Colorado Property Tax Distraint Sale Mobile Homes Analysis

Recent U.S. Supreme Court decision impacts Colorado's property tax laws, potentially unconstitutional. Analysis indicates mobile home sales may be deemed unconstitutional unless certain criteria are met. Proposed amendments aim at moratorium and task force creation to address current issues related to mobile/manufactured homes in Colorado.

• Colorado
• Property Tax
• Supreme Court
• Mobile Homes
• Constitutional Law

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Uploaded on Jul 08, 2024 | 0 Views

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1. SB24-097 Property Tax Distraint Sale Mobile Home Sheila Reiner 3-6-24

2. What did the Attorney General Say? The entire opinion can be found at: https://coag.gov/attorney-general-opinions/2023- formal-ag-opinions/ Question Presented. (1) Are Colorado laws governing the process to recover unpaid property taxes on real property and mobile homes unconstitutional, in part or in full, following the recently decided U.S. Supreme Court decision, Tyler v. Hennepin County, 143 S. Ct. 1369 (2023)? Short Answer. (1) Yes, in part. Under Colorado law, in rare circumstances, a taxpayer may lose all rights to their real property or mobile home as a result of unpaid property tax and have no right to receive any compensation if the value of the property or mobile home exceeds the amount of the tax debt. In those rare circumstances, following Tyler, Colorado s statutory process for both real property and mobile homes may be found to result in deprivations of property that constitute an unconstitutional taking in violation of the Fifth Amendment Takings Clause of the U.S. Constitution.

3. Analysis Under Tyler, distraint sales of mobile homes are unconstitutional unless the home has been abandoned or the tax debt exceeds the value of the home.

4. The bill as introduced Did not account for any current investors Created a requirement for us to determine market value and auction the mobile Directed us to provide overbid fund to owners

5. We requested a BIG amendment Suggested Amendment Outline for SB24-097 1) Establish a moratorium on the destraint and issuance of Certificates of Purchase on Mobile/Manufactured Homes 39-10-111.5 2) Establish a task force to make recommendations to alter statute in the 2025 legislative season to address the interest for currently held Certificate of Purchase holders previously issued under 39-10-111.5 and revise statutes to change how mobile homes/manufactured homes are titled and taxed in the State of Colorado affecting at a minimum Title 1, Title 4, Title 5, Title 18, Title 24, Title 32, Title 37, Title 38, Title 39 and Title 42.

6. The Survey results 31 Counties Responded 231 Certificate of Purchases outstanding Worth $232,009.01 owed to current investors Certificates of Ownership issued in 2022 75 Certificates of Ownership issued in 2023 55 How many Certificate of Ownership are in process - 8

7. Revenue Consideration Number of mobile homes currently taxed? 22,870 Dollars expected to be collected? $2,414,073.99

8. Ideas submitted through the survey In 1974, the legislature formed a commission to look at mobile homes in totality. They changed the tax, registration, assessment, etc... system into what we have today. I believe that the Legislature ought to freeze the sale of mobile homes and tax liens on mobile homes and form a similar commission. I strongly believe that mobile home owners will be better served if they were totally taxed and registered where they were prior to 1976; with the Clerk as if they were vehicles. If there is a concern about the Tyler v Hennepin ruling and owners losing mobile homes for non-payment of property taxes, maybe they should go back to the clerk in MV for tagging. No one ever lost their care because they didn't renew the tag. If the owner ever sells the MH or moves it, or even insures it, they will bring it up to date then if they're not paying timely.

9. More comments from the survey Take them off the property tax roll & tag or plate by Clerk unless they have a purged title and are permanently affixed to the land. I think the process should be similar to status quo, but that the period that someone can lose their home in be extended to 3 years like R accounts. I think not doing so is an inequity. Mobile Homes either need to be treated like real property or like vehicles... all in the treasurer's office or all in the clerk's office, not half and half. I lean towards treating like a vehicle as that is how the title is generated. The DRIVES system can collect a property tax and disburse just as they collect use tax for towns and the state and distribute. or I am less inclined to do this, but train Treasurer's office how to re-title in DRIVES so that the entire process is done in the treasurer's office and then can be electronically recorded.

10. And more comments from the survey Exempt them, most of my mobile homes are old certificated, not sure they are even livable. If the mobile is in a trailer park the first right of refusal for tax lien should go to the owner of the park. The biggest issue for changing the TR deed issuance from 1 to 2 years is that if the mobile is in a park, the owner of the park is out 2 years of space rental! As a small business owner this could be devastating to be out of that income. It can impact the desirability and public safety of the park if that mobile home has trash strewn inside and out and nobody can do anything about cleaning up lot and destroying home. TR Deed issuance should remain at 1 year after the tax lien sale.

11. One more list of comments gathered from the survey Remove from lien and tax sale process for sure. In a few years I will be down to taxing zero if the current threshold stays in place. Run entirely through DMV Remove from the tax lien process