Public Hearing on Bill 26-771: Tax Sale Equity Amendment Act of 2026

On Wednesday, September 23, 2026, the Council of the District of Columbia's Committee of the Whole, chaired by Phil Mendelson, held a public hearing on Bill 26-771, the Tax Sale Equity Amendment Act of 2026. The bill aims to amend Titles 47 and 42 of the D.C. Code to modernize the tax sale process and enhance equity protections for property owners in response to recent Supreme Court decisions (Tyler v. Hennepin County, 2023, and Pung v. Isabella County, 2026). The hearing featured two panels of public witnesses and a panel of government representatives from the Office of the Chief Financial Officer (OCFO) and the Office of the Attorney General (OAG). The record closed at 5:00 p.m. on Monday, October 5, 2026.

Public Comments & Testimony

• Sam Bonner (Policy Director, DC Community Wealth Builders) expressed support for the bill’s goals but questioned whether tax sales should exist at all, advocating for a land bank and phasing out private lien sales. He favored intentional government management of delinquent properties.
• Jamie Kavanaugh (Senior State Policy Counsel, Pacific Legal Foundation) – represented Geraldine Tyler in the Supreme Court case; urged amendments to remove the opt-in requirement, apply surplus equity protections to all property owners (including non-owner-occupied), and impose an affirmative duty on the government to return surplus. She suggested an unclaimed property fund as a fallback.
• Andrea Bop Stark (Senior Attorney, National Consumer Law Center) urged the committee to reject the bill as drafted, arguing the opt-in framework undermines constitutional rights, creates burdens for low-income and elderly homeowners, and risks catastrophic administrative errors (e.g., misclassification of owner-occupied homes as vacant). She called for automatic surplus rights for all property owners.
• Deborah Cuevas Hill (Managing Attorney, Legal Counsel for the Elderly) echoed opposition to the opt-in system, stating homeowners should not have to navigate complex procedures to claim their own equity. She highlighted that properties labeled vacant are often family homes caught in probate or belong to seniors, and misclassifications are common.
• Matt Sokol (Staff Attorney, Legal Aid DC) opposed the opt-in requirement, arguing it would cause homeowners—especially heirs, elderly, and low-income residents—to lose equity. He raised specific concerns about heirs property and insufficient notice to all individuals with an interest (e.g., those named in wills who are not “reasonably ascertainable heirs”).
• Alex Long (public witness) testified on an unrelated matter (IHRA anti-Semitism definition) and did not address the bill.
• Joe Bishop Henchman (Executive VP, National Taxpayers Union Foundation) supported the bill but urged removal of categorical exceptions (e.g., unimproved lots, high tax-to-value ratios) and the 90-day opt-in. He noted that D.C. and Michigan are the only jurisdictions not yet updated laws after Tyler.
• Kevin Bailey (Board Member, D.C. Land Title Association) raised technical concerns about title insurability, including the complex multi-step trustee process, ambiguous “reasonably ascertainable heirs” standard, and conflicting provisions for challenging judgments. He suggested a streamlined judicial sale process like Virginia’s.
• Seth Salovitz (Principal, Seth P. Slamovich PLLC) representing tax sale investors, warned that the bill’s presumption that nearly all properties have equity based on assessed value would reduce investor participation. He argued assessed value often exceeds market value, leading to losses for purchasers if a trustee sale fails. He proposed an opt-in for non-owner-occupied properties with a showing of likely equity before judgment.
• TJ Ryan (Director, Alterna Tax Asset Group) supported equity protections but cautioned that expanding trustee sales to vacant/blighted properties (Class 3/4) would increase risk. He noted that under the proposed framework, fewer than 10 of 34 recent Class 3/4 liens would have been purchased, reducing collections. He recommended expedited foreclosure timelines and clear trustee sale procedures.
• James Schneider (public witness) urged eliminating the 10% tax rate for blighted properties (effectively 20–30%), which he said confiscates equity and discourages repairs. He argued tax sale investors often rescue neglected properties and should be compensated fairly.
• Tierney Bonds (Member, D.C. Association of Realtors Public Policy Committee) broadly supported the bill but expressed concern about increased fees and costs that could erode equity. She suggested allowing property owners to present evidence of market value to rebut the presumption of no equity.
• Tara Toomey (Professor of Clinical Law, GWU) invoked the “Caesar what is Caesar’s” principle, arguing the bill’s procedural hurdles (opt-in, 90-day limit) risk violating due process under Nelson v. Colorado. She supported automatic return of surplus and offered to assist with amendments.

Discussion Items

• Bill Overview: Chair Mendelson explained the bill’s origin in Tyler v. Hennepin County, which held that governments cannot seize more than the tax debt from a property. The bill also responds to Pung v. Isabella County regarding fundamentally fair procedures.
• Opt-in vs. Automatic Surplus: Testimony consistently criticized the bill’s requirement that certain property owners (e.g., of vacant/blighted properties) must file a claim within 90 days of service to receive surplus equity. Witnesses argued this shifts the burden to traumatized or unsophisticated owners. Government witnesses (OCFO and OAG) defended the opt-in for distressed properties, contending it preserves investor interest and prevents properties from remaining unsold and accruing more taxes.
• Property Classification: Witnesses highlighted that many properties labeled “vacant” are actually occupied or in probate, and that misclassifications are frequent. The bill treats owner-occupied (Class 1A/1B) differently from vacant/blighted (Class 3/4) and other properties.
• Trustee Sale Process: The bill expands trustee sales (post-foreclosure open market sales) to many properties, a process currently used in only 5–10 cases since 2014. The OCFO/OAG argued it maximizes equity for owners. Investors and title insurers raised concerns about costs, delays, and title clouding.
• Investor Impacts: Purchasers like Mr. Ryan and Mr. Salovitz warned that the bill’s presumptions could reduce bidding, especially on distressed properties, leading to lower tax collections and more blight. They requested clearer timelines and compensation for bearing risk.
• Fee Updates: The OCFO noted that capped legal fees for tax sale purchasers have been $1,500 since 2014, causing many attorneys to drop cases. The bill resets fees with a cost-of-living adjustment (COLA) and caps annual increases at 3% (per a proposed redline from OAG).
• Alternative Models: Discussion explored Virginia’s direct deed sale and Maryland’s tax certificate system with high-bid premiums. Chair Mendelson questioned whether D.C. could simplify its process, but OCFO/OAG argued the current redemption-focused model aids owners.
• Unclaimed Property: Ms. Kavanaugh suggested unclaimed property funds for surplus when owners cannot be located; Chair Mendelson noted D.C.’s escheatment period is short.

Key Outcomes

• No vote taken; this was a public hearing for testimony and discussion.
• Record closes at 5:00 p.m. on Monday, October 5, 2026, for written testimony and supplemental materials.
• Government redline: OAG presented a redline addressing some concerns (e.g., clarifying that failure to file an answer does not block a trustee sale where presumption applies; adjusting COLA formula). Chair Mendelson requested it be shared with the committee.
• Chair Mendelson indicated that amendments may be considered, including removing the opt-in, extending deadlines, and simplifying the trustee process. He noted the bill may be “step one” of a broader reform over the next half-year.
• Ongoing stakeholder engagement: Legal service providers, tax lien investors, and title insurers committed to working with the committee on technical fixes.