5 p church tax fight transf City Wants Church To Repay Back Taxes On Foreclosed Property

Set Free Deliverance Church in southeast Dallas. (Credit: CBSDFW.com)

DALLAS (CBSDFW.COM) – Dallas Councilman Scott Griggs hopes to finesse an agreement that forgives a church’s $170,000 in back taxes it never thought it would owe, even though it bought two parcels of vacant land for $25,000.

The Set Free Deliverance Church claims it was told it wouldn’t have to pay any back taxes on the foreclosed property it purchased for a new church home –– not the original back taxes that forced the foreclosure, nor the new taxes tacked on since.

The church feels the problem is the way the city runs its “struck off” program for unwanted land.

“I told them we should not be held responsible for a mistake made in their office,” Annie Rolfe said.  She says the church specifically asked ––repeatedly –– about whether it was on the hook for any taxes purchased under a special city of Dallas “struck off” program.

Struck offs are properties so unwanted they can’t even be sold at a Sheriff’s auction.

“It is a complicated process,” said Theresa O’Donnell, speaking of the program and the church’s effort to buy property, “and I think the unfortunate thing here is we have folks that aren’t experts, aren’t professionals in the industry.”

O’Donnell, who is the city’s director of the Department of Sustainable Development and Construction, says the city’s paperwork, its website and the deeds are all abundantly clear: The buyer has to make sure there are no encumbrances.

“We do post those requirement on our website, it’s in our literature, it’s in the deed that’s conveyed when the property is sold,” she adds.

Rolfe insists she received verbal assurances that that wasn’t the case.

“This was clearly misleading us because they knew the taxes, they knew that taxes were owed on that property,” she said.

Griggs cautions that verbal assurances aren’t very reassuring when dealing with property issues.

“Always when you deal with the city, especially if it’s important, get it in writing.  ‘Can I have your e-mail and fax?’  And then go ahead and confirm conversation between the two parties prior to the transaction,” Griggs said.

O’Donnell admits that up until about three years ago there was some confusion on the issue, but the policy has been plain ever since. Meanwhile Griggs, the councilman for the area where the church wants to build, says he’ll do what he can to try to resolve the issue and hopes it can eventually be brought to the full council.

“We’ve taken the first step to help, one we’ve raised the problem with the city attorney, and we’re probably going to have a briefing on it from the attorney as soon as we get back from the summer break,” he said.

The council traditionally takes hiatus during the month of July for vacations, though the city staff works year round.  Griggs met with church members on Monday to outline possible lines of action.

As it stands now the church could pay the tax, perhaps over several years; it could try to sell the property in hopes of making enough money to come out ahead and try to buy more land; or it could default and let the land go back into foreclosure.

“I think there are some options,” says O’Donnell, “(but) having liens extinguished is not one of them, unfortunately.”

City staff says its hands are tied –– the $170,000 in back taxes is closer to the property’s assessed value than the $25,000 the church paid, and an independent law firm is the collection agency representing the city, the county, and the school district, all of which want to be paid for the back taxes.

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