BEST ANSWER
Yes, they can. You have three options here:
(1) If your father's estate has gone through Coos County Probate Court, then you can list the property for sale as the rightful heir. However, when you close on the sale, the back taxes and any other liens will be taken from your proceeds. A Realtor can put an analysis together for you to see if this is worthwhile based on the value of the property. One of my colleagues from GRI (the Graduate Realtor Institute) is active in that area.
(2) There is a state law governing town's taking of property for unpaid back taxes, but some towns are more lax than others in acting on this. When a town does take a property for back taxes, then the rightful owner has three years to claim the property by paying off the back taxes and interest. Since interest compounds at 12% per year, it is not a good idea to wait unless you are not in a position to pay the town now. Not sure, but the town may have the right to spend money on protecting the property and including that in the charges. If there are other liens outstanding when you reclaim the property, these will still be in force. However, lienholders need to take certain actions periodically to sustain their claims. An attorney can advise you on these last two points specifically, but the timeline for lienholder action is every six years, I believe.
(3) After three year period has passed, the town may continue to hold the property or may put it up for auction. At that point, the town will accept whatever is offered by the highest bidder as settlement in full for back taxes and interest and any other liens are wiped out. The town has a lot of latitude about what it has to do, when, so do not assume that this is a free pass.
Chuck Braxton, REALTOR
Fri Dec 19 2008, 09:59