Senate Government Operations reviews bill to shorten tax‑sale redemption and let purchasers secure vacant properties

The Senate Committee on Government Operations on Jan. 16 took testimony on S.196, a bill that would allow a purchaser at a municipal tax sale to enter and secure real property after giving written notice to mortgagees and lienholders and would shorten the statutory redemption period from one year to six months.

The change is aimed at preventing further deterioration of vacant properties purchased at tax sales, supporters said. "This bill would make a couple of small changes to 32 V.S.A., the tax sale law," said Cheryl, a former state senator and Rutland alderwoman who described her son's multi‑year litigation after buying a tax‑sale property in 2023. She said the purchaser waited a year before obtaining a tax collector's deed, then faced bankruptcy litigation that delayed his ability to fully take possession and obtain financing.

Cameron Wood of the Office of Legislative Council framed the bill in the context of recent amendments to Title 32, noting the Legislature in 2024–25 added a one‑year debt requirement, a repayment‑plan opportunity, expanded notice requirements and a $1,500 minimum outstanding debt. Wood said S.196 would not change those prerequisites but would add purchaser‑security language and shorten the redemption notice the debtor receives. "After providing the mortgagee and lienholder a record written notice at least 10 days... the purchaser of the real estate subject to the subchapter may enter the property to secure the property against illegal activity, damage from exposure, deterioration, [and] potential fire hazard," Wood read.

Wood also cautioned that federal bankruptcy law can interrupt tax‑sale finality. He told senators that if a debtor files for bankruptcy during the redemption period, municipal collection actions stop and the bankruptcy process may allow debtors to reorganize and retain property under court supervision, which can extend resolution for years.

Committee members raised several concerns. Senators pressed how notice is delivered — certified mail to the last known address, first‑class mail if returned, email when available and affixing notice to the door — and asked how the rules apply when a property is vacant or lacks a conventional front door. Members also questioned whether purchasers should be allowed to enter properties that may still be occupied and whether law enforcement accompaniment or clearer limits should be required to prevent unlawful entry.

The bill would also include an effective‑date provision: the changes would not apply to properties already subject to notice or sale before July 1, 2026, Wood said. Senators asked for additional testimony from the Vermont Bankers Association, Vermont Legal Aid, town managers, delinquent‑tax collectors and people with direct experience buying or losing homes in tax sales before the committee moves forward.

The committee did not take a vote. The chair said the item would be returned to the calendar for further consideration in the coming weeks.