Anchor Rising: Takin' Care of a Tax-Lien

December 15, 2008

Takin' Care of a Tax-Lien

Carroll Andrew Morse

Here's a better explanation of the point regarding Felix Garcia's tax-lien that I didn't do a very good job of making on Matt Allen's show on Friday night: If the standard operating procedure in the City of Providence is to release a tax-lien, before even a promised partial payment has actually been made, the City of Providence should let the public know, and some of the appearance of corruption in the Felix Garcia/John Cicilline case might go away -- but not all.

According to Christopher Bizzacco's affidavit, if the city was unable to obtain the $75,000 (part to be applied to a partial payment to the city?) from Cicilline by February of 2007, at the absolute latest, then the lien should have been restored, yet it never was. Why didn't the city reinstate the lien after February 2007? (And we know it wasn't because the property in question was sold in May of 2007, without the issue of the lien having been addressed).

To me, the repeated instructions not to cash the check, but the lack of mention of any instructions not to reinstate the lien is the strangest part of Christopher Bizzacco's affidavit. We know that the city still considered Felix Garcia's debt to exist, because it was continuing to track the interest on the money owed. Are we to believe that Robert Ceprano (the city tax collector), on his own, made a decision not to reinstate the lien and let the matter drop, and that Ceprano was the sole city finance official who would have been aware of the status of an unpaid debt of over $100,000?

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All excellent points.
Plus the freak of nature claims he doesn't know Garcia.
Well....Garcia gave the freak thousands of dollars and the freak gave PLUM CITY JOBS to 2 of Garcia's relatives.

Posted by: Mike at December 15, 2008 7:53 PM

The first I heard of this, I wondered why municipalities couldn't have a procedure put in place whereby a refinance could happen. Specifically, if a tax debtor wanted a refinance, there could be a check cut directly to the municipality and the remaining net proceeds would be delivered to the (now ex-)tax deadbeat. The municipality's check would be delivered in consideration of simultaneously removing the lien and clearing the title.
Instead, the city still has the lien in place, it has no more money than before, the mortgage has been granted on clouded title - a veritable trifecta.

Posted by: chuckR at December 15, 2008 9:07 PM

Chuck,

There's this whole weird privateering aspect to tax-lien resolution in Rhode Island that I'm not sure is in the public interest, as much as it is in the interest of lawyers looking to for a source of cash. Notice this sentence from the affidavit…

Hammer [the attorney hired by the city] did not want to do any additional work on the file because he had not been paid for any of the work he had done to date. Hammer is paid only if the debt is collected, and would have been paid $15,000 had the check been cashed.

Was Scott Hammer really going to get $15,000 for collecting $60,000 on a $98,000 debt, or is "had the check been cashed" being used somewhat sloppily in the affidavit as a stand-in for "had the debt been collected"?

Either way, if this is in any way a typical example of how tax-liens are handled in RI, if your suggested process is put into place (which sounds reasonable to me), it would then become worthwhile for delinquent property owners to take a stab at solving their own tax problems, and a bunch of lawyers currently familiar with the tax-lien process would start to miss out on big pay days.

I'm very curious as to whether other states handle their tax-lien problems in the same way that RI does.

Posted by: Andrew at December 16, 2008 8:23 AM