The Denver Post ran 2 editorial articles on December 22nd about Metro Districts which I have covered in detail in 2 previous newsletters. Here are the recommendations from the Denver Post-
- State legislature should pass a bill requiring disclosure of the property tax rate or mill levy on all real estate listings, including a disclosure if the property is in a special taxing district.
- On new construction the developer/builder should be required to disclose their anticipated metro district tax rate.
- DORA should make rules for seller disclosure that ensures transparency by including the mill levy rate in their listings, including the mill levy rate for special taxing districts.
I hate to tell the Denver Post this but disclosing the mill levy rate is about as helpful to a buyer as disclosing the home's altitude. I swear the only people who can calculate property taxes correctly are title company closers and our underwriters.
For the disclosure to be more effective, I think every property sold (new or existing) within a special taxing district should have a separate disclosure document like Lead-Based Paint Disclosure and given to a buyer within a few days of being under contract just like the Seller's Property Disclosure is. For this disclosure to be effective here is what I believe it should contain to protect homebuyers and to help achieve long-term affordable homeownership.
As you probably know from reading my newsletters I am not a big fan of government telling us what to do as I have a Libertarian streak in me. But, the fact that these special taxing districts are formed in secret with no checks and balances and no oversight and outside the realm of TABOR, something needs to be done.
- Should include how much in taxes are being paid to the special taxing district and for how long.
- Second, can the tax bill be raised and by how much?
- Third, it should disclose how much debt has been authorized by this metro district and how much the metro district currently owes updated once a year.
- Fourth, it should disclose if the metro district allows for junior bond holders, who these bond holders are, how much is owed to them, and terms of repayment to these junior bond holders. As I have written before junior bond holders is where the greatest danger lies I believe and I personally wouldn't want to buy a home in a metro district with junior bond holders, unless I was one of the junior bond holders.
In the second editorial article written by Sam Mamet, the retired executive director of the CO Municipal League, much of the above information is disclosed in a metro district's Service Plan which is a public document and can be obtained by calling the metro district in question or by contacting the planning department of your local town, city or county. And if the disclosures I recommend are required I am sure all of this info could be found on a website(s) quickly and easily.
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