Jill Schramm/MDN A proposed housing development just outside Berthold that broke ground in 2014 currently is among properties in foreclosure in Ward County.

The number of properties receiving notices of foreclosure in Ward County spiked to more than a thousand this year.

That’s not quite doubled from last year, but it reflects an increasing number of incidents in which property owners are letting taxes fall into arrears.

This year, Ward County identified 1,037 properties with taxes overdue for two or more years. The county mailed 2,050 notices to those holding interest in the properties in accordance with state law requiring notifications by June 1. As of early July, 747 properties remained in foreclosure.

In 2017, there were initially 588 properties that received foreclosure notices, although all but 47 eventually came off the list due to payments made.

In 2016, there were initially 447 properties in foreclosure. After redemptions or payments following private sales, 25 properties went to public auction for tax liens. Redemption can mean the oldest year of delinquent taxes are paid up, leaving the property still with owed taxes but no longer subject to foreclosure.

If not redeemed or sold by Oct. 1, properties can be foreclosed upon and offered at auction in November. Those that don’t sell at auction remain available for purchase should a potential buyer later show interest. The county sets minimum prices for properties to ensure at least recovering taxes and special assessments owed.

Some lots might not sell, which can happen for a variety of reasons. For instance, the county acquired two lots at Rice Lake that haven’t sold due to size and layout issues that prevent developing them.

Some development properties have faced foreclosure because the market for housing changed in recent years. A proposed housing development near Berthold is one that never quite took off.

“At this time, we are not encouraging that development. We have a fair amount of homes for sale in the city,” Berthold Mayor Steve Ibach said. The property is within Berthold’s extra-territorial zoning area.

Ibach said infrastructure development on the property is minimal, but there are specials owed that will be difficult to recoup.

“The biggest thing is we did have a developer’s agreement with them, and we are owed some money,” he said.

The developer was to participate in a lagoon expansion, which the city went ahead and built without those developer funds because the project was needed regardless, Ibach said.

Minot also has development properties that owe back taxes.

When special assessments exist, the city is at risk of losing dollars even if the property sells because the price might not cover the debt, said Derek Hackett, Minot public information officer, in an email. The property also may have unused infrastructure that requires city maintenance, such as water lines with settling sediment.

Taxing entities expect that there will be some delinquent taxes each year and project revenues accordingly. David Lakefield, Minot finance director, said in an email that the city mitigates for delinquencies by carrying operating reserves that can be used until tax dollars can be collected.

While there’s been no evidence of increased foreclosures in the flood zone, the city continues to deal with neglected and blighted properties in the valley.

“I would expect that as we continue with nuisance abatements, we will see more of this type of activity due to the cost of the demolition being more than the value of the lot,” Lakefield said of foreclosures.

He said there may have been a handful of times the city has acquired properties from the county for flood protection through foreclosure sale. Generally, though, the city rarely steps in to buy delinquent properties. Doing so results in losing back taxes and gaining maintenance costs.

“Ultimately, we hope the private sector can carry this lift,” Hackett said. “As a city we focus on servicing neighborhoods rather than developing them. Of course, we have a hand in planning and inspection but we are confident the private sector will be able to take this task on.”

Developers experiencing slowed interest in their subdivisions have shown interest in the National Disaster Resilience Program’s resilient neighborhood project. The project provides new home assistance to residents displaced by the flood or flood protection project. However, the newer developments haven’t fully met the project’s requirements to have infrastructure and amenities in place.

The city released a statement that it “is continuously monitoring the data related to trends in the private sector, including permits, occupancy inspection requests, etc. Should the data in the future show sufficient improvement, then through NDR, the city will consider re-engaging developers, but with the same proviso that developers must foot the costs for resilience measures in return, with the city investing NDR funds in new housing.”

On the county side, Auditor Devra Smestad said the increased number of properties going into foreclosure adds to the administrative workload.

“It is labor intensive. It is expensive,” she said, noting that foreclosure letters must be sent by certified mail. Costs are assessed to the properties.

She added many of the foreclosures are repeats from previous years as owners annually pay just enough to remove the property from the list for a year at a time.

The Ward County Highway Department is responsible for maintenance of foreclosured properties while in the county’s possession.

“In the last 10 years, we have had to do more maintenance on these lots, but the biggest challenge has been coordinating that,” Highway Engineer Dana Larsen said. Because properties move in and out of the foreclosure process, there needs to be continuous communication with the auditor’s office regarding which lots require county maintenance.

“The other challenge is sometimes it needs more than just mowing. It needs more of a cleanup,” Larsen said. In a recent case, the county lowered the price on a lot in exchange for a new owner paying for the cleanup.

–

Ward County foreclosure notices as of June 1

2016: 447 properties

2017: 588 properties

2018: 1,037 properties