An Act To Protect the Elderly from Tax Lien Foreclosures
Maine Legislature, Session 128, LD 1629
Committee: Taxation
Sponsors: ESPLING
Amends: 36 MRSA §943

Legislative Document
No. 1629
H.P. 1124
House of Representatives, June 5, 2017
An Act To Protect the Elderly from Tax Lien Foreclosures
Reference to the Committee on Taxation suggested and ordered printed.
ROBERT B. HUNT
Clerk
Presented by Representative ESPLING of New Gloucester.  (GOVERNOR'S BILL)
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  36 MRSA §943, as amended by PL 2011, c. 104, §1, is repealed and the 
following enacted in its place: 
§943.  Tax lien mortgage; redemption; discharge; foreclosure 
1.  Tax lien mortgage.  The filing of the tax lien certificate in the registry of deeds 
creates a tax lien mortgage on that real estate to the municipality in which the real estate 
is situated having priority over all other mortgages, liens, attachments and encumbrances 
of any nature and gives to that municipality all the rights usually incident to a mortgagee, 
except that the municipality does not have any right of possession of that real estate until 
the right of redemption has expired. 
The filing of the tax lien certificate in the registry of deeds is sufficient notice of the 
existence of the tax lien mortgage. 
In the event that the tax, interest and costs underlying the tax lien are paid within the 
period of redemption, the municipal treasurer or assignee of record shall prepare and 
record a discharge of the tax lien mortgage in the same manner as is provided for the 
discharge of real estate mortgages, except that a facsimile signature of the treasurer or 
treasurer's assignee may be used. 
If the tax lien mortgage, together with interest and costs, is not paid within 18 months 
after the date of the filing of the tax lien certificate in the registry of deeds, the tax lien 
mortgage is deemed to have been foreclosed and the right of redemption to have expired. 
2.  Additional notice prior to foreclosure.  The municipal treasurer shall notify the 
party named on the tax lien mortgage and each record holder of a mortgage on the real 
estate not more than 45 days nor less than 30 days before the foreclosing date of the tax 
lien mortgage, in a writing signed by the treasurer or bearing the treasurer's facsimile 
signature and left at the holder's last and usual place of abode or sent by certified mail, 
return receipt requested, to the holder's last known address of the impending automatic 
foreclosure and indicating the exact date of foreclosure.  For sending this notice, the 
municipality is entitled to receive $3 plus all certified mail, return receipt requested, fees.  
These costs must be added to and become a part of the tax.  If notice is not given in the 
time period specified in this subsection to the party named on the tax lien mortgage or to 
any record holder of a mortgage, the person not receiving timely notice may redeem the 
tax lien mortgage until 30 days after the treasurer does provide notice in the manner 
specified in this section. 
The notice of impending automatic foreclosure must be substantially in the following 
form:  
NOTICE OF IMPENDING AUTOMATIC FORECLOSURE 
Title 36, M.R.S.A. Section 943 
IMPORTANT: DO NOT DISREGARD 
THIS NOTICE. YOU WILL LOSE 
YOUR PROPERTY UNLESS YOU PAY 
YOUR 20   PROPERTY TAXES, 
INTEREST AND COSTS. 
TO: 
You are the party named on a tax lien certificate filed on           , 20  , and recorded in 
Book       , Page        in the County Registry of Deeds. This filing has created a tax lien 
mortgage on the real estate described therein. 
On           , 20  , the tax lien mortgage will be foreclosed and your right to recover your 
property by paying the taxes, interest and costs that are owed will expire. 
IF THE TAX LIEN FORECLOSES, 
THE MUNICIPALITY WILL OWN 
YOUR PROPERTY. 
If you cannot pay the property taxes you owe please contact me to discuss this notice. 
Municipal Treasurer 
After the expiration of the 18-month period for redemption, the mortgagee of record of 
the real estate or the mortgagee's assignee and the owner of record if the real estate has 
not been assessed to the owner of record or the person claiming under the owner of 
record, in the event the notice provided for the mortgagee and owner has not been given 
as provided in section 942, have the right to redeem the real estate within 3 months after 
receiving actual knowledge of the recording of the tax lien certificate by payment or 
tender of the amount of the tax lien mortgage, together with interest and costs, and the tax 
lien mortgage is then discharged by the municipality in the manner provided. 
The tax lien mortgage is prima facie evidence in all courts in all proceedings by and 
against the municipality and its successors and assigns, of the truth of the statements in 
the tax lien mortgage and, after the period of redemption has expired, of the title of the 
municipality to the real estate described in the tax lien mortgage and of the regularity and 
validity of all proceedings with reference to the acquisition of title by the tax lien 
mortgage and the foreclosure. 
Whenever the person against whom the tax is assessed has died after the tax has been 
committed and prior to the expiration of the 18-month period of foreclosure and that 
person has left a will offered for probate, the probate judge of the county in which that 
will is offered upon petition of any devisee of the real estate on which the tax is unpaid 
may grant a period of redemption not to exceed 60 days following the final allowance or 
disallowance of that will. Notice of the petition must be given to the tax collector of the 
municipality in which the property is located, and a certified copy of the court order must 
be filed in the registry of deeds of the county in which the property is located. 
3.  Preforeclosure process.  Notwithstanding any provision of subsection 1 or 2 to 
the contrary, the preforeclosure process described in this subsection applies only to 
owners 65 years of age or older.  After filing the tax lien mortgage and at least 90 days 
before the right of redemption expires, the municipality shall proceed as follows. 
A.  The municipality shall contact the owner and, with the owner's consent, assist the 
owner in applying for a tax abatement pursuant to section 841. The municipality shall 
make a good faith evaluation of the owner's eligibility for a tax abatement. If the 
owner is found eligible for a full abatement of the tax, the municipality shall 
discharge its lien. The municipality shall inform the owner of the option of seeking a 
reverse mortgage. 
B.  If pursuant to paragraph A a partial abatement is granted or if the owner is found 
not eligible for an abatement, the municipality must offer the owner a reasonable 
repayment schedule. If the owner does not agree to the repayment schedule, the 
municipality must offer to engage in mediation with the goal of producing a mutually 
acceptable schedule. The municipality shall select the mediator and pay the 
mediator's fee, and one-half of the cost must be added to the amount owed by the 
owner. The mediator must be impartial and listed with the judicial branch. If 
mediation is successful, the right of redemption does not expire as long as the owner 
makes payments according to the mediation schedule. 
If a scheduled payment becomes delinquent more than 18 months after the tax 
commitment date and remains delinquent for more than 30 days, the municipality 
shall send a notice of delinquency to the owner by certified mail, return receipt 
requested, that includes a statement that payment of the full balance owed must be 
made within 14 days of receiving the notice of delinquency or the right of redemption 
will expire. If payment is not made by the 15th day, the right of redemption expires.  
The municipality shall confirm the date of expiration by filing a notice of the 
expiration date in the registry of deeds where the lien was filed. A copy of the notice 
must be given to the owner in hand or by certified mail, return receipt requested.  
C.  If at any time a municipal official or employee has a reasonable suspicion that the 
owner has a physical or mental condition that interferes with the owner's ability to 
have business dealings with the municipality or that the owner is a victim of abuse, 
neglect, including self-neglect and neglect by another, or exploitation, the 
municipality shall notify the Department of Health and Human Services, office of 
elder and adult services, adult protective services program. The department shall 
determine whether the owner is in need of protective services or refer the owner to 
other community services that can assist the owner with the process described in this 
section.  
4.  Foreclosure and sale.  After the foreclosure process is completed and the right of 
redemption has expired, any sale of the property by the municipality must proceed as 
follows. 
A.  If an owner is 65 years of age or older and is living in the property and the 
property is the owner's sole residence, the municipality may not take any action to 
sell the property to a 3rd party until the value of the municipal lien for nonpayment of 
taxes established by this chapter exceeds 50% of the municipal assessed value of the 
property. 
B.  The owner may purchase the property at any time before the property is sold or 
may purchase it after the sale from the 3rd party if allowed by municipal ordinance or 
other law for the amount of taxes owed plus interest, fees or other charges allowed by 
law.  If a municipality conveys the premises back to the former record titleholder or 
to a successor of that holder who obtained title before the foreclosure for a 
consideration of the taxes and costs due, the rights of the other parties claiming an 
interest of record in the premises at the time of foreclosure, including mortgagees, 
lien creditors or other secured parties, are revived as if the tax lien mortgage had not 
been foreclosed. 
C.  The sale of the property by the municipality, other than to the owner whose 
property has been the subject of foreclosure pursuant to this section, must be 
conducted in a commercially reasonable manner. The property must be listed for sale 
and sold by an independent licensed broker.  The property may not be sold for less 
than its municipal assessed value absent an appraisal conducted by a licensed 
appraiser that demonstrates that the fair market value of the property has deteriorated 
since the most recent tax assessment by the municipality, after which the property 
may be sold for the newly appraised value. 
D.  The municipality or any purchaser of the property from the municipality may not 
take any action to remove the former owner from the property until after a sale 
contemplated by this section is completed and any right that the former owner may 
have to repurchase the property by municipal ordinance or other law has expired. 
E.  Any proceeds received from the sale of the property in excess of the tax owed, 
interest and allowable fees, including any real estate broker fee or fees paid for 
mediation services, must be refunded to the former owner.  
5.  Discharge of lien.  A discharge of a municipal tax lien mortgage given after the 
right of redemption has expired, if the discharge has been recorded in the registry of 
deeds for more than one year, terminates all title of the municipality derived from that tax 
lien mortgage or any other recorded tax lien mortgage for which the right of redemption 
expired 10 years or more prior to the foreclosure date of this discharged lien, unless the 
municipality has conveyed any interest based upon the title acquired from any of the 
affected liens. This subsection applies to discharges of municipal tax lien mortgages 
given after October 1, 1935.  
SUMMARY 
This bill creates a preforeclosure process that municipalities must follow in order to 
successfully foreclose a tax lien on property of a homeowner 65 years of age or older. 
The preforeclosure process includes active municipal assistance with an abatement 
application and mediation if necessary to create a reasonable tax payment plan. This bill 
also creates additional provisions concerning the sale of foreclosed property for all 
homeowners including allowing a homeowner to pay the tax lien with interest and costs 
before a tax sale; allowing a homeowner to remain in the home until the sale is 
completed; requiring the use of a real estate broker when the property is sold; and 
requiring the return to the homeowner of any net proceeds from the sale after adjustment 
for taxes owed, interest, fees and other allowable costs.