Foreclosures near for 600 in Schenectady; some try last-ditch appeal

PHOTOGRAPHER: Kathleen Moore

A man who has been faithfully paying off his dead grandmother’s property taxes, and a woman who simply did not pay any property taxes since the day she bought her house, are both about to lose their homes.

The city will foreclose on about 600 properties Friday for failure to pay taxes. Most of the houses are vacant or rentals, and many more are empty lots where houses once stood.

But some are owner-occupied, and that’s where the stories get complicated.

Aaron Graham now lives in a house once owned by his grandmother on Albany Street in the Woodlawn neighborhood. She died in 2005 and the taxes went unpaid for years as the family tried to decide what to do with the property. In 2010, he and his wife moved in, and while they searched for jobs they also set up a payment plan with American Tax Funding, a private tax collector, for taxes owed from 2005 to 2009. Meanwhile, they were not paying their current property taxes. In two years they paid off $13,000. They have $7,000 left to pay ATF and are making payments on time.

But they also owe taxes to the city — and now they are being foreclosed upon for that part of the debt. While paying ATF, they didn’t pay the city taxes due in 2010, 2011 and 2012.

Recently, they both finally got full-time jobs. Graham said he’s certain they could pay off the debt to the city in five months if he’s given that time.

“But now we only have two or three days left,” he said. “My wife and I feel we’re a victim of time.”

Others are in a different situation.

Savita Liladhar hasn’t paid any taxes since she bought her house on Carrie Street in the Northside neighborhood nearly four years ago. She now owes $45,167, including interest and fees.

She said she had no idea she could lose her house if she didn’t pay the taxes.

“When I bought my house, I was 21 years old,” she said. “I didn’t really understand how the whole tax situation worked.”

Instead, she spent her money on renovations.

“We kind of didn’t have the money to pay the tax,” she said. “It’s not like we had the money and didn’t pay.”

She thought that if she renovated the two rental units on the property, that income could be used to pay the taxes. She got a tenant two months ago, but did not pay any portion of the taxes due this month.

She also lost her job after buying the house, which left the family relying on only her husband’s income.

“It wasn’t a situation I could’ve helped,” she said.

But now that the city is threatening to foreclose, she wants to pay.

She has no mortgage on the house, so she wants to apply for a loan to pay off the taxes. The only trouble is that she won’t get it before Friday.

“It takes more than two weeks to get a loan from the bank,” she said. “I’m willing to pay. I’m just asking for more time.”

She’s particularly upset because her 9-year-old son is blind, and she doesn’t want to move and force him to learn a new environment. He can easily maneuver around the house because he knows where everything is, she said.

Most owner-occupants have been given until December to try to pay off their debt, but Liladhar doesn’t qualify because she has two rental units on her property. Owner-occupants can have no more than one rental unit to get the extension.

After spending years on renovations, Liladhar is upset that she might lose the house over the taxes. City officials have offered to let her rent after the foreclosure and eventually buy the house back from the city if she can save up the money. But she isn’t interested.

“Their plan after foreclosure is for me to pay rent! On the house I spent my life savings on and worked on all these years?” she said.

City Council members were disturbed by Graham’s story, but less moved by Liladhar’s. They had originally insisted on strict deadlines so that the city had a chance to sell the properties before winter, but they said they didn’t intend to foreclose on owners who were paying back their tax debt.

“I hate to displace people that want to be good citizens,” said Councilman Vince Riggi. “It’s important to have people in their homes. If they want to pay, it’s something to look at.”

But Councilman Carl Erikson said the council can’t offer a special deal to everyone who begs for leniency at the last minute.

If the owners are currently paying taxes, but haven’t yet paid off delinquent taxes caused by death, a paperwork error or some other accident, Erikson said a deal might be offered.

“There are situations where it’s appropriate,” he said. “If he’s been paying and there’s just this one [old bill] that’s lingering, you might do something. But at some point, you have to look at past performance as an indicator of future performance.”

Since Liladhar hasn’t paid any taxes, even after foreclosure warnings were sent this year, Erikson said he did not believe she would start paying regularly if she were offered a deal.

“I don’t think the city’s letter turns people magically into taxpayers,” he said.

As for those who stopped paying taxes after losing their job, he said he can’t support a deal.

“I have sympathy for people, but the taxpayers just can’t rescue everyone. I feel bad for their situation, of course, but you’re talking about people who haven’t paid for years. You and I have been making up the difference,” he said. “I’m not so sure we should say, ‘Well, don’t worry, the rest of the taxpayers will cover it till you get a new job.’”