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Judge rules against city, county official in land sale

5 min read

A Washington County judge ruled officials erred when they rejected the bids of local man and his sister who wanted to buy tax-delinquent properties earlier this year because the city failed to prove its case that they had a history of housing code violations.

Bill Joe Sanders and Rebecca Ellen Sanders were the highest bidders at what’s known as a “repository sale,” a last-ditch attempt to return properties to the tax rolls by exonerating municipal, school district and county taxes. Mayor Brenda Davis said the Sanderses wanted to purchase a home on Idaho Street and a fire-damaged house on Chartiers Street.

City solicitor Jack Cambest said state law is silent on due-process hearings for those kept from purchasing property at repository sales, so Gilman ruled that the law governing judicial sales should also apply.

At a judicial sale, the price of a property is based on costs, recording fees, transfer taxes, but no local property taxes. It is sometimes called a “free-and-clear sale,” although the buyer is responsible for paying any outstanding state and federal taxes or liens.

At repository sale, a buyer is required to pay a minimum bid of $500 plus a $100 non-refundable administrative fee to cover deed transfer taxes. Again, state and federal obligations on the property remain.

The city, however, rejected their bids, claiming the Sanderses had outstanding housing code violations.

Judge Gary Gilman ordered that the Sanderses’ have a right to request a hearing before any bids are refunded and they can try to prove consent of the sale was unreasonably withheld.

Gilman noted that “taxing districts may not unreasonably withhold” consent to sell property assigned to the county repository.

Although state law does not outline a procedure for the city to notify the Sanderses, give them specifics, or place a deadline on correcting deficiencies, Gilman said they are implied in the law, “otherwise the bidder would be deprived of the opportunity to challenge the (city’s) claim.”

Debbie Bardella, Washington County director of the tax revenue department, who was also named as a defendant in the Sanderses’ injunction request, said she has established a policy for notifying potential buyers who had not been approved to purchase property at a repository sale.

Bardella agreed Wednesday that there is no outline in the law on what to do when a person hoping to purchase property in a repository sale is rejected, and said her office must “consider each on a case-by-case basis.

“We’re sort of like the middle person. I get to ask, ‘Does the city’s denial seem reasonable?’ Mister Sanders said, ‘Could I have time to talk to the city and work this out?’ He got, like, a month and a half.”

Billy Joe Sanders asked for time to contact the city about alleged housing code violations. More than 30 days elapsed without again hearing from Sanders, a length of time given to all potential buyers, so the county refunded the money paid for the properties, less a $100 administrative fee.

The Sanderses went to court March 4, eight days before hearing from the city about any alleged housing violation. In court last month, Ronald McIntyre, city code enforcement officer, testified about properties owned by the Sanderses or R.E. Properties and related violations.

The court accepted Billy Joe Sanders’ testimony that the only properties he or his sister owned were a vacant house at 251 Burton Ave. and a vacant lot at 575 W. Chestnut St., and noted that “any alleged violations have been withdrawn by the city or the owner was found not guilty.”

“The only applicable code violations would be failure to post identification numbers on the property and failure to register it as a vacant property,” Gilman wrote. “The code enforcement officer did not testify that this vacant property was creating a health or safety hazard.”

Davis also claimed in court that the city, along with Citywide Development Corp., was going to develop the properties and place them back on the tax rolls.

The judge decided there was a lack of evidence to support this claim.

“It is apparent that (Citywide) is not designed to own real property,” Gilman wrote. “In fact, Citywide did not bid on the properties; they remain in the repository. Further, it was acknowledged that the land bank has not yet been established. The ordinance establishing the bank is merely proposed. Therefore, it would be premature to reserve repository properties for an unborn entity.”

Gilman’s order was dated June 10, but Cambest noted that later last week, Citywide acquired a vacant lot at 77 Highland Ave. and sold it to Lumos Networks of West Virginia Inc., which plans to use it to house electronic communications equipment. Wells Fargo bank has also donated to the city property they have been unable to sell.

Cambest said he plans to discuss with Blane Black, solicitor for the county revenue department, whether they should appeal Gilman’s order.

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