All over the country, homeowners and their municipalities are discovering that they are going to have to find a way to work together on utility bills. In many areas of the country, local governments are reporting that delinquent accounts have tripled as homeowners struggle to make payments or simply inform the country that the bills cannot – and will not – be paid[1]. This creates serious problems for city governments, which are responsible for schooling and public safety, among other things, and often rely on the current year’s tax dollars and utility fees to fund their budgets. When utility fees are deemed uncollectable, the county can foreclose on the property and sell the deed at a tax auction or, depending on the location, sell the lien itself at a tax lien auction, but this process generally takes over a year and is not initiated until all other routes have been exhausted. As a result, explains one director of utilities, thousands and even hundreds of thousands of dollars are just “hanging out there” in limbo waiting on properties to be sold.

Because of the difficulty recouping money spend on lawsuits and of the need for money soon, many municipalities may switch from selling tax liens – which, when they are purchased, only satisfy the property taxes owed on a property – to foreclosing on the homes and auctioning off the property in hopes of recouping utility debts as well. In fact, many areas of the country, such as Orange County, Florida, are taking their foreclosure auctions online as well to make these properties as accessible as possible to investors in hopes of attracting more buyers[2]. Do you feel that your money is better spent on the purchase of tax liens that may be redeemed in cash with interest or may result in your eventual ownership of a house, or would you rather purchase the house outright at a tax deed foreclosure auction?

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[2] http://www.publicopiniononline.com/localnews/ci_17178681