Can a Virginia county collect attorney fees from a property owner who paid off delinquent taxes before the property went to judicial sale, if no court order set the fees?

Plain-English summary

In 1998, Dickenson County hired a private attorney to file a bill in equity for the judicial sale of tax-delinquent land under Va. Code § 58.1-3967. The County paid the attorney roughly $1,600 in fees. The attorney was then appointed to the bench and could not continue. The County did not hire a replacement.

Meanwhile, the property owner entered into a payment agreement with the County Treasurer and paid all the delinquent taxes that were owed. No sale occurred. The bill in equity was stricken from the docket on June 14, 2004, without any court order awarding attorney's fees.

In 2013 (about nine years later), the County Treasurer billed the owner for the $1,600 in attorney's fees the County had paid. The County Attorney asked whether the County had authority to collect from the taxpayer.

The AG said no.

The applicable statutes are in Article 4 of Title 58.1 (Bill in Equity for Sale of Delinquent Tax Lands). Va. Code § 58.1-3965(A) authorizes judicial sale after two years of delinquency and provides that, in addition to the tax, "all other costs, including reasonable attorneys' fees set by the court ... shall be collected if payment is made by the owner in redemption of the real property." Va. Code § 58.1-3974 (redemption) similarly authorizes payment of "all costs including costs of publication and a reasonable attorney fee set by the court."

The qualifier "set by the court" is the operative limit. Without a court order setting the fees, there is no statutory authority to collect them from the taxpayer. The case here was dismissed without any such order. The County's right to collect attorney fees from the taxpayer ended when the case was stricken.

The County Attorney raised a related question about Va. Code § 58.1-3958, which authorizes administrative collection fees for tax collection generally. The AG ruled it inapplicable. Section 58.1-3958 is a general statute for collection activities. Once the locality chose the specific judicial-sale mechanism (the bill in equity), the specific statutes (§§ 58.1-3965, 58.1-3974) controlled, and those required a court order to authorize attorney fee collection.

The interpretive principle: "in construing statutes, if one section addresses a subject in a general way and the other section speaks to part of the same subject in a more specific manner, the latter prevails" (Beard Plumbing). The General Assembly chose specific rules for judicial sales; localities going down that path are stuck with those specific rules.

The Dillon Rule reinforced the conclusion. Localities have only those powers granted them by statute. No statute grants authority to collect uncourt-ordered attorney fees from a redeeming taxpayer. So the authority does not exist.

Currency note

This opinion was issued in 2014 (responding to a 2013-numbered request). Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Localities should look at the current text of Va. Code §§ 58.1-3965, 58.1-3967, 58.1-3974, and 58.1-3958 before relying on a specific collection mechanism.

Common questions

What is a "bill in equity for sale of delinquent tax lands"?
A judicial proceeding under Article 4 of Title 58.1 in which a locality (or its attorney) asks the court to sell tax-delinquent real property to satisfy the unpaid taxes. The property owner has a right to "redeem" (pay all owed amounts before sale) up to the date of sale.

What does "redemption" mean here?
The taxpayer paying off the full amount owed before the judicial sale occurs. Once redeemed, the suit ends and the property remains with the owner.

Why does it matter whether the court "set" the fees?
Because the statute says so. The General Assembly chose to put a procedural check on attorney fee recovery: a court must review and approve the fee before it can be collected. The check protects taxpayers from open-ended fee charges; it also requires the locality to actually pursue the case through to a court order.

What if the case had ended with a court order?
If the case had gone to judgment with an order setting reasonable attorney fees, the locality could have collected those court-set fees from the taxpayer at the time of redemption.

Can the County still pay its attorney?
Yes, that's a separate question. The County's contractual obligation to its attorney is independent of the County's authority to collect from the taxpayer. The County paid the $1,600 in 1998-2004. The question is just whether the County can bill the taxpayer to recover what it paid.

Why doesn't § 58.1-3958 (general collection fees) help here?
Because Virginia courts apply the rule that specific statutes prevail over general ones on the same subject. The locality chose the specific bill-in-equity mechanism, which has its own rules about attorney fees. The general fee statute doesn't override the specific statute's restrictions.

Can the County re-file the suit?
The opinion does not address that question directly. As a practical matter, the underlying taxes were already paid, so there is nothing to sue for. If the County had a separate legal basis for the fees (such as a contractual indemnity from the taxpayer), that would be a different question, but the opinion does not address it.

What if the locality had used a different collection mechanism?
Other collection mechanisms (administrative collection through the Treasurer, third-party agency collection under § 58.1-3958) carry their own fee rules. Each path has its own fee authority. The locality has to live with whichever path it chose at the time.

Background and statutory framework

The statutory pieces:

• Va. Code § 58.1-3965(A): authorizes judicial sale of property delinquent in taxes for two-plus years; provides for collection of "all other costs, including reasonable attorneys' fees set by the court."
• Va. Code § 58.1-3967: bill in equity procedure for judicial sale.
• Va. Code § 58.1-3974: redemption rights; permits payment to redeem "together with all costs including costs of publication and a reasonable attorney fee set by the court."
• Va. Code § 58.1-3975: distribution of proceeds from sale.
• Va. Code § 58.1-3958: general administrative fee for collection activities, not applicable here.

The interpretive moves:

• "Set by the court" is read literally: an actual court order setting the fees is required.
• Specific statutes prevail over general statutes on the same subject matter (Beard Plumbing).
• Dillon Rule limits locality authority to what is granted (Horne, Countryside Investment Co.).
• Where the legislature has chosen specific procedural protections (court-set fee requirement), those protections cannot be circumvented through general statutes.

Citations

• Va. Code § 58.1-3965(A)
• Va. Code § 58.1-3967
• Va. Code § 58.1-3974
• Va. Code § 58.1-3975
• Va. Code § 58.1-3958
• Bd. of Supvrs. v. Horne, 216 Va. 113, 215 S.E.2d 453 (1975)
• Bd. of Supvrs. v. Countryside Inv. Co., 258 Va. 497, 522 S.E.2d 610 (1999)
• Beard Plumbing & Heating v. Thompson Plastics, 254 Va. 240, 491 S.E.2d 731 (1997)

Source

• Landing page: https://www.oag.state.va.us/annual-reports-opinions/official-opinions
• Original PDF: https://www.oag.state.va.us/files/Opinions/2014/13-033_Mullins.pdf

Original opinion text

COMMONWEALTH of VIRGINIA
Office of the Attorney General
Richmond 23219
April 11, 2014

Stephen W. Mullins, Esquire
County Attorney for Dickenson County
Post Office Box 250
Castlewood, Virginia 24224

Dear Mr. Mullins:

I am responding to your request for an official advisory Opinion in accordance with § 2.2-505 of the Code of Virginia.

Issues Presented

You inquire regarding the authority of a locality to collect from a taxpayer attorney's fees incurred by the locality in its efforts to recover delinquent real estate taxes. Specifically, you ask whether such fees are collectable in a situation where suit for judicial sale is initiated by the locality, but the property is redeemed prior to sale, and the case is dismissed with no order providing for attorney's fees.

Response

It is my opinion that when a suit is brought by a private attorney retained by a locality for delinquent taxes and the property is redeemed prior to sale, attorney's fees are collectable only if set by the court.

Background

You relate that, in 1998, Dickenson County engaged the services of an attorney to file suits for the sale of tax-delinquent lands. The attorney filed suit[1] for the sale of one parcel, but was unable to continue his work in the proceedings due to being appointed to a judgeship. The County paid him approximately $1,600.00 in fees for his services up to that point. The County did not hire another attorney to continue the proceedings. You advise further that the owner of the parcel entered into an agreement with the County Treasurer to pay the real estate taxes owed on the property and has paid all of the taxes that had been owed on the parcel. Accordingly, no sale of the property occurred. The suit against the parcel owner was stricken from the docket on June 14, 2004. You state the Treasurer recently billed the owner for the $1,600.00 in attorney's fees.

Applicable Law and Discussion

The governing law applicable to your inquiry is contained in Article 4 of Title 58.1 of the Code of Virginia, entitled "Bill in Equity for Sale of Delinquent Tax Lands."[2] Section 58.1-3965(A) authorizes the sale of real estate "for the purpose of collecting all delinquent taxes on such property" when taxes are owed for more than two years. Section 58.1-3965(A) further provides, in relevant part, that in addition to the tax, "all other costs, including reasonable attorneys' fees set by the court ... shall be collected if payment is made by the owner in redemption of the real property ...."[3] Section 58.1-3974, which deals with such redemption, provides, in relevant part, that an owner "shall have the right to redeem such real estate prior to the date set for a judicial sale thereof by paying into court all taxes, penalties, and interest owed ... together with all costs including costs of publication and a reasonable attorney fee set by the court."[4]

There is no provision related to judicial sales to collect delinquent taxes that allows for recovery of fees that are not set by the court. Accordingly, because the suit for the subject property was dismissed without a court order imposing attorney fees for redemption, there is no authority for collection of the attorney fees under the facts you present.[5]

Although there is statutory authority for imposing an administrative fee when an attorney or collection agency is hired to undertake collection activities generally,[6] that statute is inapplicable here. In your inquiry, the specific collection remedy chosen by the locality was a bill in equity for the sale of delinquent tax lands filed pursuant to the provisions of Article 4 of Title 58.1. As concluded above, this enforcement mechanism requires a court order prior to imposition of an attorney fee in such suits. "In construing statutes, if one section addresses a subject in a general way and the other section speaks to part of the same subject in a more specific manner, the latter prevails."[7]

Conclusion

Accordingly, it is my opinion that when property subject to a judicial sale is redeemed by a taxpayer and there is no court order imposing attorney's fees for the collection of delinquent taxes, any attorney fees charged to the locality may not be assessed against the taxpayer.

With kindest regards, I am

Very truly yours,

Mark R. Herring
Attorney General

[1] Specifically, you relate that the attorney filed a bill in equity pursuant to Va. Code Ann. § 58.1-3967 (2013).

[2] Sections 58.1-3965 through 58.1-3975 (2013).

[3] Emphasis added.

[4] Emphasis added.

[5] In Virginia, localities have only those powers granted them by statute: "In Virginia the powers of boards of supervisors are fixed by statute and are limited to those conferred expressly or by necessary implication. This rule is a corollary to Dillon's Rule that municipal corporations have only those powers expressly granted, those necessarily or fairly implied therefrom, and those that are essential and indispensable." Bd. of Supvrs. v. Horne, 216 Va. 113, 117, 215 S.E.2d 453, 455 (1975) (citations omitted); accord Bd. of Supvrs. v. Countryside Inv. Co., 258 Va. 497, 503, 522 S.E.2d 610, 613 (1999).

[6] See § 58.1-3958 (2013).

[7] Beard Plumbing & Heating v. Thompson Plastics, 254 Va. 240, 245, 491 S.E.2d 731, 734 (1997).