Tax Type
Local Taxes
Description
Authority of a locality to collect from a taxpayer attorney's fees
Topic
Prohibited Activity
Taxpayers
Date Issued
04-11-2014
April 11, 2014
Stephen W. Mullins, Esquire
County Attorney for Dickinson County
Post Office Box 250
Castlewood, Virginia 24224
Dear Mr. Mullins:
I am responding to your request for an official advisory Opinion in accordance with § 2.2-505 of the Code of Virginia.
Issues Presented
You inquire regarding the authority of a locality to collect from a taxpayer attorney's fees incurred by the locality in its efforts to recover delinquent real estate taxes. Specifically, you ask whether such fees are collectable in a situation where suit for judicial sale is initiated by the locality, but the property is redeemed prior to sale, and the case is dismissed with no order providing for attorney's fees.
Response
It is my opinion that when a suit is brought by a private attorney retained by a locality for delinquent taxes and the property is redeemed prior to sale, attorney's fees are collectable only if set by the court.
Background
You relate that, in 1998, Dickenson County engaged the services of an attorney to file suits for the sale of tax-delinquent lands. The attorney filed suit' for the sale of one parcel, but was unable to continue his work in the proceedings due to being appointed to a judgeship. The County paid him approximately $1,600.00 in fees for his services up to that point. The County did not hire another attorney to continue the proceedings. You advise further that the owner of the parcel entered into an agreement with the County Treasurer to pay the real estate taxes owed on the property and has paid all of the taxes that had been owed on the parcel. Accordingly, no sale of the property occurred. The suit against the parcel owner was stricken from the docket on June 14, 2004. You state the Treasurer recently billed the owner for the $1,600.00 in attorney's fees.
Applicable Law and Discussion
The governing law applicable to your inquiry is contained in Article 4 of Title 58.1 of the Code of Virginia, entitled "Bill in Equity for Sale of Delinquent Tax Lands."2 Section 58.1-3965(A) authorizes the sale of real estate "for the purpose of collecting all delinquent taxes on such property" when taxes are owed for more than two years. Section 58.1-3965(A) further provides, in relevant part, that in addition to the tax, "all other costs, including reasonable attorneys' fees set by the court . . . shall be collected if payment is made by the owner in redemption of the real property . . . ."3 Section 58.1-3974, which deals with such redemption, provides, in relevant part, that an owner "shall have the right to redeem such real estate prior to the date set for a judicial sale thereof by paying into court all taxes, penalties, and interest owed . . . together With all costs including costs of publication and a reasonable attorney fee set by the court."4
There is no provision related to judicial sales to collect delinquent taxes that allows for recovery of fees that are not set by the court. Accordingly, because the suit for the subject property was dismissed without a court order imposing attorney fees for redemption, there is no authority for collection of the attorney fees under the facts you present .5
Although there is statutory authority for imposing an administrative fee when an attorney or collection agency is hired to undertake collection activities generally,6 that statute is inapplicable here. In your inquiry, the specific collection remedy chosen by the locality was a bill in equity for the sale of delinquent tax lands filed pursuant to the provisions of § Article 4 of Title 58.1. As concluded above, this enforcement mechanism requires a court order prior to imposition of an attorney fee in such suits. "In construing statutes, if one section addresses a subject in a general way and the other section speaks to part of the same subject in a more specific manner, the latter prevails."'
Conclusion
Accordingly, it is my opinion that when property subject to a judicial sale is redeemed by a taxpayer and there is no court order imposing attorney's fees for the collection of delinquent taxes, any attorney fees charged to the locality may not be assessed against the taxpayer.
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- With kindest regards, I am
Very truly yours,
Mark H. Herring
Attorney General
Mark H. Herring
Attorney General
1.Specifically, you relate that the attorney filed a bill in equity pursuant to VA. CODE ANN § 22 2 2.Sections 58.1-3965 through 58.1-3975 (2013)
3 Emphasis added.
4 Emphasis added.
5 In Virginia, localities have only those powers granted them by statute: "In Virginia the powers of boards of supervisors are fixed by statute and are limited to those conferred expressly or by necessary implication. This rule is a corollary to Dillon's Rule that municipal corporations have only those powers expressly granted, those necessarily or fairly implied therefrom, and those that are essential and indispensable." Bd. of Supvrs. v. Home, 216 Va. 113, 117, 215 S.E.2d 453, 455 (1975) (citations omitted); accord Bd. of Supers. v. Countryside Inv. Co., 258 Va. 497, 503, 522 S.E.2d 610, 613 (1999).
6 See § 58.1-3958 (2013).
7 Beard Plumbing & Heating v. Thompson Plastics, 254 Va. 240, 245, 491 S.E.2d 731, 734 (1997).
Attorney General's Opinion