Tax auction blunder resolved: Couple sells mistakenly acquired land for $26,000; reflects on bureaucratic ordeal and lessons learned

In San Francisco, a couple accidentally bought a side street at a tax auction for $25,000 and later resold it for $26,000, CBS News reported. Homeowners JJ Hollingsworth and Alemayehu Mergia spent remorseful months after a sealed bid they won mistakenly gave them keys to a 83-foot-by-7-foot strip of land rather than the neighboring $1 million duplex. The recent private transaction concludes their exhausting bureaucratic ordeal with the city's tax collector's office.The couple was initially misled by a sealed-bid auction notice from the San Francisco Treasurer and Tax Collector for the property at 1926 Kirkham St. Believing they were bidding on a two-unit rental building, they submitted a $25,000 cashier's check and an $8,000 transfer tax check, calculated based on the home's roughly $1 million value, as they say they were advised to do by the city. Hollingsworth said they would have always regretted not seizing the moment, wondering what could have happened otherwise.Misleading caused celebration and devastation at the same timeBelieving themselves to be the new owners, the couple celebrated with family and friends and even dropped by the Kirkham Street duplex to introduce themselves to the tenants. However, the reality of the mix-up seeped in when the city returned all of their $8,000 transfer tax. This brought about the realization that instead of the duplex they owned an unusable fire lane called the "Dirt Alley".Maintaining their position, municipal tax officials through Amanda Kahn Fried, chief of policy and communications claimed that all documents related to public auction were clearly identified and flagged the plots as unusable by their size, location, or other conditions. A sealed auction included 47 plots, out of which half of them were already sold. Four of those plots were offloaded for just $1 apiece, while the rest generated a sum ranging from $10 to $11,000. The couple's $25,000 bid was much higher in comparison to any other winning bid in the auction.San Francisco's Board of Supervisors is notorious for never reversing tax sales, doing so only once, in the 2017 Presidio Terrace case, per Board of Supervisors File No. 171281. The couple remained in legal limbo until the stalemate finally broke when a private buyer approached them with an unexpected inquiry.An artist concludes the real estate debacleThings took a turn for the better when Hollingsworth unexpectedly received a written letter from an interested buyer, an artist who explained he wanted to purchase the parcel. While initially dubious of the request, a subsequent meeting was enough to ease all of the qualms Hollingsworth had. When told by the potential buyer that his endeavor is to paint a quilt in the alley, it was enough to get Hollingsworth on board.Before signing off the $26,000 contract, Hollingsworth took the aid of an attorney to thoroughly vet the buyer to look for any checkered history. The deal was finalized with legal provisions added directly to the deed, which ensured the couple and their surrounding neighbors maintain permanent physical access to the lane.The closure of the sale brought immense elation to the household, concluding a period of eager anticipation. Mergia described feeling a strong sense of relief following the closing. Despite a good ending to close off such an ordeal the couple remain highly critical of the city's tax paperwork layout. Hollingsworth said because of the ordeal, she had learned a hard lesson on reading auction paperwork closely, and that she believes the city should learn one too. Even after the mistake was resolved, the property had briefly been listed on Zillow as a sold, one-bedroom, one-bathroom, 850-square-foot residential dwelling, CBS News reported.You use AI every day. Now get your AI Quotient. Take the AIQ test.