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Web posted
The governmental unit thus has the power to foreclose out the interests of the property owner-taxpayer and anyone having a lien upon or interest in the property that is junior and subordinate to the real estate tax lien.
The issue comes up in a number of contexts. Real estate taxes are typically prorated as of the date of a real estate sale closing, and if a parcel is in the midst of a municipal tax foreclosure it is of course necessary to get the taxes in arrears (together with penalties, interest and costs) paid current at closing.
More commonly, the issue comes up when a client holding a deed of trust or a judgment lien on a parcel decides to conduct a foreclosure or execution sale based upon a default in a promissory note or an unpaid judgment. In that setting, it is necessary to determine whether the taxes are in arrears, and if they are in default, then it is necessary to determine the stage to which the real estate tax foreclosure procedure has progressed.
By way of review, real estate taxes are due and payable annually at different times and in different installments in various communities in Alaska. In Anchorage, real estate taxes for the current year are due and payable in two equal installments on June 15 and August 15 of the year. If taxes are not timely paid, the municipality or governmental unit begins the foreclosure process authorized by the Alaska Statutes and the pertinent municipal or governmental code.
The first step involves the filing of a petition for judgment in the Superior Court and the weekly publication by the governmental unit of a foreclosure list with respect to the previous year's delinquent taxes for a period of four consecutive weeks. The governmental unit is also required within 10 days after the first publication to mail the owner-taxpayer a notice advising of the foreclosure proceeding in which a petition for judgment of foreclosure has been filed.
The taxes in arrears, together with penalties, interest and costs can be paid during the period of publication. Further, any person having an interest in property on the foreclosure list can file an answer or objection in court within 30 days after the date of the last publication.
Assuming there is no valid objection by a taxpayer to the foreclosure list (or if any objections are overruled), the Superior Court will enter a decree of foreclosure directing that the property be transferred to the governmental unit for the lien amount. The delivery of a certified copy of the judgment and decree by the court clerk to the municipal clerk constitutes a transfer to the municipality.
Thus begins a redemption period of one year during which the taxpayer or anyone holding a lien on or interest in the property can redeem the property from foreclosure by paying the amount of tax in arrears and any penalties, interest and costs.
At least 30 days before the expiration of the redemption period, the municipal clerk is required to publish a redemption period expiration notice once a week for four consecutive weeks and to send a copy of the notice via certified mail to each record owner, and to lienholders of property having a value in excess of $10,000. The redemption right expires 30 days after the date of the first notice publication.
Ultimately, if the taxes, penalties, interest and costs are not brought current before expiration of the redemption period, the municipality or governmental unit has the right to acquire the property via a clerk's deed. In order to get a clerk's deed, the municipality or governmental unit must generally file a petition with the Superior Court requesting the issuance of the clerk's deed by the clerk of the Superior Court.
Even if a clerk's deed has been issued and recorded, it is sometimes possible for a taxpayer to pay all of the foreclosed taxes, plus penalties, interest and costs and to reacquire title to the property.
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