Christine Searle learned the importance of being fair, thanks to the horses of Tucson, Arizona. Intelligent and honest creatures, horses can spot lies from miles away. She wishes the state of Arizona could embrace this principle, instead choosing the unfairly take homes over minor taxes.
The 70-year-old, Arizona native horse trainer Christine Searle is facing the loss of her entire life savings due to an unpaid property tax bill of $1,607.68.
“I owed them the money. And they should receive the amount I owe them,” Ms. Searle said.
“I really don’t believe that they have the right to take everything.” Ms. Searle said.
According to the Pacific Legal Foundation (PLF), Arizona is one of nearly a dozen states that permits creditors to retain all the proceeds from sales of foreclosed homes due to unpaid taxes, a process called tax lien sales.
A 2023 U.S. Supreme Court case from Minnesota might give some hope to property owners in these situations, but only if a similar case is brought forward in their state. In the 2023 ruling, the justices declared that Minnesota’s practice of retaining all the proceeds from a tax sale constitutes an illegal seizure of property.
Chief Justice John Roberts wrote in the unanimous decision “The taxpayer must pay what is owed, but nothing more”.
However, current laws in 10 states and the District of Columbia don’t allow for returning the excess proceeds from a home sale. These states include Alabama, Arizona, Colorado, Illinois, Massachusetts, Minnesota, New Jersey, New York, Oregon, and South Dakota.
Lawyers from the Mountain States Legal Foundation representing Ms. Searle, refer to this practice as “home equity theft.” Ms. Searle hopes that her case will be the one to rectify these issues in Arizona.
In Arizona, a county treasurer can impose a lien on a property for unpaid taxes. These financial claims are subsequently sold in an online auction, where buyers can bid the lowest interest rate, they intend to charge property owners to redeem their lien. Starting 16 percent, and the lowest bid wins.
Buying a tax lien doesn’t mean you own the property. In Arizona, the property owner has three years to pay the overdue taxes, along with any associated fees and interest. If the debt is not settled within this time period, the lienholder has the right to foreclose and sell the property.
Unsold tax liens are transferred to the state. The state retains the right to foreclose on the property but is required to return any excess proceeds to the former property owner.
In 2005, Ms. Searle purchased a three-bedroom, two-bath rental house in Gilbert, Arizona, for $255,000. Just 22 miles southeast of Phoenix. The property appraised at $376,800 for 2024 property taxes. But she stands to lose significantly more than the taxable value.
According to various real estate websites, The current market value of the property is estimated between $420,000 and $510,000.
Arapaho LLC Tesco, an investment firm, acquired the tax lien on Ms. Searle’s property as part of its purchase all of Maricopa County’s 2015 and 2016 tax liens. Under the current law, the firm stands to gain a substantial profit if it sells the property.
Arapaho’s contact details were unavailable. An internet search revealed that the Phoenix-based company, which is involved in multiple legal actions in Arizona, lists Hamilton Municipal Financing from Altamonte Springs, Florida, as a principal. Hamilton is incorporated in Delaware.
According to Pacific Legal Foundation (PLF), tax liens are favored by banks, investment firms, and other financial institutions because they are considered relatively secure investments.
Data from the PLF show sthat Maricopa County sold 567 tax liens between July 2012 and March 2021. A review of those records by credible sources found that about 424, or around three quarters of the buyers were businesses, namely, incorporated entities, an LLC, a trust, or a DBA (doing business as).
Retirement Plan Disrupted
Sitting on a metal patio chair under a shady tree in front the stables on her dusty ranch near Tucson, Ms. Searle discussing her disrupted retirement plan.
“I invested all my money in that home for my retirement plan, rather than putting it in a [certificate of deposit] or a bank account. I could make some extra cash on the side to pay the mortgage and sell the home when I needed the money,” she said.
Ms. Searle is shocked at how close she is to losing all her life savings to an investment firm.
For 18 years, Ms. Searle lived in Chandler, Arizona, with her then-husband and son, Randy Searle. She said she had a comfortable, typical suburban middle-class life. Her husband worked for a jewelry and memorabilia company for schools, while she trained horses.
Ms. Searle was aware that she might lose the property over unpaid taxes. But she thought it only happened to other people. It wasn’t something she ever imagined would be part of her life or something she knew very much about.
“I just didn’t think about it,” Ms. Searle said.
Then the divorce happened, and she had to think about many things she had never really considered before.
Ms. Searle needed to support herself. Her son was grown, she could live a simpler lifestyle. Ms. Searle used her divorce settlement to buy a house in Gilbert to rent it out to make some extra cash.
Ms. Searle’s job isn’t just about teaching horses. Many horse owners live and work far from Tucson, so she’s the main caregiver for the horses. Ms. Searle, feeds and exercises the horses and arranges their veterinary care and farrier services for them.
“I was responsible for paying the property taxes but … I didn’t have the money to cover them.”
Randy Searle, Christine Searle’s son
“I really don’t have a nine-to-five job; I’ve only got a 24-hour job. Whenever something goes wrong, I come down here and take care of it,” she said. “I do it because I love it. … not because it’s lucrative. No ones making a lot of money here.”
Ms. Searle’s son feels responsible for his mother’s predicament.
Mr. Searle, living in Gilbert house as the tenant, said it was his responsibility to manage the property. Simultaneously, he was attempting to establish a solar energy company in Rhode Island.
According to Mr. Searle, “I am responsible for paying the property taxes, but when our company went for a business trip in Rhode Island, I just didn’t have the funds to pay for it,”
He mentioned that he had arranged a plan with Arapaho to redeem the 2016 lien. However, due to a miscommunication, Mr. Searle unaware that foreclosure proceedings had already began over the 2015 taxes.
Not long after, he got an eviction notice from Arapaho and American Pride Properties LLC, which had taken over the lien from Arapaho.
According to Jordan Dale, chief of staff for the Maricopa County treasurer, that he couldn’t comment on a specific case and directed them to the treasurer’s website for information.
He mentioned that it’s the lienholder, not the county, who decides whether to foreclose. According to Mr. Dale, a lot of this process happens between the lienholder and the property owner through the legal system.
The Restricted Area
Over 2,600 miles away, in Bolton, Massachusetts, Alan DiPietro is dealing with a property tax issue that his lawyer describes as a Catch-22 created by the town.
“This case is so detailed that it would give Franz Kafka nightmares,” PLF attorney Joshua Polk said.
Mr. DiPietro filed a case against Bolton, claiming it is using state law to block his attempts to pay his property taxes to seize his land.
“If the town had simply permitted Mr. DiPietro to pay his taxes, they would have their money, and he would retain his property,” Mr. Polk said.
“However, it seems like they are more interested keeping the property than in actually getting the money they were owed.”
On June 20, 2014, Mr. DiPietro purchased 34 acres on a wooded hillside for $160,000 the land includes a small pond and a ditch. The property spans county lines, with 28 acres in Bolton, Worcester County, and six acres in Stow, Middlesex County.
Mr. DiPietro’s lawsuit claims that the property is now worth $370,000.
In 2021, the town of Bolton seized the property due to a debt of $60,000 back taxes.
“This lawsuit claims that Bolton broke the U.S. and Massachusetts constitutions and unjustly took Mr. DiPietro’s Property without providing him a compensation,” the lawsuit reads.
Mr. DiPietro is a friendly man who tells his story with more shock than anger. He’s amazed at the roadblocks he says town officials have put up to stop him from paying his taxes.
“It’s so crazy when they say, ‘Yes, we are entitled to your equity and your property. But we didn’t do anything wrong because you can file a case against us and get it back if you want,’” Mr. DiPietro said.
“Well, you didn’t have the money to pay your taxes, and you couldn’t afford to hire a lawyer. Where are you going to get a half million dollars to file a case against them in federal court?”
Mr. DiPietro understood it would require a significant effort to restore the property. He had no clue what challenges would come next.
Mr. DiPietro, a mechanical engineer, was part of the team that designed a popular robot vacuum. Fed up with corporate bureaucracies and micromanagement, he decided it was time for a change.
Back then, Mr. DiPietro had a small alpaca that had grown on his property in Maynard, Massachusetts. He thought the property in Bolton was just right. He knew it would take a lot of work to get it in shape. He didn’t realize what was coming next.
“When I was growing up, this place was an old farm that hadn’t been used and was becoming overgrown. I figured there’d be some problems. But I had no idea how severe it would be,” Mr. DiPietro said.
Not long after buying the land, he and his wife separated and ended up getting divorced.
Mr. DiPietro’s lawsuit characterizes the divorce as “financially devastating,” ending in bankruptcy.
However, he had a 401(k) plan that he could invest in his new alpaca farm.
Mr. DiPietro plans to construct a house for his parents and one for himself on the 110 Teele Road in Bolton at southernmost parcel. He began the permit application process for the houses and started building a home for his alpacas. Including building what court documents described as “rustic wooden fencing.”
The fence runs northeast along the property’s frontage on Teele Road and is constructed from branches cut from trees on the land, barbless wire, like the kind used for horse fences, runs through the fence. Mr. DiPietro built sheds and other structures he needed to care of the alpacas.
He mowed the grass to make it easier for the alpacas to graze.
“That’s when the towns consider that I was the biggest threat to the surroundings they’ve ever seen,” Mr. DiPietro said.
The Stow and Bolton conservation commissions told him that he might have violated the Massachusetts Wetland Protection Act. He was instructed to explain how his activities complied with the act or to restore the land to its original condition.
Mr. DiPietro found out that wetlands need a “buffer zone” where no work can be done. The pond and ditch on his property, along with other parts, were classified as wetlands. These buffer zones made it impossible to use any part of the property.
“They’re putting a buffer zone on top of buffer zone following to vegetated wetland, which is really just a buffer zone because it’s not actually a wetland,” Mr. DiPietro said. “They’ve stretched the definition of wetlands so far it’s really ridiculous.”
Mr. DiPietro attempted to grow industrial hemp to raise funds to pay the taxes. However, his crops were stolen.
The towns sued Mr. DiPietro, and the legal bills further drained his financial resources. He couldn’t pay his property taxes.
Mr. DiPietro attempted to grow industrial hemp to raise funds to pay the taxes. But his crops were stolen. Mr. DiPietro tried to cut and sell timber, but that raised more environmental issues.
According to his lawsuit, he discovered emails showing that town officials told local postmasters to stop delivering his mail. His mailbox on Teele Road, marked the number 110, had previously received mail, Mr. DiPietro said.
However, his mail delivery mysteriously stopped right about the time that towns sued him.
Mr. DiPietro said the emails showed that the Bolton town clerk told the postmaster to stop delivering mail to his Teele Road mailbox because the city hadn’t issued the address.
He said that he had already lost the wetlands case by the time he noticed his mail had stopped.
“When I checked, I saw my mail had been stopped, I had already missed court correspondence, and was default. They won the wetlands case because I never even got to present my side,” Mr. DiPietro said.
He and his lawyer think that the town has a strong reason for blocking his efforts to pay his taxes.
“Bolton has a monetary incentive to foreclose and then store or sell valuable properties, like the one in this case, instead of helping owners to avoid foreclosure.”
Property values in the area have risen significantly over the past 10 years.
The website shows undeveloped land near Mr. DiPietro’s property valued between $140,000 and $230,000 per acre. It also reveals that single-family homes in the area have recently sold within days of being listed. With most selling in the range of $500,000 to $1 million.
A two-bedroom, two-bath, 904-square-foot home on less than a half-acre near Mr. DiPietro’s property, was recently listed on the market for $426,153.
With $370,000 invested in the property and a $60,000 tax bill to pay, Mr. DiPietro decided to stop fighting and just sell the lot to cover the taxes. He expected to make about $200,000 on the sale, which would more than cover his tax debt.
Mr. DiPietro stated there’s evidence indicating that the towns actively participated in blocking the sale of his property.
But Mr. DiPietro says the town made things even more complicated.
He didn’t get the permits that he’d applied for, so no one would buy the property. Local authorities refused to grant the permits due to his unpaid taxes. Mr. DiPietro claimed there’s proof that the towns actively tried to block the sale.
Mr. Polk said the emails they found show that town officials reportedly discouraged potential buyers. He thinks the town is more interested in getting a windfall than collecting taxes.
“While the town didn’t directly say sale wouldn’t be possible, they did say it’s complicated situation and to be cautious. As result, potential buyers were basically scared off,” Mr. Polk said.
The town offered a payment plan where Mr. DiPietro would pay $100,000 upfront, followed by monthly installment. However, the plan had no guarantees.
“They’re already telling me, that a $200,000 lot, ‘You’ve got to come up with $100,000 upfront to see if the towns will grant you the permits or not,’” Mr. DiPietro said.
Mr. Polk said state and local officials know about the 2023 Supreme Court decision that ruled their practices unconstitutional. But that decision hasn’t had much effect in Massachusetts.
According to Michelle Carlisle, Bolton Town Clerk, she emailed The Epoch Times that she couldn’t comment on active litigation. She told the reporter to look up Massachusetts’s state law.
No Way to Return the Money
Mr. Polk stated the Supreme Court decision poses a problem for states like Arizona and Massachusetts.
In Tyler v. Hennepin County, Minnesota, the Supreme Court decided that keeping more than the taxes due, after a tax sale is illegal under the Fifth Amendment.
The Supreme Court has followed the same logic in subsequent decisions.
On June 5, 2023, the court issued unsigned, unanimous orders, summarily reversing two rulings by the Nebraska Supreme Court.
The Existing law doesn’t have a way for towns to return extra funds to the original owner.
Joshua Polk, attorney for Alan DiPietro
Mr. Polk said it’s up to state legislatures to write legislation needed to comply with Tyler but pointed out that this is almost impossible in Massachusetts.
“Massachusetts response, or lack of response, to the Tyler case has put municipalities in a tough spot since the current law doesn’t provide a system to return extra funds to the original owner,” said Polk.
But that doesn’t mean everyone is ignoring the problem.
Massachusetts Attorney General Andrea Joy Campbell released guidelines for government officials and property owners on what to do after the Supreme Court decision. The guidelines say, the state’s law is unconstitutional, and no government entity should take more than the taxes owed.
“Not following this principle could lead to liability for an unconstitutional taking,” the guidelines read.
Ms. Campbell didn’t reply to a request for comment on this story.
Massachusetts Democratic state Senator Cynthia Stone Creem introduced a bill, S1774, waiting for a reporting date in April.
The three-paragraph bill states, “Regardless of paragraph (a), a taxpayer or their heirs should get the surplus from any sale of the property after the deduction of all costs, charges or expenses, taxes and interest owed.”
Ms. Creem didn’t reply to requests for comment.
Arizona’s Republican state representative, Gail Griffin, sponsored HB 2098, a bill intended to change state law, allowing property owners to petition the court to get back any sale proceeds above taxes and fees returned to them.
The state House passed the bill at the end of February, and it’s now in the Senate.
Ms. Griffin didn’t reply to a request for comment on this story.
Everyone Has to Pay
Ms. Searle and Mr. DiPietro accept that they have to pay taxes.
“I don’t want to pay for the new school, but fine, I’ll admit that I might I owe it,“ Mr. DiPietro said. ”However, you don’t have the right to take ten times as much just because I couldn’t pay on time.”
PLF attorney Christina Martin said Tyler v. Hennepin County, Minnesota, which she argued, along with the Nebraska orders, serves as a warning for states that engage in “home equity theft.”
“These states should take notice: Change your laws or risk millions of dollars in damages in court,” Ms. Martin wrote in a statement.
Mountain States Legal Foundation counsel William Trachman refers to his client as an unlikely hero. But Ms. Searle does not perceive herself in that way.
She expressed that she had been backed into a corner with nothing left to lose. If she wins, she will reclaim what is hers, and if she loses, she will be no worse off. According to Ms. Searle, The principle is worth the fight.
“I think people need to have the courage to do what’s right and stand up for what is right,” she said. “If a law is wrong, do you simply accept it and walk away?
