If Notice of Impending Tax Deed Fails, Municipalities Must Take Additional Reasonable Steps to Notify Owner Before Deeding Property

Towns and cities have known (and municipal attorneys have been advising) since the 2006 U.S. Supreme Court opinion in Jones v. Flowers that, when mailed notice of an impending tax deed is returned unclaimed, the municipality must take “additional reasonable steps” to attempt to provide notice to the property owner before liening or deeding the property, if it is practicable to do so. 547 U.S. 220, 225 (2006). This new opinion provides municipalities with some additional guidance on how to approach notices of tax liens and tax deeds.

The plaintiff informed the Town that she traveled out of the country frequently and provided them with her email address. The Town also had a variety of other contact information: (1) a Manchester address for one of two people the plaintiff had authorized to act on the trust’s behalf with respect to property taxes, (2) a California mailing address, and (3) a Maine mailing address the plaintiff provided.

The case involves property tax notices and other communications between 2016 – 2022, a time period when the property was unoccupied. Specifically, the plaintiff claimed that the Town provided insufficient notice of the impending tax liens for the 2016 and 2018 taxes and the impending tax deed related to the 2016 taxes.

• The certified notice of impending lien for the 2016 taxes was sent in 2017 to the California address and was undelivered. (All prior notices to this address had failed.)
• The Town had an email exchange with the plaintiff during this time about overdue taxes from 2013 – 2016; the plaintiff ultimately chose at that time only to pay the 2013-2015 taxes.
• The certified notice of impending lien for the 2018 taxes was sent in 2019 to the agent’s address and the Maine address, both of which came back as undeliverable.
• Three days after mailing those notices, the Town also sent the certified notice of impending tax deed for the 2016 taxes to the same two addresses; both came back as undeliverable.
• The Town took the property by tax deed later in 2019. A week later, the tax collector sent notice of the taking by regular mail to the same two addresses. The notice explained that the plaintiff could repurchase it at any time through April 18, 2022.
• Ten days before the end of the plaintiff’s three-year repurchase right, and after confirming the proper mailing address with the plaintiff via email, the Town sent additional notices via certified mail that the taking had occurred to the agent’s address and the Maine address. The agent signed for his copy.
• Ultimately, the Town sold the property to a third party, rejecting an offer in 2024 from the plaintiff to repurchase it.

Although New Hampshire statutes do not impose any specific obligation on a municipality to take additional steps when notice of an impending tax lien or tax deed is not delivered, the US Supreme Court has imposed this obligation on all governmental entities under the 14th Amendment to the US Constitution. Even if the initial notice is “reasonably calculated to reach the intended recipient when sent,” the government must take supplemental measures before taking property if it “becomes aware prior to the taking that its attempt at notice has failed.” Jones v. Flowers, 547 U.S. 220, 226 (2006) (quoted in this new opinion).

In its opinion, the NH Supreme Court drew a distinction between a notice of impending tax deed (which, when it occurs, will take ownership of the property away from the owner) and a notice of impending tax lien (something which does not divest the owner of title to their property).

Notice of Impending Tax Deed: The Court held that the Town’ violated the plaintiff’s due process rights when it failed to take any additional steps to provide the plaintiff with notice before the property was taken once it knew the original notice had failed. Notifying the owner of the tax deed after the fact does not satisfy the due process requirement to provide adequate notice before property is taken by tax deed. “Before forcing a citizen to satisfy his debt by forfeiting his property, due process requires the government to provide adequate notice of the impending taking.” Jones at 234. In addition, the Town’s email exchange with the plaintiff in 2017 which included a warning from the tax collector that the plaintiff should “make payment as soon as possible to avoid the town pursuing a tax deed” did not take the place of the required notice, in 2019, with concrete terms about the impending deed and how to avoid it. Ultimately, the Court did not clarify which specific additional steps were required, but the failure to take any steps at all was unacceptable.

Notice of Impending Tax Lien: Because a tax lien does not take ownership away from the taxpayer, the Court looked only at whether the notice that was sent was “reasonably calculated, under all the circumstances” to provide notice to the plaintiff, and did not find that the Town had an obligation to take additional steps after it knew notice had failed. With respect to the 2016 tax lien, the Town sent notice only to the California address despite the fact that delivery of all the Town’s prior notices to this address had failed. The fact that the Town had tried twice to obtain a more reliable address from the plaintiff did not satisfy its obligation, particularly because the Town also had the plaintiff’s email address and two other mailing addresses it could have used (but chose not to). On the other hand, the Court found that the Town had satisfied its obligation with respect to notice of the 2018 tax lien. The notice was sent to both the agent’s address and the Maine address. While both notices failed, the Plaintiff had recently specifically asked the Town to use the Maine address and at least some of the prior notices sent to the agent’s address had been successfully delivered. This made it reasonable to believe that sending those notices might have worked. Holding that the Town wasn’t required in that case to try to contact the plaintiff by email, the Court also noted that the failure of notice in a specific case doesn’t necessarily mean it was inadequate.

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