Can a South Carolina delinquent-tax sale require bidders to register in advance?

Plain-English summary

The Attorney General concluded that South Carolina's delinquent-tax-sale statutes did not categorically bar a tax collector from requiring bidders to register before a public auction. The statute requires a public auction but gives little direction about its conduct. The office said a registration process aimed at avoiding bidder defaults could be a reasonable way to administer the sale.

The answer has a limit: a court could find that a particular registration policy violates the public-auction requirement if it is applied so restrictively that people cannot effectively participate. The office could not decide whether the policy described by the legislator's constituents crossed that line, because that would require factual findings.

What this means for you

Tax collectors

The opinion did not treat silence about registration as a ban. It assumed the policy was adopted by the officer charged with selling delinquent-tax property and said such an officer's reasonable administration of the statute generally receives deference. It also emphasized that the auction must remain public.

Prospective bidders

The opinion recognized the concern of people who arrived at an auction and were told they had missed advance registration. It did not determine whether that specific policy unlawfully restricted participation; that question would depend on the policy's operation and facts the office could not find.

Common questions

Q: Does the tax-sale statute expressly require bidder registration?
A: The opinion did not identify an express registration requirement. It concluded the statute's silence did not categorically prevent tax collectors from adopting one.

Q: Can registration make a delinquent-tax auction unlawful?
A: The opinion said a court could find a policy unlawful if its restrictive application effectively prevents public participation in the required public auction.

Q: Did the AG decide that the sale attended by the constituents was invalid?
A: No. The office said that judging this particular preregistration policy would require factual findings outside an AG opinion.

Background and statutory framework

S.C. Code § 12-51-50 requires delinquent property to be sold at a public auction and describes sale and payment procedures. S.C. Code § 12-51-70 addresses a winning bidder's failure to pay. The opinion reasoned that an advance-registration process could reduce the costs and delay caused by defaults, while a court may well find that a policy applied so restrictively that it prevents public participation violates the public-auction requirement.

Citations and references

The opinion quotes S.C. Code § 12-51-50 and discusses S.C. Code § 12-51-70. The official PDF contains its discussion of agency deference and the limits on fact-finding.

Source

• Landing page: https://www.scag.gov/opinions/opinions-archive/opinion-addressing-whether-delinquent-tax-collectors-are-permitted-to-adopt-bidder-registration-procedures-for-public-tax-sales/
• Original PDF: https://www.scag.gov/media/5d4f5hrb/02827748.pdf

Original opinion text

it&

I

i

§1

,41

*

*

«

¥

&

:*°

^•SOUTH^
Alan Wilson
Attorney General

November 16, 2021

The Honorable John Richard C. King
Member

South Carolina House of Representatives
District No. 49
P.O. Box 11555

Rock Hill, SC 29731
Dear Representative King:

Attorney General Alan Wilson has referred your letter to the Opinions section. The letter states the following: I write to you in reference to delinquent tax sales, specifically, whether a

county's requirement that a bidder be registered in order to participate is authorized by law. Recently, constituents of mine attended a delinquent tax sale. When they arrived they were told they could not participate because they had not previously registered for the auction and should have done so beforehand. After reviewing all

statutes related to delinquent tax sales, I do not see where registration is required in order to participate in an auction. If this is not statutorily required by the General Assembly, can a county require this on their own? I am inclined to think that

because the process is very detailed and spelled out in statute that it is not the General Assembly's intent to require someone to register in order to participate in the auction. Law/Analysis

It is this Office's opinion that the General Assembly did not prohibit delinquent tax collectors ("DTCs") from adopting bidder registration procedures for public tax sales. See S.C. Code § 12-51-40 et seq.

Section 12-51-50 lists the procedures for the sale of a defaulting tax

payer's property:

.

The property duly advertised must be sold, by the person officially charged with the collection of delinquent taxes, at public auction at the courthouse or other

Rembert C. Dennis Building

o

Post Office 3ox 11549

• Columbia, SC 292 11-1549

° Telephone 803-734-3970

•

Facsimile 803-253-6283

The Honorable John Richard C. King
Page 2

November 16, 2021

convenient place within the county, if designated and advertised, on the advertised

date for legal tender payable in full by cash, cashier's check, certified check, or money order on the date of the sale. If the defaulting taxpayer or the grantee of record of the property has more than one item advertised to be sold, as soon as sufficient funds have been accrued to cover all of the delinquent taxes, assessments, penalties, and costs, further items must not be sold. S.C. Code § 12-51-50.

This Office's August 31, 2020 opinion to Richland County Treasurer,

David Adams, noted that while Chapter 51, of Title 12 is very detailed in several aspects, the parameters of the sale itself are fairly ambiguous. See On. S.C. Att'v Gen.. 2020 WL 5445898 (August 3 1 , 2020). For instance, the statute does not mandate a specific date nor a particular place for the sale of property. Aside from the requirement that the sale of property must be sold "at public auction," the opinion concluded that "chapter 51 of title 12 does not give any further guidance or define the term 'auction.'" Id. at 10.

It is this Office's long standing policy, like that of our state courts, to defer to reasonable

interpretations of statutes by those charged with their administration. See Op. S.C. Att'v Gen.. 20 1 3 WL 3133636 (June 1 1, 2013); see also Kiawah Dev. Partners. II v. S.C. Dep't of Health & Envtl. Control. 411 S.C. 16, 33, 766 S.E.2d 707, 717 (2014) ("If the statute or regulation 'is silent or ambiguous with respect to the specific issue,' the court then must give deference to the agency's

interpretation of the statute or regulation, assuming the interpretation is worthy of deference."). Your letter does not specify who adopted the preregistration policy at issue, but, for purposes of analysis, this opinion will assume that it was adopted by the officer charged with the duty to sell

real property and mobile or manufactured housing for nonpayment of ad valorem property taxes. Because section 12-51-50 is silent regarding the conduct of public auctions, this Office will generally defer to such an officer's policy decision "unless it is 'arbitrary, capricious, or manifestly contrary to the statute.'" Kiawah Dev. Partners. II. 41 1 S.C. at 34-35, 766 S.E.2d at 718. Broadly speaking, this Office cannot categorically say adopting of a preregistration

requirement for a public auction under chapter 5 1 of title 12 would be arbitrary. Section 12-5 1-60

requires a successful bidder to "pay legal tender. . . in the full amount of the bid on the day of the sale." If a successful bidder fails to make payment within that time, "the person officially charged

with the collection of delinquent taxes shall cancel that bid and duly readvertise the same property for sale, in the same manner, on a subsequent delinquent tax sale date." S.C. Code § 12-51-70. The defaulting bidder is also liable for damages which can be collected by suit. Id A court may

well find that a preregistration process adopted to avoid the costs, delay, and litigation resulting from defaulting bidders is not arbitrary, but rather furthers legislative intent. However, a court could also find a preregistration policy is applied in a restrictive manner that effectively prevents "public" participation in the auction. If such a policy restricts public participation, a court may well find the particular policy violates section 12-51-50's requirement that the sale take place at

public auction.

Determining whether a particular preregistration policy restricts public

The Honorable John Richard C. King
Page 3
November 1 6, 202 1

participation would necessarily require findings of fact which are beyond the scope of this Office's

opinions.1
Conclusion

As is discussed more fully above, it is this Office's opinion that the General Assembly did

not categorically prohibit delinquent tax collectors ("DTCs") from adopting bidder registration procedures for public tax sales. See S.C. Code § 12-51-40 et seq. However, a court may well find

a preregistration policy is applied in a restrictive manner that effectively prevents "public" participation in the auction and, as a result, find the particular policy violates S.C. Code § 12-5150.

Sincerely,

Matthew Houck

Assistant Attorney General

REVIEWED AND APPROVED BY:

^Rooert D. Cook
Solicitor General

1

See Op. S.C. Att'y Gen., 2006 WL 1 207271 (April 4, 2006) ("Because this Office does not have

the authority of a court or other fact-finding body, we are not able to adjudicate or investigate factual questions").