On Thursday, May 30, South Burlington resident Kevin Donahue – representing his daughter, Maria Donahue, who was out of state – went before the South Burlington Board of Abatement seeking a waiver of penalties and interest associated with his daughter’s late property tax payment. A discussion of state statute left board members questioning if the city might change how it handles property tax bill notifications for properties transferred after April 1 and left the fate of Maria’s waiver to be determined.
While filling her income taxes, Maria Donahue was shocked to find she owed South Burlington $681.54 in penalties and interest on her property tax bill. Maria had purchased her home in June 2018 but forgot about paying her property tax bill in the chaos of settling down. She had received neither a property bill in the mail nor subsequent delinquency notice for that bill. Rather, those notices had been mailed to the previous property owner, who did not forward them to her.
In Vermont, grand lists are set each April 1. According to state title 32 V.S.A. 3651, 3691 tax bills associated with a property are sent to the individual(s) who owned the property as of April 1. For individuals who buy property after April 1, this means their tax bill is sent to the previous owner. If the bill is not paid, all subsequent delinquency notices are likewise sent to the previous owner. While attorneys are supposed to inform homebuyers of this, and while homebuyers are responsible to remember to pay their bills, the chaos of a home sale can be enough to make anyone’s head spin. According to Kevin, Maria’s head was doing just that as she purchased her home and endured several hardships in the months that followed.
After going through the whirlwind home buying process Maria lost her job at Keurig and had the challenge of fixing up her new home, which was left in “deplorable condition” after the sale, Kevin said. He added that while he remembers the attorney telling Maria that the property tax bill would be sent to the previous owner (who had held the title on April 1) the information soon slipped her mind.
“I could have been one of those helicopter dads and told my 28-year-old daughter, ‘Did you pay the tax bill?’” Kevin said to the board. “I gotta be honest with you, it didn’t even cross my mind.”
“It’s all done on a wing, a prayer and good faith between the parties that the old owner would have contacted my daughter,”
Kevin continued, adding when he talked to the previous owner, that individual said he had called the city upon receiving the tax bill to inform them he no longer owned the property; he then discarded the bill and subsequent delinquency notices.
After appealing to the city manager’s office and the city council, Maria and her father were directed to the board of abatement. In addition to a waiver for Maria’s penalties and interest, Kevin hoped the case would inspire the city to ensure individuals who buy their home after April 1 receive an alert for their property tax bills.
“You got a $60 million city budget, and we have all found it hard to believe that there isn’t some computer program or patch that goes from the city clerk’s office to [the tax department/ assessor’s] office to update when a property has transferred,” Kevin said.
Last year, the city collected over $171,000 in delinquent tax payments, according to Kevin. While a breakdown of why those payments were late was not available, he wondered how many were the result of tax bills being sent to the previous property owner.
According to one of the board members a similar case had occurred several years ago. At that point, the board opted to decline the request for abatement.
“To me it’s ridiculous,” he said, adding these were individuals who would have paid their bills had they been aware of them.
“I can point my finger at them, probably, and say, ‘You were told at the closing and you all just ignored it,’… but I’ve always felt the city should forward that bill to the new owner right after the first one if there’s no payment,” he continued.
City councilor Thomas Chittenden agreed that while the Donahues were partly accountable, he felt South Burlington had some responsibility as well. He questioned whether the city had not, at one point mailed welcome packets to new residents with information such as property tax bill protocol. According to City Clerk Donna Kinville, such a document had been proposed in previous years but denied due to budget constraints. The board discussed other system improvements but did not determine an exact solution. The board then entered a private session to deliberate and told Kevin his daughter should receive a verdict by mail within two weeks.
According to tax collector Martha Lyons, when a tax bill is returned undeliverable, or the previous property owner contacts her about receiving the new owner’s bill, Lyons sends a note to the new owner. However, all tax bills and delinquent notices must remain in the name of the owner of record as of April 1.
“With this property, unfortunately, it was one of those ‘nothing ever came back here so there’s no way for it to go through,’” Lyons said. “It’s an unfortunate thing that did happen and it does happen.”