LAURINBURG – Ninety-year-old Dannie Kelly believes that the county government is trying to take away something that God gave him.
The World War II veteran is facing tax foreclosure on his small brick home and plot of land on Harris Road in the Harris Town Community located in the northern edge of the county. Kelly owes taxes for the years since he brought the property in 2009, but also owes outstanding taxes accrued by the previous owner.
“I believe God led me to this place. I never knew Harris Road existed,” said Kelly, a retired minister. “If they take it, there’s nothing I can do, but I can’t understand why I have to pay back taxes for someone else. If someone can find it in the Bible, tell me where. I live by the Bible. God don’t hold me responsible for somebody else’s sins, so why have I got to pay somebody else’s bill?”
Kelly, is a widower and lives alone. He is a native of Moore County who spent the years after he retired from the military doing home remodeling and construction work. He retired from that in 1970 after he had six heart attacks the previous year. He was also a minister at Temple Baptist Church in Aberdeen.
Kelly receives $843 a month in Social Security/Disability and collects cardboard to sell in order to supplement that meager income.
He has reached out to his children who live in the northern part of the country for help, but they are not able to offer any assistance.
Kelly is facing this issue because he bought real estate without knowing that there were past due taxes on it. The previous owner had not paid taxes since 2002. There was a $3,400 bill outstanding. With taxes and penalties, he currently owes just over $7,000.
The law states that anyone who purchases property also purchases any outstanding taxes on it.
“The state levies taxes on real estate and they are attached to the property, so they don’t go with the person, they stay with the property. So if you purchase it, you purchase the taxes,” said Gail Bullard of Graham and Grubbs Realty.
The county began foreclosure proceedings in July of 2011, one year after Kelly bought the place, but he was not notified then, according to his attorney, Mike Schmidt.
“They filed the complaint in 2011. Kelly had just bought it in July 2010, but they didn’t get service on him then. He didn’t get served until June 2015 and again on July 2016,” Schmidt said.
Kelly had been paying the taxes since he took ownership in 2009, but he encountered another complication. The county’s payment system is set up so that if past due taxes are owed, any money paid on the bill is applied to the most outstanding date. The payments the veteran was making were applied to the 2002 bill, well before he took ownership.
“I was paying what I thought was my taxes. When I found out there was taxes owed, I went and talked to the lady,” Kelly said. “She said I have to catch up on the back taxes owed on it. I quit paying because there was no way I could pay off thousands of dollars.”
Schmidt is representing Kelly in the foreclosure proceedings. The attorney lists three reasons that Kelly should be given leniency.
“He has been denied his homestead exemption by not receiving proper notice in an equitable way; when he goes in and they see him and he’s paying there’s no notice. He’s not received anyone ever telling him ever that he was eligible for the homestead exemption,” Schmidt said. “The other is the unfair and improper valuation, unfair taxation in violation of chapter 105-284, school tax has ripened into a violation of the North Carolina constitution.”
Schmidt filed for a homestead exemption on behalf of Kelly in December. The exemption gives low income and elderly a tax exemption on the first $25,000 of their property value.
The lawyer says Kelly and so many other elderly or indigent people have not filed for the exemption because they do not receive proper notice that the exclusion is available to them. The paperwork to file is on a table away from the door in the tax office, and there was not proper notice at the front desk.
“Nobody told me about that. Mr. Schmidt was the first person that told me about an exemption,” Kelly said.
Another problem Kelly faces is that the application for exemption was filed well past the June deadline, leaving Schmidt to appeal to the Board of Commissioners to grant the immunity at its meeting this week.
Schmidt also believes the county unfairly assesses property tax values. Kelly’s property is valued at $19,600. Schmidt said the property would not bring even half of that if sold.
The county board debated the issue, but officials were reluctant to grant Kelly the exemption due to the outstanding taxes and the foreclosure proceedings.
Only Commissioner Clarence McPhatter moved immediately to grant the application for exemption once Kelly’s case was introduced.
“I understand that Mr. Kelly is an elderly guy, and I don’t see why we shouldn’t allow him a late application,” McPhatter said.
No second was made to his motion and the board continued to discuss the issue.
“I don’t see how you could do that to an old man. I don’t see why. You going to get old… you’ll get old,” McPhatter said.
He later left the conference room in frustration.
The lack of exemption further compounds Kelly’s dilemma, according to Schmidt, because even if he can reach an agreement in the foreclosure case, any taxes owed after the case began will be added to the amount sought by the courts. Taxes for 2017, 2018 and taxes for every year until the case is settled will be added to the bill with interest and penalties.
Without the exemption Kelly will be charged the full tax bill for the $19,600 value that the county tax accessor has placed on the property.
The whole debacle could have been avoided with a title search. A title search collects any documents related to a piece of real estate, and makes the purchaser aware of any outstanding liens, debts, taxes or claims against the property.
However, Kelly did not make the transaction through a realtor. He bought the home directly from the owner who did not disclose the back taxes. Kelly also says he was not advised to do a title search by the lawyer who filed the deed.
“Ed Johnston was the attorney when I bought it, I went to him to get the deed registered, and he didn’t say nothing about it. He didn’t say nothing to me about a title search,” Kelly said.
Johnston is also the county attorney. He advised the board at Monday’s meeting that he was familiar with the case, but did not remove himself from the proceedings.
Johnston could not be reached for comment.
Reach Beth Lawrence 910-506-3169