Tax Collector Cleared of Favoritism on Property Sales

After an eight-month investigation, the Florida Department of Law Enforcement, reporting directly to Gov. Jeb Bush, found no evidence the 85-year-old Wood accepts bids mostly from buyers who promise to pay the highest interest rate on the certificates and ignores buyers who shout out lower rates.

If Wood had violated state law, Bush could have removed him immediately.

The probe started after local television station, WKMG-Channel 6, aired scenes from last year's auction sale, purportedly showing Wood ignoring some bidders in favor of others.

Wood couldn't be reached at GlobeSt.com's publication deadline. But longtime Orange County government associates and local developers/investors who take in the Downtown auctions regularly, tell GlobeSt.com Wood wouldn't risk damaging his reputation by running a rigged sale.

"The man is 85 years old and is starting his 38th straight year as tax collector, probably longer than any other tax collector in the United States, and gets a six-figure salary--he would be insane to break the law with a stupid gig like the one he is accused of," a Winter Park, FL investor who has accumulated a portfolio of rental properties and land parcels from the auctions over a 20-year period, tells GlobeSt.com.

"The one sure thing I can tell you is Earl K. Wood isn't insane," the source says.

Wood was elected tax collector in 1965 and has held the post longer than any of the other 66 county tax collectors in Florida, Tallahassee government records confirm.

This year's week-long tax certificate sales begin May 20. Developers, investors, property owners and would-be real estate tycoons wait for the annual event and pack the tax collector's chambers to bid on the certificates. Often, they have no specific idea of the history of the property, its category (multifamily, office, industrial, retail) or location.

"All we know and mostly care about is being paid the highest interest rate (18% in Florida) when and if the owner decides to take back his property by paying off the county taxes," a Maitland, FL investor who has traveled the tax certificate auction circuit for years tells GlobeSt.com on condition of anonymity.

The certificates are sold to investors willing to wait for the statutory two-year holding period to end before making a claim on the property. At that time, the investor pays the county the delinquent tax amount, plus interest and becomes first in line to bid on the property. Generally, there are no other bidders at that time.

The original owner, however, can pay off the delinquent tax amount, plus interest, any time within the two-year period, and reclaim his/her property. The owner would pay the tax certificate holder whatever interest amount was stated at the sale.

For example, if the annual taxes on a Downtown Orlando multifamily property were $2,000 and the tax certificate bidder agreed to a 10% annual interest payment and was willing to wait for two years to be paid, he/she would net $400 on the certificate.

But the biggest plum would come if and when the property owner didn't reclaim the property and it was purchased for the interest amount and the delinquent tax amount later by the tax certificate holder.