Opinion ID: 1268564
Heading Depth: 1
Heading Rank: 3

Heading: Tax Sale

Text: Petitioners argue that the Court of Appeals erred in finding the tax sale of the LadyHawk void under S.C.Code Ann. § 12-51-40 (Supp.1994). The Court of Appeals found the following three errors in the tax sale: (1) the levy notice included an artificial deadline for payment; (2) the notices should have been mailed restricted delivery; and (3) the LadyHawk was not described sufficiently in the published tax sale advertisement.
South Carolina Code Ann. § 12-51-40 controls the procedure for notifying delinquent taxpayers that property will be sold in order to collect delinquent taxes. This Court has held that [t]ax sales must be conducted in strict compliance with statutory requirements. Ryan Inv. Co. v. Richland County, 335 S.C. 392, 394, 517 S.E.2d 692, 693 (1999) (citing Dibble v. Bryant, 274 S.C. 481, 265 S.E.2d 673 (1980)). Further, the fact that the defaulting taxpayer has actual notice of the impending tax sale is insufficient to uphold a tax sale absent strict compliance with statutory requirements. Ryan, 335 S.C. at 394, 517 S.E.2d at 693 (emphasis added). [5] Finally, failure to give the required notice of a tax sale is a fundamental defect in the tax sale proceedings that renders the proceedings absolutely void. Rives v. Bulsa, 325 S.C. 287, 478 S.E.2d 878 (Ct.App.1996). South Carolina Code Ann. § 12-51-40(a) requires the county treasurer to mail a notice as close to April 1st as possible, specifying that if the taxes, penalties, assessments, and costs are not paid, the property must be advertised and sold to satisfy the delinquency. If the taxes remain unpaid thirty days after the mailing of the April 1 notice, the treasurer is entitled to take exclusive possession of as much of the defaulting taxpayer's property as is necessary to satisfy the payment of taxes, assessments, penalties, and costs. S.C.Code Ann. § 12-51-40(b). For personal property, this section provides that exclusive possession is taken by mailing the notice of delinquent taxes to the address shown on the tax receipt. The statute mandates that all delinquent notices shall specify that if the taxes, assessments, penalties, and costs are not paid on or before a subsequent sales date, the property must be duly advertised and sold for delinquent property taxes, assessments, penalties, and costs. S.C.Code Ann. § 12-51-40(b) (emphasis added). The first notice received by Hawkins in August showed the amount due and was stamped with the following statement: IF NOT PAID ON OR BEFORE 31 AUGUST THIS PROPERTY WILL BE DULY ADVERTISED AND SOLD FOR DELINQUENT TAXES AS DESCRIBED ABOVE ON THE FIRST MONDAY IN OCTOBER THIS YEAR. RETURN OF THIS CERTIFIED RECEIPT SHALL BE DEEMED EQUIVALENT TO LEVYING BY DISTRESS. The second notice, dated August 24, was accompanied by a letter from the County Treasurer, Joy Logan. The letter reiterated that the taxes were delinquent, and that the property was subject to sale at the October 2, 1995, tax sale, but stated [a]ll tax payments must be received by September 15, 1995 to avoid your name and property being advertised in The Beaufort Gazette and The Island Packet. The Court of Appeals held that these two notices created artificial deadlines for payment before the sales date, and thereby contradicted the statutory language requiring that the notice inform the delinquent taxpayer that the taxes must be paid before a subsequent sales date. Because the sales date in this instance was October 2, the Court of Appeals found that the August 31 and September 15 deadlines were artificial, and gave the impression that Hawkins had to pay the taxes weeks before the date of sale. We agree with the Court of Appeals' holding on this issue. The County argues that this reading of section 12-51-40(b) conflicts with the advertising requirements of section 12-51-40(d). We disagree. Section 12-51-40(d) explains how the property must be advertised before auction, and requires that the advertising be published once a week for two consecutive weeks prior to the sale. The County's argument depends on their interpretation of section b that a specified date must pass without payment before the County's authority to advertise is triggered. At trial, however, the Deputy Treasurer, Evans, testified that Hawkins could have paid the delinquent taxes up until the date of the October 2 tax sale, beyond the August 31 and September 15 deadlines set in the two notices. Although we realize the County would rather not advertise until it knows the taxpayer can no longer pay the delinquent taxes, the statute does not provide that the County set a date, other than the sales date, after which the taxpayer can no longer pay his delinquent taxes before the County can begin advertising. Based on the standing rule that the County must conduct tax sales in strict compliance with the statutory requirements, we find that the levy notice was not properly worded, and set aside the tax sale on that basis. Ryan; Dibble.
Petitioners argue that the Court of Appeals erred in finding that a levy notice for a delinquent personal property tax sale must be sent via restricted delivery mail in order to be valid. We agree. Section 12-51-40(b) provides the relevant language to resolve this issue. As discussed, this section provides that the treasurer take exclusive possession of property by sending a notice to the taxpayer. Specifically, it states, [i]n the case of real property, exclusive possession is taken by mailing a notice of delinquent property taxes, assessments, penalties, and costs to the defaulting taxpayer at the address shown on the tax receipt or to a more correct address known to the officer, by certified mail, return receipt requesteddeliver to addressee only. In the case of personal property, exclusive possession is taken by mailing the notice of delinquent property taxes, assessments, penalties, and costs to the address shown on the tax receipt or to a more correct address known to the officer.... The return receipt of the certified mail notice is equivalent to levying by distress. S.C.Code Ann. § 12-51-40(b). The Court of Appeals found that the certified mail and restricted delivery requirements listed for real property also applied to personal property based on the last sentence of section 12-51-40(b): The return receipt of the `certified mail' notice is equivalent to `levying by distress.' The Court of Appeals also relied on language in S.C.Code section 12-51-40(c) that refers to the procedure for taking possession of real and personal property when the certified mail notice has been returned to find that the legislature intended for the certified mail and restricted delivery requirements for real property in section 12-51-40(b) to also apply to personal property. Although we agree that the legislature intended the certified mail requirements to apply to both real and personal property, prior versions of the statute convince us that the legislature did not intend to require notices on personal property to be mailed restricted delivery. See S.C.Code Ann. § 12-51-40(a) (1976); Act No. 378 at § 4, 1971 S.C. Acts 500. [6] Although there is no specific mailing requirement for personal property in the statute, it appears that levy notices on personal property must be sent via certified mail, return receipt requested in order to accomplish levy by distress. The cardinal rule of statutory construction is to ascertain and effectuate the intent of the legislature. Charleston County Sch. Dist. v. State Budget & Control Bd., 313 S.C. 1, 437 S.E.2d 6 (1993). In our opinion, the legislature intended to be able to levy by distress on personal property as well as real property, and to do so requires that the notice be mailed by certified mail, return receipt requested. It is not necessary, however, that the notice be sent restricted delivery in order for the County to levy by distress under the terms the statute. There is no mention of restricted delivery anywhere in the statute with regard to personal property, and we do not believe the legislature intended that delinquent tax notices for personal property must be sent restricted delivery. Based on the 1976 version of the statute, it appears instead that the legislature intended to relax the notice requirements for personal property by amending the statute to require restricted delivery for real property only.
Petitioners argue that the Court of Appeals erred in finding that the advertisement of the LadyHawk was insufficient under S.C.Code Ann. § 12-51-40(d) (Supp.1994). We agree. [A]ll requirements of law leading up to tax sales which are intended for the protection of the tax payer [sic] against surprise or the sacrifice of his property are to be regarded as mandatory and are strictly enforced. Rives v. Bulsa, 325 S.C. 287, 292-93, 478 S.E.2d 878, 881 (Ct.App.1996) (citing Dibble, 274 S.C. 481, 265 S.E.2d 673). South Carolina Code section 12-51-40(d) explains the procedure for advertising which the County is required to follow before selling the delinquent taxpayer's property. It provides, in relevant part, The property must be advertised for sale at public auction. The advertisement must be in a newspaper of general circulation ... and must be entitled Delinquent Tax Sale. It shall include the delinquent taxpayer's name and the description of the property, a reference to the county auditor's map-block-parcel number being sufficient for a description of realty. S.C.Code Ann. § 12-51-40(d) (emphasis added). In this case, the County advertised the sale of the LadyHawk in the Beaufort Gazette, and included Hawkins's name and the delinquent tax number PP550HAWALL. Before listing the personal and real property, the advertisement indicated that the accounts beginning in PP referred to boats. The Court of Appeals relied on the definition of description in Black's Law Dictionary to find this description of the LadyHawk insufficient. A `description' is defined as `[a] delineation or account of a particular subject by the recital of its characteristic accidents and qualities.' Hawkins, 342 S.C. at 364, 536 S.E.2d at 704 (citing Black's Law Dictionary 445 (6th ed.1990)). The Court of Appeals reasoned that the description given by the County did not meet this definition, and further, that the description was intended to protect the taxpayer from unfair surprise and sacrifice, and as such, should have included the characteristics of the boat, such as its size. Id. In our opinion, the Court of Appeals' analysis fails to explain why the listing of the taxpayer's name and tax account number, which was listed on the notices of delinquent taxes that Hawkins admitted receiving, is insufficient to alert him to the sale of the LadyHawk. Also, the Court of Appeals fails to account for the reason such a description is sufficient for real property, but is insufficient for personal property when interested persons can discover the details of both types of property by using the tax account number to look up further information in the county tax assessor's office. See S.C.Code Ann. § 12-51-40(d). In fact, Frank Bruno, owner of BYS, was able to discover the specific characteristics of the LadyHawk prior to the sale by entering the tax account number in the County's computer system. We see no reason why the County should have to use a different method of describing personal property than the method the statute explicitly defines as sufficient for real property when it affords the taxpayer and potential buyer with an opportunity to look up further information. Therefore, we find that the description of the LadyHawk in the tax sale advertisement was sufficient under S.C.Code Ann. § 12-51-40(d).