An Introduction to the Tax Recovery Act

Abstract

The Tax Recovery Act governs the collection of property taxes by a municipality in the event that a property owner fails to pay the required taxes. This article describes the implications under the Act for failing to pay property taxes, and then, examines the procedures under the Act that must be followed by the municipality to recover overdue taxes. In examining the procedures in the tax forfeiture process, the writer describes the respective rights and remedies available to the municipality and the taxpayer. The writer then argues that while the Act appears to be well thought out, it contains several significant deficiencies. Specifically, the Act unclearly defines the respective rights of the municipality and the taxpayer in the following areas: fiduciary duty, public sale, final acquisition, private sale, redemption and contaminated liability. The writer then proposes improvements in each of these areas, and concludes that the most effective way to remedy the deficiencies under the Tax Recovery Act is to immediately create replacement legislation setting out a new scheme of tax forfeiture which incorporates all of the writer's suggestions. This will clear up any uncertainties, and therefore, decrease the amount of litigation in the area of property tax recovery.