Selling vacant and abandoned homes at tax sales will soon be easier, thanks to a new state law.
The law changes some aspects of county tax sales, and gives executive branches -- mayors, commissioners and the like -- the power to conduct sales specifically for vacant and abandoned homes.
The law, Senate Enrolled Act 422, takes effect July 1, along with many other approved bills from the 2014 Indiana General Assembly.
South Bend Deputy Mayor Mark Neal said he encourages any effort to reduce the number of vacant and abandoned homes.
"Senate Bill 422 represents an encouraging step forward," Neal said. "Here in South Bend, we have seen property owners who are unresponsive or don't reside locally, creating intractable problems with certain properties. Any legislation that supports the goal of fewer vacant and abandoned homes is welcome."
County Treasurer Mike Kruk, though, isn't sure the sale will help with certain homes in particularly bad condition that continue to reappear on the tax sale cycle -- those just aren't desirable, he said, even if the prices are lower at the abandoned home sale, which the legislation allows.
"My guess is that a lot of these vacant and abandoned homes are already on the tax sale, and I don't know if this is going to help sell them," Kruk said.
Whoever may initiate the sale, whether it be a city or county executive, will also have to certify each home as vacant and abandoned before the sale. Those interested in buying an abandoned property will be able to go through the house, with some restrictions -- a change from the current rules, where it's considered trespassing, Kruk said.
When it comes to the yearly tax sale, the legislation also changes how recording fees are collected. Now, homebuyers through the tax sale will have to pay the fee upfront, though Kruk and his partners in the auditor's office are still working out how best to collect it.
The new law also changes some percentages charged during the tax sale, such as the tax per annum an owner must pay to get the home back from the tax sale buyer. Currently, the owner must pay 10 percent on the opening bid, as well as 10 percent per annum of whatever the buyer paid over the bid.
Under the new law, that changes to 5 percent per annum, to discourage buyers who purchase homes at the tax sale hoping to make money off of people buying their homes back, Kruk said.
Also under the new law, the county will be able to charge a fee to those bidding in the tax sale, with the funds going only toward mitigation of vacant and abandoned housing. The fee can be up to $25 for a person participating in just one sale, up to $100 for someone participating in more than one.
Kruk said he didn't know if it would be worth it to charge such a fee in St. Joseph County's tax sale; last year, 60 people participated in the tax sale. If all 60 were charged the $100 fee, it would amount to $6,000 -- barely enough to demolish one abandoned home, he reasoned.
