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A Sugarloaf Township residence stands out in the upcoming Luzerne County back-tax auction roster because owner Robert Nemeth owes $63,234 in real estate taxes dating back a decade.
Debts of this magnitude are rare these days in the county because its outside tax-claim operator — Northeast Revenue Service, LLC — has been aggressive about bringing delinquent properties to auction.
Properties are supposed to be auctioned if taxes have gone unpaid for two years unless the owner is on a repayment plan, involved in an active bankruptcy proceeding or obtains a court order.
How did Nemeth escape a tax sale so long?
When Northeast Revenue took over in 2010, Nemeth obtained a repayment agreement so the property would not be listed for auction.
Northeast Revenue has been strictly adhering to the legal requirements for repayment agreements — at least 25 percent down with the remainder paid off within a year. The law also forbids new payment plans within three years if owners default.
County officials called for no exceptions because Northeast Revenue inherited delinquency records loaded with properties kept out of sales, often for years, even though the owners were not keeping up with payment plans or paying at all.
According to Northeast Revenue:
• Nemeth’s September 2010 repayment agreement was cancelled several months later because he stopped paying after the initial installment.
• Northeast Revenue’s plans to auction the property in April 2011 were halted when Nemeth filed for bankruptcy that March.
• After Nemeth’s bankruptcy was dismissed, Northeast Revenue again prepared to list the property in a September 2011 sale. Nemeth filed for bankruptcy again that September, obtaining removal from that sale.
• Northeast Revenue obtained permission from a bankruptcy judge in January 2012 to lift the ban preventing the county from selling the property, public records show.
Nemeth said this week he is aware of the $63,234 debt and stressed he made a significant payment toward reducing what he owes in 2013. He blamed his tax problem on an assessment he says is “way out of whack” and said he will try to get on another payment plan.
“We will do whatever we can,” he said.
The property was listed in a first-stage sale in 2012, in which all liens and back taxes remained attached. As the unsold property headed to a free-and-clear auction in 2013, where there was a high likelihood it would sell with the back taxes and other baggage forgiven, Nemeth went to court seeking removal.
A Nov. 7, 2013, court petition filed by Nemeth outlines his promises:
Nemeth told the judge he had very recently agreed to sell another property he owns so he could apply the proceeds of at least $80,000 to outstanding taxes owed on the Sugarloaf Township property. He expected the sale to go through by April 1, 2014.
Nemeth also said he was prepared to pay $30,000 toward the taxes within 10 days so about 50 percent of the taxes owed on the Sugarloaf property at that time would be repaid.
He made a $45,000 down-payment that was split equally on the Sugarloaf Township home and another West Hazleton property that’s also behind in taxes, Northeast Revenue said.
The problem: Nemeth has paid nothing since, prompting the listing of both properties in the April 23 auction at the courthouse.
Nemeth owes $7,466 in taxes dating back to 2011 on the West Hazleton commercial structure, which is categorized as “unsound” in county property records.
Unsold property
The Hazleton property that Nemeth told the court would be sold to free up money for his taxes has not been sold, according to county property records. That property, which he co-owns with Joanne Scalleat, carries $2,736 in unpaid taxes from 2013 and 2014, records show.
County records indicate Nemeth filed an assessment appeal on his home in 2013 but was denied a reduction.
The Center Hill Road property is assessed at $270,000. The 6,000-square-foot structure was built about 100 years ago and is in “fair” condition, assessment records conclude. It sits on 3.3 acres.
Around 85 properties are listed in the special tax sale because the owners defaulted on repayment plans, Northeast Revenue says. Information on the auction and bidding is available at www.luzernecountytaxclaim.com.