Senate Committee Weighs S.196 to Shorten Tax‑sale Redemption Period; Debate Over Purchaser Access
Loading...
Summary
The Senate Committee on Government Operations heard testimony Feb. 13 on S.196, a bill that would cut the post‑sale redemption period from 12 to six months and allow purchasers (after notice) to secure properties during redemption; witnesses and members urged more data and cautioned against empowering private purchasers to enter occupied homes.
The Senate Committee on Government Operations on Feb. 13 took up S.196, a bill sponsored by Sen. Clarkson that would reduce the post‑tax‑sale redemption period from 12 months to six months and expand who may secure a property during that redemption period.
Cameron Wood, an attorney with the Office of Legislative Council, told the committee the bill is relatively narrow and "would reduce that redemption period to 6 months," while also adding conditions that would let municipalities — and, after a 10‑day notice to mortgagees or lienholders, a purchaser at the tax sale — secure property to prevent illegal activity, damage from exposure to the elements, deterioration or fire hazards. Wood recapped recent statutory changes: the statute requires at least one year of delinquency before a sale, municipalities must offer a reasonable repayment plan, Act 73 added a $1,500 minimum threshold, and interest during redemption currently accrues at 1% per month.
Several committee members and witnesses expressed concern about extending securing rights to private purchasers. Unidentified Speaker 5 warned that "handing over random civilians the ability to gauge what is illegal activity" could create "dangerous vigilante type situation[s]," arguing legal authority and municipal oversight are important safeguards. Wood and others noted the 2024 working group, which included Vermont Legal Aid, the Vermont Housing Finance Agency, the Vermont League of Cities and Towns, NeighborWorks and other stakeholders, had recommended against some expansions of purchaser authority because of those safety and legal‑liability concerns.
Peter Tucker, director for advocacy and public policy for the Vermont Association of Realtors, testified that tax‑sale purchases are risky for buyers and said an attorney involved in tax sales estimated roughly 80% of tax sales are ultimately redeemed by the delinquent taxpayer. Tucker said his association's government affairs committee reviewed the bill and "are supportive of the changes in this bill," while clarifying he supported allowing municipalities to secure vacant or clearly abandoned properties and that his group "fully support[s] reducing the redemption period from 12 months to 6 months," citing reduced education‑tax exposure for towns and greater certainty for buyers.
Members debated practical issues the bill raises, including who holds title and insurable interest during redemption, whether a purchaser could obtain insurance before ownership vests, how to define "vacant" or "abandoned" in statute, and the potential need for municipal resources to secure or preserve structures. Multiple speakers said the working group had disagreed on whether to change interest‑rate rules during redemption and had proposed statewide education and standardization for municipal tax‑sale procedures.
The committee did not vote on S.196. Instead, members asked for additional data and more stakeholder testimony; the chair scheduled the bill for further consideration next Wednesday and said the panel planned to hear from the Vermont League of Cities and Towns (VLCT), Chris Delia, Vermont Legal Aid and attorney O'Toole. The committee left open the possibility of modifying the bill to preserve municipal authority while addressing concerns about private purchasers' entry and liability.
