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Town warns new foreclosure rules will increase costs, asks how to finance upfront work
Summary
Templeton officials told the Select Board two tax-title properties are approaching judgment under new state foreclosure rules that require appraisal, listing and escrow procedures; staff recommended pausing additional foreclosures until the town establishes a funding mechanism to cover upfront costs.
Town staff told the Select Board on July 23 that recently enacted changes to tax-title and foreclosure procedures impose new up-front costs and tight deadlines once Land Court judgment is entered.
Cheryl (town staff), who oversees tax-title work, said two properties now in the process will fall under the “new legislation” described in the meeting: once the town receives judgment it will have 14 days to decide whether to buy the property or sell it, and the town must obtain an appraisal and list the property under the new rules. She told the board that the new process requires the town to advance attorney fees, appraisal, and realtor costs and that those upfront costs could be recovered later but must be advanced now.
Why it matters: Under the new procedure described to the Select Board, municipalities face immediate cash demands to get properties market-ready for sale; the town may also be required to place any remaining proceeds into an escrow-like account and satisfy claimants if there is excess. The new timeline reduces staff flexibility once judgment is entered.
Cheryl said some properties previously held in the tax-title pipeline had been resolved by owners paying before judgment, but that the new rules will quickly require decisions and expenditures by the town. She asked whether the board preferred staff to move forward with the court process now or to pause and develop a funding plan for initial expenses. One Select Board member recommended placing the pending cases on hold while the board defines a financing approach — for example, a revolving account that would advance costs and be replenished through recoveries.
Staff also reported that some pending foreclosure candidates could be auctioned later if they remain unsold after a one-year listing period required by the new statute.
Ending: The Select Board asked staff to pause further foreclosures while the board and staff evaluate options for an upfront funding mechanism and to return with a proposal on how to manage appraisal, realtor and cleanup costs for properties that reach judgment.
