"Doesn't sound fair, does it?" 97-year-old widow's home haunted by old tax debt, so who should pay?



OAK CREEK (WITI) -- It's hard enough to sell a house, but imagine if you were one signature away from sealing the deal, only to find out you owe thousands of dollars in taxes that no one ever told you about! It happened to a 97-year-old Oak Creek woman -- and it could happen to you.

For 40 long years, a home in Oak Creek was housing a secret.

"It was all we could afford and I like it right there," Elsie Despins said.

By the time Elsie Despins and her husband, Arthur bought the house, their children were already grown.

Arthur is long gone, and Elsie is 97.

"The doctor said that she needed full-time care and she was really unable to live by herself," Elsie's son-in-law Bruce Schmidt said.

Schmidt and Elsie's daughter, Pat decided to move her to an assisted living facility.

"So now what do you do with the home?" Schmidt said.

They put the house on the market, where it sat for nearly a year. When a buyer finally came along with an officer, they were eager to close the deal. After all, assisted living isn't cheap.

"I don't think the family really felt like they had a choice. It was there. This is, you know, we had to do this. You had to go through with it," Schmidt said.

It wasn't until Pat Schmidt was sitting at the closing table, ready to sign the house away when she learned the old home had a ghost.

"My wife brought the papers home. I looked at the papers and said 'what's this $2,200 defer payment to Oak Creek?' She says, 'I don't really know,'" Bruce Schmidt said.

The city of Oak Creek had dredged up a pair of ancient tax debts -- $855 for sewer work, and another $1,425 for watermains for a total of $2,280 in special assessments for projects that took place back in 1974.

"My husband took care of all of that. Where the money was -- I left that all up to him," Elsie Despins said.

The thing is -- Arthur and Elsie didn't buy the home until 1985 -- 11 years later! As it turns out, no one ever told them about that old, forgotten tax bill -- until now!

"They are upset about it, and we can understand why that is the case. It clearly is a difficult situation," Oak Creek City Administrator Gary Peterson said.

Peterson says the old tax bill comes from something called a "deferred special assessment."

"It would not be the way we do it today," Peterson said.

When cities need to pay for a public project, like a new road or bridge, they usually tax everyone -- but for localized projects, they sometimes issue a special tax that applies only to the property owners who benefit from that project.

In 1974, Oak Creek tapped homeowners along Chicago Road to pay for improvements to their watermains and sewers. Some homeowners, presumably those who couldn't afford the bill, were given a deferment. In other words, city officials said "you can pay it later" -- but they failed to specify when.

"By today's standards it seems strange, but we can't judge what happened in 1974 by today's standards. We weren't there," Peterson said.

Normally, Peterson says special assessments have to be paid either up front or in a series of installments -- or when there is some kind of triggering event, such as a sale of the property. When Elsie and Arthur Despins bought the house in the 1980s, the previous owners were never required to pay off the old tax bill.

That bill sat unpaid for another 29 years.

"I understand that the city was owed money for this sewer and water. But, where they're trying to get the money or where they end up getting the money is just plain black and white wrong," Bruce Schmidt said.

Peterson says it was the city's relatively new finance director who uncovered the old debt while doing a search of paper records as part of a request made by the title company.

Peterson says the city "routinely" gets these requests. He says having something from 40 years ago surface like this "doesn't happen a lot."

"But, I mean, we have hundreds of these outstanding special assessments," Peterson said.

Peterson says what happened to Elsie Despins -- could very well happen to others.

"Are there 30? 300? How far back do they go? What`s the total outstanding?" Peterson said.

Pat and Bruce Schmidt say they want the city to give them their money back -- even going to their alderman for help.

"He did call me back and he says, 'I'm sorry to say. I can't do nothing for ya,'" Bruce Schmidt said.

We don't have the ability to write that off," Peterson said.

Peterson says it wasn't the city that insisted the old tax bill be paid -- but rather, the title company. Now that city officials have the money in hand, they intend to keep it.

"All of sudden, 'okay, we have your money now.' So, what are you going to do about it?" Bruce Schmidt said.

Bruce Schmidt says he understands that someone ought to pay the bill -- just not a 97-year-old widow who never knew her house was haunted by someone else's debt.

"Doesn`t sound fair, does it?" Elsie Despins said.

"If it's not fair for these folks to pay for this, then who is paying for it?" Peterson said.

"It's just wrong. It really is wrong," Bruce Schmidt said.

Peterson says this case has identified a troubling issue, and because of that, they plan to do a comprehensive search of old paper records to find out just how many unpaid special assessments are still on the books. That process could take up to six months. At that time, he says, they will ask the Common Council to determine what their policy should be in regards to collecting on these ancient debts.