DALLAS (CBSDFW.COM) – At $25,000, the congregation at the Set Free Deliverance Church in southeast Dallas thought their new land purchase was a good deal.
Then an unexpected tax bill arrived for $170,000 on their newly-purchased, foreclosed property.
“We did not set out to throw money away,” says Annie Rolfe, whose father, Rev. Morris Rolfe, took a different route in trying to get new land for their church.
Foreclosed property –– with existing back taxes now wiped away –– is most frequently auctioned off at the courthouse steps. But property that still gets no buyer at the Sheriff’s auction goes back to a government, like the city of Dallas, to try again.
It’s called ‘struck off’ property.
“You get a better price on the struck off because those properties didn’t sell on the Sheriff courthouse,” said Rolfe.
Last year the congregation bought two vacant struck-off parcels on Altoona Lane in southwest Dallas with an eye toward the future.
“It was a much larger property and we wanted to build a church. Right now we’re leasing, we want our own building,” said Rev. Rolfe.
The church is planning build a community center to help with food giveaways for the needy. But they were stunned when their property tax bill came.
“We’re well over $170,000,” says Ms. Rolfe, “for a piece of land we thought we would be paying an estimate of $25,000.”
The councilmember for this district, Scott Griggs, tells CBS 11 News there is a unique property tax problem on this land because it was foreclosed on so many years ago. He says while the original back taxes were eliminated in foreclosure, fresh new “post judgment” taxes were added every year since.
According to the Rolfes, that could be twenty years. The Rolfes claim the city never told them about it, though they asked. Griggs is trying to get the city to forgive the taxes but can’t do it alone.
Other taxing bodies, like county government, the school district, and the hospital district must also go along.
Attorney Clint David says in a more traditional property purchase, title insurance would’ve turned up this kind of problem.
“They would contact the taxing authorities and tell a potential buyer, ‘Hey, you’re buying this subject to twenty years’ worth of taxes.’” He said. “ But if you just walk in and buy a piece of real estate from a taxing authority just as it is, you take all kinds of risks. You’re still buying real estate and you’d better do your homework or you could run into a real land mine.”
The church feels the city’s program is misleading.
“Then the true sale is not what they’re out there making the bid for,” Rolfe said. “They clearly know that these taxes are owed and it’s a part of the sale. So it’s deceptive trade practices. You are selling a product that you that the citizen or the consumer has to be responsible for more and you’re not discussing that. And you’re saying to them, ‘You find out.’”
Rev. Rolfe believes the struggle with City Hall is just beginning.
“I don’t know what they’re going to do but I’m going to keep fighting. I’m not giving up,” he said. “Because it wasn’t my money; it was the church’s money.”