An Act to Amend the Process for the Sale of Foreclosed Properties Due to Nonpayment of Taxes
Maine Legislature, Session 131, LD 2262
Committee: Taxation
Amends: 36 MRSA §943-C

Legislative Document
No. 2262
H.P. 1452
House of Representatives, March 12, 2024
An Act to Amend the Process for the Sale of Foreclosed Properties 
Due to Nonpayment of Taxes
Reported by Representative PERRY of Bangor for the Joint Standing Committee on 
Taxation pursuant to Public Law 2023, chapter 358, section 2, subsection 7.
Reference to the Committee on Taxation suggested and ordered printed pursuant to Joint 
Rule 218.
ROBERT B. HUNT
Clerk
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  36 MRSA §943-C, as amended by PL 2023, c. 358, §1, is further amended 
to read:
§943-C.  Sale of foreclosed properties
Notwithstanding any provision of law to the contrary, after the foreclosure process 
under sections 942 and 943 or sections 1281 and 1282 is completed and the right of 
redemption has expired, if a municipality chooses to sell to someone other than the former 
owner, the municipal officers or their designee shall notify the former owner of the right to 
require the municipality to use the sale process under subsection 3.  For the purpose of this 
section, "former owner" means the owner or owners of record at the time of foreclosure or, 
if deceased, the former owner's heirs, devisees or personal representatives.  The notice must 
be sent by United States Postal Service certified mail, return receipt requested, and first-
class mail to the last known address of the former owner and "tax-acquired property" means 
real property taken by a municipality for nonpayment of property taxes.  If the municipality 
agrees to sell the property back to the former owner, the alternative sale process under this 
section does not apply.  If the sale to the former owner is not completed, the requirements 
of this section are reinstated.
1-A.  Subject property.  This section governs the sale of all tax-acquired property 
through the tax lien mortgage foreclosure process under sections 942 and 943 or sections 
1281 and 1282.
2.  Notification; appeal.  At least 90 days prior to listing property for sale, the 
municipal officers or their designee shall send a written notice to the last known address of 
the former owner, by United States Postal Service certified mail, return receipt requested, 
and first-class mail, of the right to require the sale process described in subsection 3.  The 
State Tax Assessor shall prepare application forms, notices and instructions that must be 
used by municipalities to inform former owners of their right to apply for the sale process 
provided under subsection 3.
3.  Sale process requirements.  If the former owner submits a written demand within 
days after the notification in subsection 2 that the sale process of this subsection be used 
When selling a tax-acquired property, the municipal officers or their designee shall:
A.  List the property for sale with a real estate broker licensed under Title 32, chapter 
who does not hold an elected or appointed office in the municipality and is not 
employed by the municipality;
B.  Sell Convey the property via quitclaim deed to the successful buyer at the highest 
reasonable price at which the property is able to sell, or the price at which the property 
is anticipated by the real estate broker to sell within 6 months after listing; and
C.  Pay to the former owner any sale proceeds in excess of:
(1)  The sum of all taxes owed on the property;
(2)  Property The sum of all taxes that would have been assessed on the property 
during the period following foreclosure when the property is owned by the 
municipality;
(3)  All accrued interest;
(4)  Fees, including advertising, mailing and recording fees and property listing 
and real estate broker's fees;
(5)  Any other expenses incurred by the municipality in selling, or maintaining or 
improving the property, including, but not limited to, an administrative fee equal 
to 10% of the property taxes owed and reasonable attorney's fees;
(6)  The cost to the municipality of the lien and foreclosure process, including, but 
not limited to, reasonable attorney's fees; and
(7)  Unpaid sewer, water or other utility charges and fees imposed by the 
municipality.
If the municipal officers are unable to list or sell the property under the requirements of 
paragraphs A and B, or if the property tax payer does not request that the property be sold 
according to the sale process in this subsection, the municipal officers may sell the property 
in any manner authorized by the municipality's legislative body, if the municipal officers 
pay the former owner any excess sale proceeds as calculated in paragraph C.
4-A.  Effect of inability to contract or sell property.  If, after 3 attempts, a 
municipality is unable to contract with a real estate broker for the sale of the property as 
described in subsection 3 or the broker is unable to sell the property within 6 months after 
listing, the municipal officers may sell the property in any manner authorized by the 
municipality's legislative body, as long as the municipality pays the former owner any 
excess sale proceeds as calculated in subsection 3, paragraph C.
5.  Property in the unorganized territory.  With regard to the sale of property 
acquired by the State through tax lien foreclosure in the unorganized territory, the State 
Tax Assessor has the obligations of a municipality under this section.
6.  Quitclaim deed and waiver Waiver of former owner.  As a condition of 
disbursement of excess sale proceeds to the former owner under subsection 3, paragraph 
C, the municipal officers may require the former owner to execute a quitclaim deed without 
covenant conveying any interest of the former owner in the property to the municipality 
and to deliver that deed before conveyance by the municipality to the buyer.  Receipt of 
such excess sale proceeds by the former owner pursuant to this section is deemed to be a 
waiver of any right of the former owner to commence any action pursuant to section 946-B.  
Failure of a municipality to file the notice required by subsection 11 does not nullify or 
otherwise affect the validity of the waiver under this subsection.
7.  Retention of tax-acquired property.  If a municipality chooses to retain a tax-
acquired property for municipal use, the municipality must procure an appraisal report from 
an appraiser licensed to provide real estate appraisals in this State showing the value of the 
tax-acquired property being retained.  The appraiser may not hold an elected or appointed 
office in the municipality or be otherwise employed by the municipality.  The municipal 
officers, after providing the notice required by subsection 8, shall pay the former owner 
any excess sale proceeds as calculated in subsection 3, paragraph C, substituting the value 
of the tax-acquired property as shown in the appraisal report for the selling price of the tax-
acquired property.
8.  Notice of intent to pay excess sale proceeds.  If after the sale of a tax-acquired 
property there exist any excess sale proceeds as described in subsection 3, paragraph C, at 
least 30 days prior to disbursement of those excess sale proceeds to the former owner the 
municipal officers shall send written notice of the municipality’s intent to pay the former 
owner the excess sale proceeds.  The notice must be sent by certified mail, return receipt 
requested, to the last known address of the former owner and the last known address of 
each record holder of an interest in the tax-acquired property.  This notice does not limit 
the right of lienholders to pursue any claims to the excess sale proceeds against the former 
owner otherwise available by law.
9.  Notice by publication.  If the municipality is unable, after reasonable diligence, to 
locate the former owner of a tax-acquired property in order to send the notice required in 
subsection 8, the municipality, once a week for 3 consecutive weeks, shall place a notice 
in a newspaper of general circulation in the county in which the tax-acquired property is 
located.  The notice must include the name of the former owner, a description of the 
tax-acquired property that was sold, the amount of the excess sale proceeds and the date by 
which the excess sale proceeds must be claimed.
10.  Retention of proceeds.  If, after provision of notice under subsection 9, a former 
owner fails to claim the excess proceeds within 30 days of the final published notice, the 
former owner’s rights to the excess sale proceeds are forfeited and the municipality may 
retain and expend the proceeds in whatever manner the legislative body of the municipality 
considers appropriate, as long as the municipality has given notice to each record holder of 
an interest in the tax-acquired property pursuant to subsection 8.
11.  Notice of payment of proceeds.  A municipality, within 10 days of payment of 
any excess sale proceeds to the former owner under this section, shall record in the registry 
of deeds of the county or registry district where the tax-acquired property is located a notice 
signed by the municipal officers.  The notice must include the name of the former owner 
to whom the excess sale proceeds were paid, the amount of the excess sale proceeds, the 
date on which the excess sale proceeds were paid to the former owner, a description of the 
tax-acquired property that was sold and a statement that receipt of the excess sale proceeds 
by the former owner is deemed to be a waiver of the former owner's right to commence any 
action pursuant to section 946-B.
The State Tax Assessor shall prescribe the form of the notice to be used by municipalities 
under this subsection.
SUMMARY
This bill is reported out by the Joint Standing Committee on Taxation.  It is the 
recommendation of the Working Group to Study Equity in the Property Tax Foreclosure 
Process pursuant to Public Law 2023, chapter 358.
This bill amends the process following the foreclosure on a property by a municipality 
for failure to pay property taxes and the return of excess funds by:
1.  Requiring a municipality to make 3 attempts to contract with a real estate broker for 
the sale of the property;
2.  Requiring that a real estate broker attempt to sell the property for 6 months before 
the municipality can sell the property in a manner authorized by the municipality's 
legislative body;
3.  Eliminating the requirement that the former owner submit a written demand for the 
return of the excess funds; 
4.  Allowing a municipality to deduct from the proceeds of the sale, in addition to the 
other costs authorized under current law, fees incurred for advertising, mailing and 
recording related to the property and expenses incurred in improving the property;
5.  Requiring a municipality, at least 30 days prior to the disbursement of excess 
proceeds to the former owner, to provide notice of such intent to the former owner and each 
record holder of an interest in the property.  The notice must be made by certified mail, 
return receipt requested;
6.  Requiring the municipality, if it is unable to locate the former owner, to have 
published in a newspaper of general circulation in the county in which the property is 
located, a notice specifying the former owner, a description of the property sold, the amount 
of the excess proceeds and the date by which the proceeds must be claimed; and
7.  Requiring the municipality, within 10 days of paying the excess proceeds to the 
former owner, to record in the registry of deeds a notice indicating the payment of the 
excess proceeds, to whom the payment was made, the date of the payment, a description of 
the property sold and a statement that the former owner waived, by accepting the excess 
proceeds, the right to commence an action to dispute the taking of the property.