THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, September 18, 1996 TAG: 9609180441
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY BATTINTO BATTS JR., STAFF WRITER
DATELINE: PORTSMOUTH LENGTH: 98 lines
Cornelius Long thought he had a bargain in 1994 when he paid $250 for a parcel of city waterfront property assessed at $11,970 at a state tax auction.
Long planned to develop the land - possibly construct a building on it and rent it to businesses.
But when Long went to see the Carolina Avenue parcel, he found it enclosed by a large chain link fence and being used as an entrance to the Virginia Port Authority.
Long assumed the land had been auctioned because the port authority hadn't paid taxes - not knowing the state-owned entity is tax-exempt.
``I figured this is a billion-dollar industry that doesn't pay its taxes,'' he said. ``I told them to get off my land.''
Since then, Long has been in a struggle with port authority officials over ownership of the property.
Officials with the port authority say they have conducted a title search that determined it owns the property, Portsmouth City Attorney G. Timothy Oksman said.
Port officials have declined comment on the matter. But Oksman says he has reviewed documents from that search and concurs with their assertion.
But William Froelich, the city's tax assessor, says he has researched the property and has been unable to find documentation supporting the port authority's claim to the land.
After two years of battling over the land - and paying the city $40.69 in property taxes every three months - Long wants his money back. He wonders how city property could have been sold to him without the seller being certain who owned it.
``You think you are going to get a decent deal with the city,'' he said. ``The city is not going to cheat you.''
The problem may have been the state's old process of auctioning land to collect delinquent property taxes - called an escheat sale, city and state officials say.
The process was reformed by the 1996 General Assembly to provide more protection to buyers, following a report by a joint subcommittee studying the effectiveness and efficiency of the law.
In the past, while escheat auctions allowed people to purchase land at cheap prices, there was nothing to guarantee that someone else didn't have a rightful claim to the land - either by will, lien or recording error, said Jim Cartier, escheator for Portsmouth.
The state traditionally doesn't conduct title searches on land it auctions, and warns buyers of the potential risks, he said.
Starting July 1, any parcel of land reaching the city's delinquent tax list can no longer be auctioned by the state, Cartier said. Only the city or locality in which the land is located can sell the land. That means a parcel of land with delinquent taxes will be subject to a title search before it is sold, he said.
The state now auctions only land belonging to people who have died and don't have any heirs or land belonging to people who have renounced their rights to it, Cartier said.
Long's experience is an example of how the former process could ensnare someone who didn't understand its potential pitfalls, city and state officials said.
``It is kind of archaic the way the law has been,'' Cartier said. ``Really, the locality should sell the property if the taxes have not been paid.''
A recording glitch may have led to the dispute between Long and the port authority over the property, city officials said.
Records from the port authority's title search show the property was transferred to the city in March 1983 from Provident National Bank, which was the executor of the estate of Helen Waters Gates. So far, the city tax assessor's office has been unable to find record of what happened to the land after that, Froelich said.
The records show the port authority became owner of the land after it was sold to the state from the city in October 1983.
Froelich said the city may have made an error either in recording the transfer of the property to the city or the sale to the state in 1983. And because the port authority is a tax-exempt entity, no property taxes were paid on the property in 10 years. Thus, it may have wrongly ended up on Portsmouth's delinquent property tax list, city officials say. The property was escheated to the state in December 1992, the records show.
Seeking to return the property to the city's tax rolls, Portsmouth's escheator put the land up for auction in August 1994.
Long said he heard about the property and the auction from a friend who works at Portsmouth City Hall.
After tapping his savings, Long purchased the land without paying for a title search - which, according to local real estate lawyers, would have cost between $75 and $100 and might have revealed the problem.
City officials say they are willing to refund Long for the taxes he has paid on the property.
``If it was an erroneous assessment or an erroneous escheatment, that is something that could be remedied,'' Froelich said. ``They can request the refund of taxes that were paid in error to erroneous escheat.'' ILLUSTRATION: Color photo by HUY NGUYEN\The Virginian-Pilot
Since Cornelius Long paid $250 for a piece of Portsmouth waterfront
property at a tax auction, he has found himself caught in a struggle
with the Virginia Port Authority over who really owns it. In fact,
he can't even get to it.
KEYWORDS: PROPERTY DISPUTE VIRGINIA PORT AUTHORITY WATERFRONT
PROPERTY by CNB