The Lake County Council gave final approval to repeal the county’s current tax sale ordinance to create a new one with an added penalty as requested by the Lake County Auditor’s Office that goes beyond state statute.
The ordinance was amended to reflect that tax sale buyers can register in person or online, which Council president Christine Cid, D-East Chicago, requested at a previous meeting and that the auction is only online, said Lake County Council attorney Tom O’Donnell. The ordinance was also amended to include the 25% penalty in a further paragraph related to the 150 day filing deadline, he said.
Under the ordinance, which the council approved in a 7-0 vote Tuesday, if a tax sale buyer doesn’t file a court order to issue a tax deed signed by a judge, along with other documents and payments, within 150 days of the court order to the Lake County Auditor’s office, the buyer will receive a refund of the tax sale purchase minus a 25% penalty.
“This benefits the county so that the deed can be transferred in (a buyer’s) name and thus placed on the tax rolls,” Cid said.
During the council’s study session, Auditor’s office attorney Randy Willey said the office would like the 150-day deadline with the penalty put into the ordinance because currently not everyone comes to the office to file the signed tax deed.
“Some of it is just by accident … some of it is nefarious. That’s what we’re trying to stop,” Willey said. “That was the main change.”
O’Donnell previously said under the current system if someone buys a property as part of the tax sale process and then gets “buyer’s remorse” early in the process, that buyer would still pay 25% of the bid price.
“This is people that get buyer’s remorse possibly later in the process, would also owe 25%. The goal is to have parity from the two different penalty phases,” O’Donnell previously said. “It’s not in the statute right now, we’re lobbying the legislature to do that.”
Under the current tax sale structure, the auditor’s office staff have spent a lot of time and labor in reviewing tax sale bids, O’Donnell said. For about 40% of the application, the staff members get part way through and realize some items are incomplete, he said.
“They’d start the vetting, then they’d have to stop the vetting and then they’d have to redo the vetting. That’s why they would like to have it be a hard stop, everybody understands if you don’t do it you’re just out,” O’Donnell previously said.
Lake County Councilwoman and president Christine Cid, D-East Chicago, asked why not wait until the legislature passes a law about the deadline for filing a signed tax deed. Willey said that could be a possibility, but the next tax sale is in the spring and officials anticipate a new state law in July 2025.
Willey said that currently, the registration for a tax sale property is only online. Cid said she’d like to include in-person registration as well, which Willey said he would be open to.
O’Donnell said the rest of the proposed ordinance follows state statute on tax sales. The proposed ordinance would require all tax sale bidders to register online but prohibits bidders from filing multiple applications or revising previously filed applications once they have been filed and the auditor’s tax sale department begins the bidder registration vetting process.
Under the proposed ordinance, if a tax sale bidder doesn’t properly complete, file and download the online application it will be immediately denied.
All bidders would be required to pay a $500 registration fee, which would be applied to any winning bid, refunded if a bid is lost or applied to possible delinquent taxes a bidder may have. Also, bidders would have to pay a $100 non-refundable “paddle fee” to participate in the tax sale, which would go into the council general fund to be used for defraying expenses of the tax sale or reduce the number of vacant and abandoned houses, according to the proposed ordinance.
Bidders could not bid on “behalf of” or “at the direction of” another person or business. The name a tax sale bidder registered under would appear on the tax sale certificate and tax sale deed, according to the proposed ordinance.
“Bidders must bid on their own behalf and pay for the tax certificates on their own behalf from their own funds and bank account,” according to the proposed ordinance. “The mere purchase of a tax sale certificate does not convey any ownership rights to the parcel, unless or until, the purchaser has met all Indiana code requirements and the Lake County Circuit Court has ordered the issuance of a tax deed and the tax deed has been issued and recorded.”
The remaining part of the proposed ordinance outlines the timeline of documents and payments due in the tax sale process, which includes the 150-day court order deadline and a 25% penalty.
The ordinance will be implemented following approval by the Lake County Board of Commissioners, O’Donnell said.
