Breaking

Lieutenant Governor Osbert Potter, acting pursuant to the due process requirements outlined in Title 33, Section 2541 of the Virgin Islands Code, has announced the voiding of several property tax auctions that occurred between 2012-2013, according to a press release Potter’s office issued on Friday.

In May, the lieutenant governor advised residents who purchased property at government-sanctioned auctions conducted by the VI Collector’s Office during the aforementioned years, to make no any repairs, nor attempt to transfer ownership of the real property until “further notice.”

According to the May 11 press release, the Office of the Lieutenant Governor, after conducting a review, determined that the “properties may not have complied with the requirements of Title 33 of the Virgin Islands Code.”

The dates included in Friday’s press release are as follows:

January 25, 2012
January 18, 2012
May 23, 2012
June 5, 2012
August 30, 2012
August 29, 2012
November 20, 2012
November 15, 2012
February 27, 2013
March 6, 2013
June 20, 2013
June 26, 2013

According to Friday’s press release, In 2012 and 2013 there were 12 property auctions held Territory wide – 6 on St. Thomas and 6 on St. Croix. However, the notice of attachment that was sent to property owners was defective and thus all sales conducted during that time period are void.

It further stated that all tax-auction sales conducted on the above-referenced dates are rescinded, and all property sold at said auctions are hereby re-conveyed to the original owner, his/heirs or assigns as the case might be.

The property shall remain subject to all liens and legal claims against it to the same extent and in the same manner as though said property had not been sold for taxes, the release further stated.

Title 33 of VI Code, Section 2549, subtitled, “Penalties for Improperly Conducting a Tax and Public Sewer System User Fee Auction,” says, “If the Lieutenant Governor or any person acting on his behalf:

“If the Lieutenant Governor or any person acting on his behalf:

(1) Sells or assists in selling any real property —

(A) Knowing it to be exempt from attachment; or

(B) Knowing that the taxes for which it is sold have been paid; or

(2) Knowingly and willfully sells or assists in selling any real or personal property for taxes to defraud the owner thereof; or

(3) In any manner restrains bidders; or

(4) Knowingly or willfully issues a certificate of purchase of real or personal property so sold —

then the Lieutenant Governor or such person shall pay the injured party all damages sustained thereby, and all such sales shall be void.”

In September of 2014, the Office of the Inspector General released a damning report that laid bare its findings on inspections of government-sanctioned real estate auctions. The report confirmed there was “validity to the allegations of questionable bidding practices and a lack of compliance with statutory regulations governing real property auctions conducted by the Lt. Governor’s Office.”

The categories of unscrupulous practices were many, specifically that “as a result of procedural changes made in real property auctions by officials at the Lieutenant Governor’s Office:

(a) individuals were allowed to manipulate the bidding process, to fraudulently restrict other potential individuals from making legitimate bids on properties offered for auction,
(b) questionable and inaccurate bid recording and record keeping brought into question several of the reported highest bids for several properties that were sold,
(c) properties were not properly researched to ensure that they were eligible for sale,
(d) payment time frames established by the Code were not properly adhered to,
(e) adequate documentation of the Notice of Attachment process, as required by the Code, was not always maintained to ensure that taxpayers’ constitutional right of due process was followed, and
(f) auction costs and fees were not assessed and collected once properties were sold or redeemed.”

For additional nformation, please call Attorney Dolace Mclean at the Lieutenant Governor’s Office at 340-774-2991 on St. Thomas.