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The explosion of negative reaction to Mayor Murphy’s recent motion to post city legal notices on the city website instead of in the local newspaper obscures an important issue and that is, how are individuals to be notified of legal proceedings that might deprive them of their property and in some cases their personal liberty.

The Fifth Amendment to the United States Constitution states “nor shall [any person] be deprived of life, liberty, or property, without due process of law.” In this context, “due process” means that any governmental action must be fundamentally fair to the person who will potentially be harmed by it. Such fundamental fairness requires that the person receive reasonable (although not actual) notice of the proceedings against him. Similar safeguards are embedded in the Massachusetts Constitution and are implemented by various statutes of the Commonwealth.

For instance, Massachusetts General Laws chapter 244, section 14 which governs mortgage foreclosures requires that the party conducting the foreclosure give notice to the borrower and all others interested as follows:

no sale under such power shall be effectual to foreclose a mortgage, unless, previous to such sale, notice thereof has been published once in each of three successive weeks, the first publication to be not less than twenty-one days before the day of sale, in a newspaper, if any, published in the town where the land lies or in a newspaper with general circulation in the town where the land lies and notice thereof has been sent by registered mail to the owner or owners of record of the equity of redemption as of thirty days prior to the date of sale

Many other statutes require like notice of publication; just scan the last few pages of the local newspaper to get a sense of the wide variety of legal and governmental matters that require newspaper publication to comply with the law. I did just that for the week beginning Sunday, April 29 and ending Saturday, May 5. Here’s a breakdown of the legal notices appearing in the Lowell Sun during that seven day period:
 

• Mortgage foreclosures – 37
• Public meeting notices – 23
• Invitations to bid/RFPs – 11
• Juvenile Court notices – 5
• Probate Court notices – 7
• Sale of personal property – 4
• TOTAL ——————– 87

 
Whether intended or not, the Due Process question raised by Mayor Murphy’s motion is whether in a time of declining newspaper circulation, notice by publication in a newspaper satisfies the Constitutional Due Process requirements. The Supreme Court of Maine, in the 2009 case of Gaeth v. Deacon answered that question in the negative.

In Gaeth, the plaintiff received a $100,000 default judgment against the defendant, a former college student who had moved back home to Massachusetts after graduation but before the suit was filed. The defendant did not receive actual notice of the suit while he still had time to offer a defense. Rather, the plaintiff “served” the defendant with notice of the suit by publishing that notice in a local Maine weekly newspaper, all in accordance with Maine law.

In reversing the judgment in favor of the plaintiff, the Maine SJC concluded that “service by publication was not reasonably calculated to notify the defendant of the action and, although technically compliant with the rules, did not meet the requirements of due process.” and remanded the case back to the trial court to remove the default judgment. To be sure, the Maine court based its finding on the particular circumstances of this case and did not entirely overthrow the practice of service by publication. Still, the court’s language made clear its doubts about service by publication in a newspaper:

The practice regarding service by publication as a means to achieve notice of the commencement of a suit developed at a time when newspapers were the only means of print mass communication, and when newspapers were more widely and intensely read than is now the case.   Today, much has changed in the way of life that gave rise to the rules and practices regarding service by publication. . . Fewer people now read print newspapers, and those who do are likely to read them less intensely because an increasingly greater portion of the population obtains more of its information through television, the Internet, and other electronic media.   Further, the population is more mobile, making it less likely that a defendant’s relatives, friends, or acquaintances may see a notice by publication in a newspaper, report it to the defendant, and thereby give the defendant actual knowledge of the pendency of a suit.

When even the most stalwart defender of the local newspaper acknowledges that only 50% of Lowell residents get their news from the Sun, it begs the question, what about the other 50% of the population? How should they be notified of legal matters that effect them? Does a system that at its best only reaches half the population meet the Due Process requirements of the state and federal Constitutions? Until a case that raises that question makes it to the Massachusetts Supreme Judicial Court, we won’t know. But given that the SJC in the recent past has demonstrated a propensity to reach unexpected decisions in a variety of areas that many thought well settled, wouldn’t it be wise in the meantime to start exploring supplementary means of providing notice? The various statutes only set the minimum requirements. Why not start publishing legal notices generated by the city on the city’s own website in addition to whatever other publication is specifically required by the law. Such an extra step would cost nothing or next to nothing and it would establish a track record of using a local government website as a means of providing notice.

Social networking is great, but to me its true value is to make it easier for people to come together in-person and get things done. A great example of this comes on Sunday at “Mill City Skill Share” during which a number of individuals have volunteered to share a skill with others at no charge. Here’s some information from the Skill Share website:

Want to learn a new skill? Meet your neighbors?
Engage in a creative activity?

On Sunday May 6th, 2012, the first ever Mill City Skill Share will be held in historic Downtown Lowell, MA. Our goal is to share wisdom and knowledge through collaborative learning and connect members of our community in a way like never before! This promises to be a fun free event for all ages that shouldn’t be missed!

Over two dozen awesome workshops will be held from 10-6 at various locations throughout Downtown Lowell.

Registration and refreshments from 9:30-10:30 am at
The Mogan Cultural Center
40 French Street
Lowell, MA

Free for all ages!
Donations of non-perishable food items and gently used clothing are encouraged.

Visit our Workshops Page for workshop details, schedule, locations and map.
If you are interested in volunteering, sponsoring, donating food or services, or would simply like more information, contact us at millcityskillshare@gmail.com

The city of Lowell held its first in a very long time tax lien auction yesterday in the City Council chamber of Lowell City Hall. City Treasurer Elizabeth Craveiro (shown above) ran the auction which was attended by about 30 people. Ten seats in the front row of the spectator’s section had “reserved” signs taped to them. They were for the bidders who had pre-qualified. As each of the potential bidders arrived, he or she received a manila envelope containing among other things a sheet of heavy-weight yellow paper with a large number imprinted on it. This is how bids would be recognized and identified.

The auction opened shortly after 10 am. The Treasurer first explained that the auction would open with the sale of a single bundle containing all properties remaining (some had been pulled back either because the back taxes were suddenly paid in whole or part with a payment plan, or some had environmental or legal problems). The minimum bid for the entire bundle would be $6,099,997. The bidding opened but no bids were made. The Treasurer immediately announced “Hearing no bids, the auction for the entire bundle is closed.” Three sub-bundles were then offered for sale, one at a time. The minimum bids were $1,826,855 for the first; $1,813,424 for the second; and $2,459,717 for the third. No bids were made for any of these packages and each auction was immediately closed. The Treasurer then announced “That concludes our tax lien sale; thank you for attending.” And in much less time than it took me to type this paragraph, the entire proceedings had ended.

So what happened? I believe that none of the ten qualified bidders had any intent on bidding for one or all of the bundles, especially with the minimum bids that were required. Presumably they were there in the event that the bundles would be further broken down into individual properties but that was not the case. As I wrote on Wednesday, the sale of tax liens by municipalities in Massachusetts is a relatively rare event. The reason for that isn’t so much its soundness as a business or financial practice, but because obtaining clear title through a tax sale is a process fraught with legal uncertainty. Although I’m not privy to the city’s rationale in bundling a bunch of properties together, I assume it was to prevent bidders from cherry picking the best of the lot and leaving the city with all the problem cases. By packaging properties together, the buyers, to get the good properties, would also have to take a few of the difficult ones. Whatever the case, it’s my understanding that the city did collect in excess of $500,000 in back taxes as property owners scrambled to get current or at least enter into payment plans. So from that strategic perspective, it was a good move. Undoubtedly there will be more discussion of this at some future city council meeting.

Outside of New England, property tax collection is primarily the domain of county government and so at the registry of deeds we frequently get calls from out-of-staters asking for the date of our next tax lien sale. Aside from a way of raising cash from government, dabbling in tax liens seems to be big business in much of the rest of the country. To such callers we explain two things: (1) property taxes in Massachusetts are handled at the city and town level so call the local tax collector; and (2) the law of property tax liens in Massachusetts and the legal/procedural culture that has grown up around it prefers to allow the lien to remain on the property until some change in circumstances causes it to be paid off.

Tomorrow the city of Lowell will depart from this past practice and hold an auction of tax liens on city property. The sale will take place at 10 am in the city council chambers at Lowell City Hall. Details of the sale are available on the webpage of the city’s Tax Title Division, a site that also includes a complete list of the 350 properties to be sold. According to the city’s procedural explanation, all 350 (or however many remain once some are pulled back from the sale for whatever reason) are to be offered for sale as a single group. If there are no bidders for that or if an insufficient amount is bid, then three separate multi-parcel bundles will be offered for sale. It’s pretty clear that individual properties will not be auction separately.

Because this is such a rare occurrence, here’s my understanding of the legal principles involved. The city has an automatic lien on all real estate for unpaid property taxes. That’s why any time you buy or refinance, the lender requires you to obtain from the city and record at the registry of deeds a “municipal lien certificate” which certifies the amount of any outstanding taxes. (This document is deceptively named because it typically shows no taxes due but years later homeowners become panicky when they see a document with the word “lien” in its title associated with them in the registry of deeds database).

When a property owner falls behind in payment of taxes, the city may “perfect” its lien by recording a document called a “tax taking” which says the property was taken for non-payment of taxes in a particular amount. Even though the word “taking” is liberally used in this document, it really only serves as a tangible lien in the property records (as opposed to the “automatic” one that initially occurs upon non-payment but which is not represented by any particular document placed on record). The reason the “taking” does not literally take the property for the city is that our law is strongly slanted towards (1) getting the taxes paid and (2) allowing the original owner to keep on owning the property. If you recall that much of our property law emerged from medieval England, the idea of the government seizing someone’s private property was repugnant and so many procedural safeguards to prevent abuse were put in place and remain.

Even after one of these “takings” has occurred, the owner of the property (or someone acting in his stead) has the absolute right to “redeem” the property by paying all back taxes and fees. Unless the city files a petition in land court to foreclose this right of redemption – a costly and time-consuming process – no change in ownership of the property will occur. With the statutory rate of interest on unpaid taxes set at 16%, leaving a “tax taking” lien untouched on a property is in some ways the best investment the city can make on its money. By just patiently waiting until the property is sold, renovated, or refinanced – any of which would require the moving party to pay the city in full – the city receives a return of 16% plus expenses.

By selling these tax liens, the city of Lowell will simply be assigning its rights to proceed in the above manner to some third party. I assume the bidders will be fairly large companies that are already in the tax lien business. I’m unsure of their business models but can assume several scenarios: paying a few cents on the dollar now for the right to receive a 16% return later or perhaps aggressively pursuing foreclosure of liens in Land Court (although if any entity follows a timetable of its own setting, it’s Land Court) and then flipping the properties to third party buyers. Whatever the ultimate plans of the bidders, tomorrow’s auction should certainly be an interesting event.

Natasha Young, a post 9/11 local veteran, is organizing a community service project in Lowell that is worthy of everyone’s attention. On Saturday, June 2, 2012 at 9 am, Natasha and a group of volunteers will gather at the Lowell VA Outpatient Clinic at 130 Marshall Road to improve the exterior appearance of the facility. Among the tasks to be accomplished are painting the railings at the entrance of the facility and the planting of trees on the grounds. The purpose of this project is to improve the appearance of the entrance to the facility which will make it more welcoming to those receiving services there.

This project is part of “The Mission Continues” an organization devoted to building stronger communities by inspiring post 9/11 veterans like Natasha
to take on community service projects such as this one. For more information and to get in touch with Natasha, check out her page on The Mission Continues website.

A section of the lower Highlands neighborhood of Lowell was recently designated “Cambodia Town” by the city the significance of which is explained as follows on the city of Lowell website:

The City of Lowell has designated the Cambodia Town area within the Lower Highlands neighborhood in order to elevate interest in the area’s stores and restaurants, attract new businesses, bring in tourists, and increase civic pride. The official designation of Cambodia Town comes after dozens of public meetings and presentations dating back to 2010. The Cambodian Mutual Assistance Association and the Lower Highlands Neighborhood Group played an important role in communicating with residents and generating ongoing interest and participation in the effort to create this designated area.

The preparation for the creation of Cambodia Town involved sign and facade improvements, the installation of “gateway signs,” and renovations and upgrades to Roberto Clemente Park, to include placing Cambodian artwork on the new concession stand and the dedication of the Pai-Lin Volleyball Courts.

Several local elected officials spoke at the ceremony on Sunday, including State Sen. Eileen Donoghue, State Rep. Kevin Murphy, Mayor Patrick Murphy, City Councilor Vesna Nuon, City Councilor Rita Mercier, and City Councilor Marty Lorrey. Along with Long Beach, CA, Lowell is now one of two cities in the United States with a Cambodia Town.

Howl-in-Lowell recently visited Cambodia Town and created the following video which explains the significance of the designation to the neighborhood’s residents.