, several other statutes require the Treasurer to send notices of delinquency to the last known address of the person or firm that owes the taxes, as well as publish a notice of the impending tax lien sale. The mailed notices are required to be sent on or before the first of September, and then again before the end of the year.
The Supreme Court, continuing in the case quoted from above, where a foreclosed party argued that the lack of proof of mailed notice invalidated the later tax sale, wrote: “... the notice contemplated by the legislature as giving jurisdiction to proceed with the tax sale, is the published notice ... and not the notice by letter to the owner, for the statute expressly provides that the fact that a mistake is made in regard to the name of the real owner either in the assessment or the sale is immaterial so long as the notice specifically identifies the property and the amount of taxes. If, as frequently happens, the property is assessed to the wrong party or an unknown owner, it would be impossible to give any mailed notice to the real owner, but that does not affect the jurisdiction to make the sale. The reason for this, of course, is that every owner of property knows that taxes must be paid thereon, and the duty is imposed upon him of watching the various tax proceedings to protect his interests. If he is given a reasonable time and place to do this, the mere fact that he does not actually have notice thereof does not invalidate tax proceedings.”

What this means is that generally all property owners are expected to know that they have tax obligations associated with their property, and the treasurer’s foul-ups have to be pretty bad before a court will invalidate a tax sale.

The kind of notice discussed here is to be distinguished from due process notice that is required to be given after suit is filed to foreclose a lien. In the latter case, state and federal constitutional protections guarantee a higher standard of effort to make sure the defaulting party is informed of the impending loss of property rights.

ARS § 42- 18051
ARS §§ 42-18103 , 18108
Consolidated Motors v Skousen, 56 Ariz. 481, 109 P.2d 41 (1941)