In Warren County, New York, the North Country Gazette
- The state’s highest court has ruled that Warren County officials were not constitutionally required to try and seek out a new address to give a property owner notice before seizing his property in the Town of Chester for overdue taxes and selling the property at a foreclosure sale in 1999 after he had moved and his forwarding address had expired.
In an unanimous decision, the Court of Appeals ruled that W. James and Andrea Mac Naughton of Short Hills, NJ, had not been deprived of their property without due process of law and that the county had satisfied due process requirements in its effort to notify the property owners that an in rem tax foreclosure proceeding had been been initiated against their property after documents sent to the address listed for them on the tax roll were returned by the postal service as undeliverable.
When an owner of real property moves and does not give a new address to the collector of real property taxes, he or she may fail to receive notices of overdue taxes and related legal proceedings and the property may consequently be lost in foreclosure.
The U.S. Supreme Court and NY Court of Appeals have held that, in such situations, due process requires taxing authorities to take reasonable steps to track down the missing taxpayer being seizing and selling her or her property.
This case raised the question of how much a taxing authority is required to do. The MacNaughtons had argued that, when notice mailed to them at their last known address, in New Jersey, proved undeliverable, the tax collector was required to find some means of making personal service on them, or to address a notice to “occupant” at the former address, or to search New Jersey public records for a new address.
In 1988, the MacNaughtons acquired a vacant lot in the Town of Chester in Warren County. They then lived in South Orange, NJ, and their South Orange address appeared on the deed.
The Town sent them real property tax bills at that address, and the MacNaughtons paid them.
In 1993, the MacNaughtons moved from South Orange to Millburn,NJ. They arranged with the post office to forward their mail, but they did not then inform the Town of Chester taxing authorities of their new address.
The 1994 tax bill was forwarded from South Orange to Millburn, and paid.
The MacNaughtons claim that, after receiving the forwarded bill, they gave their new address to the Town in a handwritten note and in a telephone call, but plaintiffs have no record of either communication, and neither is reflected in the Town’s records.
“To accept undocumented claims of this kind would be to invite abuse”, the court wrote, “and we therefore conclude that plaintiffs’ ‘bare allegation’ is insufficient to defeat summary judgment on the issue of whether they gave notice of their change of address to the Town; we take it as established that they gave no such notice”.
A year after the MacNaughtons moved, their forwarding arrangement with the post office expired. Tax bills for the next three years, mailed to them at the South Orange address, were returned to the Town.
In 1998,Warren County sent a warning letter to the South Orange address that was also returned, and then began a foreclosure proceeding. It served plaintiffs with the petition and notice of petition by certified mail addressed to the South Orange address. The mailing was returned with the notation: “Undeliverable as Addressed – Forwarding Order Expired.”
The MacNaughtons defaulted in the foreclosure proceeding and title to the property passed to the County, which sold it at auction in 1999.
The MacNaughtons did not learn of these events until 2003.
After unsuccessful federal litigation, they began the state action in 2005, asserting that the attempts to give them notice of the foreclosure were constitutionally inadequate, and seeking a declaration that they still owned the property.
Supreme Court granted the County’s motion for summary judgment, and the Appellate Division affirmed. The MacNaughtons then appealed to the Courty of Appeals as of right.
At the time the county began its foreclosure proceeding in 1998, the Real Property Tax Law required that notice of the proceeding be published in at least two newspapers and that it be “mailed, by ordinary first class mail” to the owners of the property. It is not disputed that the County complied with the statutes. The question is whether the State or Federal Constitution required it to do more.
The Court says no. However, it should be noted that the law has been changed and Real Property Tax Law now requires that notice be mailed by certified and first class mail. If these documents are returned, additional steps must be taken by municipal authorities to locate the property owner, including contacting the postal service to determine if other mailing addresses are available and on file.