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Supreme Court Addresses Notice of Foreclosure Sales

BY Melanie B. Leslie
May 31, 2006

When a property owner fails to pay real estate taxes, due process requires that the state make reasonable efforts to notify the owner of the resulting foreclosure proceeding. State and local statutory schemes often require the state to notify the owner by regular or certified mail. But if the notification is returned unclaimed or undeliverable, must the state make additional efforts to notify the owner? In Jones v. Flowers, 2006 U.S. Lexis 3451, the Supreme Court recently addressed this question, and held that when notice of a tax sale, sent certified mail, is returned to the state unclaimed, the due process clause requires the State to take 'additional reasonable steps' to provide notice to the property owner prior to the sale. The language of the Jones opinion casts doubt on the validity of the leading New York case on this issue, Kennedy v. Mossafa. 100 N.Y.2d 1

The Case

In Jones, property owner Gary Jones and his wife occupied their home for 25 years. Jones paid the mortgage each month, and the mortgage company paid the real estate taxes. When Jones separated from his wife, he left the home, but failed to inform the State of his change of address. Jones continued to make the mortgage payments until the 30-year mortgage was paid in full in 1997, but neither Jones nor his wife paid real estate taxes after that date. The State commenced foreclosure proceedings, and attempted to notify Jones by mailing a certified letter to him at the address of record. The letter informed Jones of his right of redemption, and explained that the house would be sold if Jones failed to exercise that right within 2 years. The post office returned the unopened certified letter to the State marked 'unclaimed.' Two years later, shortly before selling the property to a private bidder, the state once again attempted to notify Jones of the foreclosure. In addition to posting a 'notice of public sale' in the newspaper, the State mailed a second certified letter to Jones at the property address. Again, the letter was returned marked 'unclaimed.' The state took no additional steps to notify Jones of the sale.

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