Background
Baltimore sold 2923 McElderry Street at a tax sale on October 18, 2023, and Vertex TL LLC later acquired the tax-sale certificate. Vertex filed an action to foreclose the right of redemption in July 2024. After the owner did not redeem by the court-set deadline, the Circuit Court for Baltimore City entered a foreclosure judgment on October 12, 2024, vesting title in Vertex.
Five days later, the owner, 2921-2923 McElderry Street, LLC, moved to set aside that judgment, asserting it had redeemed the property before judgment by paying the amount supplied by the City’s tax-sale office, current taxes, and Vertex’s fees and costs. Vertex responded that the redemption was incomplete because the owner had not paid 2024-2025 property taxes or outstanding metered-water charges. The circuit court vacated the foreclosure judgment, concluding the property had been redeemed.
The Court’s Holding
The Appellate Court held that Vertex, as holder of the tax-sale certificate, could challenge whether redemption legally extinguished its interest. It further held that the owner did not have to pay the 2024-2025 real-property taxes when it attempted redemption on September 12, 2024. Although those taxes had become due on July 1, they were not yet “in arrears” under the applicable statute and therefore were not “delinquent” for purposes of the redemption statute.
The court held, however, that post-sale water-service charges can be “delinquent taxes” required for redemption when they are in arrears and have become a lien on the property. The circuit court incorrectly relied on a provision limiting Baltimore’s ability to sell residential property to enforce water-and-sewer liens; this was not a sale to enforce a water lien. Because the record did not establish what portion of the water lien accrued after the tax sale and had become delinquent by the redemption date, the appellate court vacated the order setting aside foreclosure and remanded for fact-finding.
Key Takeaways
- A tax-sale certificate holder may contest whether an asserted redemption complied with statutory requirements.
- For redemption, post-sale property taxes are “delinquent” only when they are in arrears, not merely when due.
- Post-sale water charges must be paid if they are in arrears and have become a property lien, subject to the owner-occupied-residential-property exception.
Why It Matters
The decision clarifies that the 2021 amendment to Maryland’s redemption statute excludes post-sale taxes that are not yet in arrears, reducing the amount needed for a timely redemption. But it also confirms that qualifying post-sale municipal water liens remain part of the redemption obligation.
Tax-sale litigants and local governments must determine the status of each post-sale charge as of the redemption date. A city’s quoted redemption figure does not resolve whether statutory redemption requirements were met when material lien charges were omitted.