Posted: Apr 24, 2012 11:31 PM by Marnee Banks (Helena)
Updated: Apr 25, 2012 9:58 AM
If you're not paying your property taxes, you risk losing your home to someone for pennies on the dollar. It's happening in Montana and the practice is legal. Montana's News Station Reporter Marnee Banks went on special assignment and tells the stories of those who were caught off guard by the process.
This story is part one in a series of two where Montana's News Station examines the property tax process in Montana.
Montana Land Protection owns a house on 6th Street NE in Great Falls. Tony and Ruth Rucinsky used to own the property, but now just live in the home with their two sons.
"I didn't know that there were laws that allowed this stuff. I just don't know how it can happen," Tony says. "I mean a house is a huge, huge investment."
Property taxes are due in November and May every year, but due to tough economic times the Rucinskys fell behind on their tax payments.
"It's tough to get by," Tony says. "It's tough to pay for gas, for food, let alone pay $3,000 a year for taxes."
When a property owner can't pay their property taxes, the county is required to send the property owner a notice. Every June, the counties compile a list of all the delinquent taxes then auction them off. Investors can buy them up and place a lien on the property. The investor must notify the property owner they are paying the delinquent taxes for them.
In the case of the Rucinskys, that's when Tony says Montana Land Protection wrote them a letter.
"It sounded like it was something to help us get by for the time being," Tony explains.
Lewis & Clark County property tax administrator Linda Lubke says most people buy delinquent taxes as an investment.
According to Montana law, the property owner can regain control of the property and eliminate the lien by paying the delinquent taxes plus interest. If that happens, the investor gets their money back plus a 10% profit. If the taxes go unpaid for three years, then the investor can take ownership of the property.
"Very few try to obtain the property because it is such a long process," Lubke says. "There is the misnomer that you can just pay the taxes and have ownership of the property. That's not true."
For the Rucinskys, they were unable to come up with the money to remove Montana Land Protection's lien. Tony says that's when Great Falls attorney Jon Kudrna came to the house representing Montana Land Protection.
"He said he now owned our home, that we needed to get out or buy it back at fair market value or rent it from him at fair market value," Tony explains.
The Secretary of State's Office lists Great Falls attorney Stephanie Oblander as the organizing manager of the company.
Montana Land Protection owns more than 40 properties just in Cascade County. Mr. Kudrna and Great Falls attorney Brion Lindseth have signed several of those tax deeds as members of the company.
None of the attorneys would return our requests for comment.
In part two Montana's News Station takes a look at several other related companies, which are also investing in delinquent taxes all across the State of Montana.