Can a Tennessee court clerk require people to put up a deposit before letting them bid at a delinquent property tax auction?

Subject

Whether a Tennessee court clerk has authority to require a deposit as a condition of bidding at a delinquent property tax sale, and if so, whether there is any limit on the amount.

Plain-English summary

Representative Brock Martin asked a clean question on behalf of Tennesseans who show up to delinquent tax auctions: can the court clerk require a deposit before allowing me to bid? The AG's answer is no.

The reasoning: court clerks are ministerial public officers, and ministerial officers can do only what statute expressly authorizes or what is necessarily implied from those express powers. The Tennessee Court of Appeals stated this rule plainly in Jones v. Anderson (2007), and the older Tennessee Supreme Court decisions in Bailey v. Schubert (1958) and State v. Brady (1851) say the same thing.

The delinquent tax sale statutes (Tenn. Code Ann. §§ 67-5-2501 to -2516) carefully list what the clerk does: advertise the sale, give notice to the property owner, set the minimum bid (taxes, penalties, interest, and costs), collect payments, bid the minimum on behalf of the taxing entity if nobody else does, file a report of sale, send notice to the register of deeds, and provide an annual list of unpaid taxes. They also explicitly tell the clerk what the clerk does not have to do (no duty to prepare suit papers under § 67-5-2410). Nowhere in any of this does the statute mention a bidder deposit. Because there is no express grant and nothing about the listed powers necessarily implies the right to require a deposit, the clerk simply does not have that authority.

The opinion treats Question 2 (whether there's a cap on a deposit if it could be required) as moot because of the answer to Question 1.

What this means for you

If you are someone planning to bid at a Tennessee delinquent tax sale

The opinion concludes that no statute authorizes a court clerk to require a deposit as a condition of bidding. The court must order the sale for cash under § 67-5-2501(a)(1), and the minimum bid is set by statute (taxes, penalties, interest, and costs of administering the sale).

If you are a court clerk

The opinion holds that a clerk has no authority to require a deposit as a prerequisite to bidding at a delinquent tax sale. The clerk is a ministerial officer whose authority is limited to what the statutes expressly grant or necessarily imply, and the delinquent tax sale statutes make no reference to bidding deposits.

If you are a county attorney

The opinion enumerates the clerk's express statutory duties (advertising and notice, setting the minimum bid, bidding the minimum for the taxing entity in certain circumstances, collecting payments, filing the report of sale, and providing the annual unpaid taxes list) and states that the clerk has no duty to prepare suit papers under § 67-5-2410. It concludes that the clerk cannot require a deposit because no statute expressly or impliedly grants that authority.

If you are a state legislator

The opinion grounds its conclusion in the absence of express or implied statutory authority for a bidder deposit. It does not address whether such authority should be added.

Common questions

Q: Can a Tennessee court clerk require a deposit to bid at a delinquent tax sale?
A: No. The opinion concludes that no Tennessee statute expressly, or by necessary implication, authorizes a court clerk to require a deposit as a condition to bidding at a delinquent tax sale, so the clerk has no authority to do so.

Q: Did the opinion say anything about a limit on the deposit amount?
A: The second question asked whether there is a limit on the amount a clerk could require. The opinion treats that question as moot in light of its answer to the first question.

Q: Why can't the clerk require a deposit?
A: The opinion explains that a court clerk is a ministerial public officer who can exercise only the authority expressly conferred by statute or necessarily implied from it. The delinquent tax sale statutes do not mention bidding deposits, and that authority cannot be implied from the clerk's circumscribed powers.

Q: Are political subdivisions allowed to bid?
A: Yes. The opinion notes that § 67-5-2508(a)(1) authorizes political subdivisions to bid, and that generally any person not disqualified by statute may bid.

Q: What is the minimum bid?
A: Per § 67-5-2501(a)(2) and (b)(2), the clerk determines the minimum bid, which includes the amount due for taxes, penalties, interest, and costs of administering the sale.

Q: What happens after the auction?
A: The opinion states that the clerk files a report of sale for the judge's confirmation and forwards notice of the sale to the register of deeds under § 67-5-2501(c). The clerk, alone or with the county trustee, collects payments under §§ 67-5-2404(c) and 67-5-2421.

Background and statutory framework

Tennessee enforces delinquent property taxes through court-ordered public sales. The framework is in Tenn. Code Ann. §§ 67-5-2501 to -2516. The court orders the sale, the clerk conducts the auction (or a special master does), and the proceeds go to satisfy the unpaid taxes, penalties, interest, and costs.

The clerk's role is enumerated by statute. Among the express duties: advertise and give notice (§ 67-5-2501); set the minimum bid (§ 67-5-2501(a)(2), (b)(2)); bid the minimum on behalf of the taxing entity if no one else does (with the environmental-risk exception in § 67-5-2501(a)(2)); collect payments (§§ 67-5-2404(c), 67-5-2421); file the report of sale (§ 67-5-2501(c)); provide an annual unpaid taxes list (§ 67-5-2403). And the statute is explicit that the clerk has no duty to prepare petitions, complaints, summonses, notices, or orders for the prosecution of tax enforcement suits (§ 67-5-2410).

A court clerk is a ministerial officer. Tennessee law has been consistent for over 170 years that ministerial officers act only as the statute prescribes. Bailey v. Schubert, 315 S.W.2d 249, 252 (1958), said the clerk is a "mere ministerial officer and cannot act except under the conditions prescribed by the statute." State v. Brady, 31 Tenn. 36, 37 (1851), held that a clerk could not administer oaths outside the presence of the court because the statute conferred authority only to administer oaths in court. Jones v. Anderson, 250 S.W.3d 894, 897 (Tenn. Ct. App. 2007), in the delinquent tax sale context itself, declined to order the clerk to act "[i]n the absence of an express [statutory] grant of authority."

Layered on top is the broader public-officer rule from 67 C.J.S. Officers § 323 (2023): public officers can exercise only the powers expressly conferred by constitutional or statutory authority or necessarily implied from those powers. "[E]xpress statutory powers cannot be broadened by implication," nor "may public officials expand those powers by their own authority."

Putting these layers together, the AG's analysis is short and conclusive. The delinquent tax sale statutes do not authorize a bidder deposit. The clerk cannot create the authority by adopting a local practice. So a clerk has no authority to require one.

Citations

Statutes:

• Tenn. Code Ann. §§ 67-5-2501 to -2516 (delinquent tax sales)
• Tenn. Code Ann. § 67-5-2501(a)(1), (a)(2), (b)(2), (c) (cash sale, minimum bid, report of sale)
• Tenn. Code Ann. § 67-5-2502(a)(6) (clerk conducts the sale)
• Tenn. Code Ann. §§ 67-5-2403, 67-5-2404(c), 67-5-2410, 67-5-2421 (clerk's other duties and limits)
• Tenn. Code Ann. § 67-5-2508(a)(1) (political subdivisions may bid)
• Tenn. Code Ann. § 67-5-2706 (delinquent tax sale provision involved in Jones)

Cases:

• Bailey v. Schubert, 315 S.W.2d 249, 252 (1958), clerk is a ministerial officer
• State v. Brady, 31 Tenn. 36 (1851), clerk can act only as statute prescribes
• Jones v. Anderson, 250 S.W.3d 894, 897 (Tenn. Ct. App. 2007), clerk needs express statutory authority

Other:

• 85 C.J.S. Taxation § 1266 (2023), general qualification of bidders
• 67 C.J.S. Officers § 323 (2023): public officer authority limits

Source

• Landing page: https://www.tn.gov/attorneygeneral/opinions.html
• Original PDF: https://www.tn.gov/content/dam/tn/attorneygeneral/documents/ops/2023/op23-08.pdf

Original opinion text

STATE OF TENNESSEE
OFFICE OF THE ATTORNEY GENERAL
May 22, 2023
Opinion No. 23-008

Authority of Court Clerk to Require a Deposit to Bid at a Delinquent Tax Sale

Question 1

Is a court clerk authorized to require a deposit as a condition of bidding at a delinquent tax sale?

Opinion 1

No. As a public officer a court clerk has and can exercise only the authority that is expressly conferred on the clerk by statute or necessarily implied from the powers granted by statute. But no Tennessee statute expressly—or by necessary implication—authorizes a court clerk to require a deposit as a condition to bidding at a delinquent tax sale.

Question 2

If a court clerk is authorized to require a deposit as a condition of bidding at a delinquent tax sale, is there a limitation on the amount the court clerk is authorized to require?

Opinion 2

In light of Opinion 1 this question is moot.

ANALYSIS

A delinquent tax sale is the judicially ordered public sale of property for the purpose of collecting unpaid taxes owed on the property. Tennessee's delinquent tax sale process is prescribed by statute. See Tenn. Code Ann. §§ 67-5-2501 to -2516.

The delinquent tax sale—basically an auction at which the public is invited to bid on the property—is conducted by the clerk of the court that orders the sale. Id. § 67-5-2502(a)(6) (referring to the clerk or a special master "conducting the sale" of the property). Generally, any person not disqualified by statute may bid at a delinquent tax sale. 85 C.J.S. Taxation § 1266 (2023). Political subdivisions are also authorized to bid. Tenn. Code Ann. § 67-5-2508(a)(1). There is no statutory requirement that to qualify to bid a potential bidder must make a deposit.

The clerk's authority and responsibilities in conducting the sale are delimited by statute. Once the court orders the sale, the clerk is responsible for advertising the sale to the public and for providing notice of the sale to the owner(s) of the property to be sold. Id. § 67-5-2501. The clerk determines the minimum bid, which is to include the amount due for taxes, penalties, interest, and costs of administering the sale. Id. § 67-5-2501(a)(2), (b)(2). And, with some exceptions, the clerk must bid that minimum on behalf of the taxing entity if no other bidder offers the minimum or larger bid. Id. § 67-5-2501(a)(2).

The court must order the sale of the property for cash. Id. § 67-5-2501(a)(1). The clerk, either alone or along with the county trustee, collects any payments made towards the taxes at issue during the proceedings. Tenn. Code Ann. §§ 67-5-2404(c), 67-5-2421. Once the auction has concluded, the clerk files a report of sale for the judge's confirmation and forwards notice of the sale to the register of deeds. Id. § 67-5-2501(c). The clerk is required to provide annually, upon request, a complete list of unpaid taxes with their associated properties and tax years at issue in delinquent tax cases in the clerk's court. Id. § 67-5-2403. But the clerk expressly has no duty "to prepare petitions, complaints, summonses, notices or orders for the prosecution of tax enforcement suits." Id. § 67-5-2410.

In short, Tennessee's delinquent tax sale statutes do not give the clerk any authority to require a deposit as a prerequisite to bidding at a sale—in fact, the statutes make no reference at all to bidding deposits. The clerk's responsibilities and authority with respect to delinquent tax sales are limited by statute to receiving and distributing money during the process, providing notices and keeping records, reporting the sale to the judge and other officials, and, in certain delineated circumstances, bidding at the auction on behalf of the taxing entity.

A court clerk is a public officer. Generally, "[p]ublic officers have, and can exercise, . . . only such power and authority as are expressly or clearly conferred by constitutional or statutory authority or necessarily implied or inferred from the powers granted." 67 C.J.S. Officers § 323 (2023). Moreover, "express statutory powers cannot be broadened by implication," nor "may public officials expand those powers by their own authority." Id.

Under Tennessee law in particular, a court clerk "is a mere ministerial officer and cannot act except under the conditions prescribed by the statute." Bailey v. Schubert, 315 S.W.2d 249, 252 (1958); see also State v. Brady, 31 Tenn. 36, 37 (1851) (because the clerk of the circuit court is a ministerial officer of the court, the clerk could not administer an oath outside the presence of the court when the statute "confer[s] authority upon the clerk" to administer oaths only in the presence of and at the direction of the court). And specifically in the context of Tenn. Code Ann. § 67-5-2706, which is part of the delinquent tax sale statutory scheme, the Tennessee Court of Appeals found that the clerk could not be required to carry out an act that the statute did not "expressly" authorize or require the clerk to do. Jones v. Anderson, 250 S.W.3d 894, 897 (Tenn. Ct. App. 2007) (declining to order the clerk to act "[i]n the absence of an express [statutory] grant of authority") (emphasis in the original text).

In sum, the court clerk's role in conducting a delinquent tax sale is limited to the authority and responsibilities expressly given to the clerk by statute. Tennessee's delinquent tax statutes do not give the clerk any authority to require a deposit as a prerequisite to bidding at a delinquent tax sale, nor can any such authority be necessarily implied from the circumscribed powers granted the clerk by statute. A court clerk, therefore, has no authority to require a deposit as a condition to bidding at a delinquent tax sale.

JONATHAN SKRMETTI
Attorney General and Reporter

ANDRÉE SOPHIA BLUMSTEIN
Solicitor General

Requested by:
The Honorable Brock Martin
State Representative
425 Rep. John Lewis Way, Suite 652
Nashville, Tennessee 37243