2015 Unpaid Marina Isle TaxesSTENSTROM, McINTOSH, COLBERT & j
WHIGHAM, P.A.
1001 Heathrow Park Lane
Suite 4001
Lake Mary, Florida 32746
To: Honorable Mayor and City Commissioners
Norton Bonaparte, City Manager
From William L. Colbert, City Attorney
Lonnie N. Groot, Assistant City Attorney
Date: June 5, 2015
Subject: Marina Isle Property; Ad Valorem Taxes Overdue
Ad valorem taxes are delinquent with regard to the City -owned Marina Isle property.
Please see the attached summary prepared by Ms. Pam Strickland, Coordinator of Deeds
and Research, of the Office of the Seminole County Property Appraiser.
The City -owned property has been leased to private properties and the City's rights and
remedies, and the lessee's rights and remedies, are controlled by the provisions of the
lease agreement.
B. Lease Agreement Obligation:
The lease agreement relating to the City -owned property, which was assumed by the
current lessee, requires the City's lessee to pay the annual ad valorem taxes and other
taxes that may be due relative to the City -owned property. Thus, the following analysis
relates to the legal obligation of the lessee vis-a-vis the failure to pay ad valorem taxes
due on the City -owned property.
C. The Overdue Tax Process:
All unpaid real estate taxes become delinquent on April 1 each year with a 3% penalty
added to the taxes. In May of each year the delinquent taxes are advertised in a local
newspaper once a week for 3 consecutive weeks before a tax certificate sale is held
following the payment deadline. The advertising cost and associated tax sale fees are
added to the amount of the tax bill due during this time. On or before June 1, the Tax
Collector is required by law to hold a tax certificate sale, to auction off tax sale certificates.
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A Tax Certificate is a lien on property created by payment of the delinquent taxes due by
the purchaser of the tax certificate. It is not a purchase of property. A tax certificate is an
investment made by the purchaser. The investment does not convey any rights or
ownership to the certificate holder.
Property owners have 2 years to pay delinquent taxes. At that time, Florida law allows a
tax certificate holder to file a tax deed application with the Tax Collector. The tax deed
application is a legal document that initiates the process of the property to being sold at
public auction which is often referred to as a "tax deed sale" which is conducted by the
Clerk and Tax Collector.
The tax deed application is processed with detailed procedure required by Florida law
occurring and the tax deed sale occurs with the highest bidder at the sale being awarded
the property. At the time of application, the tax certificate holder (applicant) pays any other
outstanding taxes as well as a title search fee and a tax deed application fee.
The purchase of the tax certificate provides funds to pay taxing authorities such as the
County, the School District, the City, etc. Absent the purchase of tax certificates, those
entities are deprived of the tax revenues which are due.
The purchase of the tax deed pays back the investment by the purchaser of the tax
certificates and places the property in the hands of a new owner who will, hopefully, pay
taxes when due.
D. Lease Agreement Default/Process:
The failure to timely pay ad valorem taxes due relative to the City -owned property is a
default under the lease agreement. If the City desires to declare a default, it must place
the lessee on notice by issuing a letter to the lessee declaring the default.
The lessee will, then, have the ability to cure the default within 60 days of the date of the
written notice of default. The cure would be, of course, the payment of all taxes due.
If the lessee fails to cure the default within that cure period, the City may proceed to
terminate the lease agreement.
E. Options:
The City Commission may elect to proceed with the steps necessary to declare a default
under the lease agreement or await any potential future matters that may arise as to the
failure to pay ad valorem taxes on the City -owned property such as the commencement
of the tax deed sale process.
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F. Conclusion:
The City Attorney's office stands ready to address any further inquiries relative to this
matter and to take actions relative to implementing the decisions of the City Commission.
It should be noted that a full compliance audit as to the terms and conditions of the lease
agreement has not been accomplished and that this memorandum focuses solely on the
payment of ad valorem taxes relative to the City -owned property.
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