Request By:
Mr. John Lair
City Attorney
City of Cynthiana
16 East Pike Street
Cynthiana, Kentucky 41031
Opinion
Opinion By: David L. Armstrong, Attorney General; By: Alex W. Rose, Assistant Attorney General
In your letter to the Attorney General, you ask three questions:
1. What is the procedure for the city to follow in order to collect delinquent tax bills?
2. If the property has been sold, can the city enforce its lien if no notice has been filed?
3. May the city collect reasonable attorney's fees for prosecuting collection actions?
KRS 91A.070 states that a city may provide by ordinance for its delinquent property taxes to be collected by the sheriff of the county and may utilize the collection procedures set forth in KRS Chapter 134. See KRS 91A.070(1). If a city does not elect to utilize the sheriff and procedures in Chapter 134, it must provide by ordinance for its own collection procedures. See KRS 91A.070(2).
KRS 134.420(1) states that the lien provided for in that section "shall not be defeated by gift, devise, sale, alienation or any means whatever except by sale to a bona fide purchaser . . . ." A bona fide purchaser is one who has purchased property for value without any notice of any defects in the title of the seller.
Walters v. Calderon, 25 Cal.App.3d 863, 102 Cal.Rptr. 89, 97 (1972). If the purchaser of the property has no notice of the city's lien and thus qualifies as a bona fide purchaser, that purchaser may defeat the city's lien against the property.
We find no prohibition nor limitation to the collection of attorney's fees by a city for collection of its delinquent taxes. This is assuming that the city has not elected to utilize the sheriff and the procedures in KRS Chapter 134. In KRS Chapter 134, the county attorney is allowed a percentage for the collection of delinquent taxes. Pursuant to KRS 91A.070(2), a city that provides for its own collection procedures should provide for the payment of reasonable attorney's fees as well.