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Politics & Government

State lawmakers discuss transparency over proposed online auction system

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Roman Battaglia
/
Delaware Public Media

State lawmakers seek to overhaul real estate auctions. 

 

But some members of the House Judiciary committee have concerns about transparency.

 

State Rep. John Mitchell (D-Elsmere) says sheriffs have discovered lots of inflexibility around the current real estate auction system since the COVID-19 pandemic.

 

His bill would expand the options available to the sheriffs, including the use of an online auction system to sell off foreclosed properties.

 

But Mitchell’s bill faced pushback from members of the committee, including State Rep. Jeffery Spiegelman (R-Clayton), over the online auction portion.

 

“I do have the concern about a bit of consolidation from out of state companies who would come in and perhaps take advantage of the sheriffs sales in order to start to conglomerate huge blocks of Delaware property to an out of state company,” Spiegelman said.

 

Spiegelman says the current in person format helps to ensure most of the property sales go to Delaware residents.

 

Some members of the public added that large companies could hide behind the online auction format and leave people in the dark over who’s buying the property.

 

Don Gouge is a real estate lawyer in Wilmington who says those concerns can be addressed.

 

“We don’t know how it’s gonna play out,” he said. “But I think we can alleviate that to some extent with the legislation in requiring one of the comments made about making sure they have a Delaware contact, I don’t see any problem with that.”

 

Both Mitchell and sheriffs agreed to work on increasing transparency, which could include requiring bidders to have an in-state representative, and increased government oversight if it’s discovered a company is trying to buy up large chunks of land.

 

Mitchell notes the online auction system is only being considered in New Castle County right now, and in-person auctions would still be used by the sheriffs departments when needed.

 

The bill was released by the committee, and heads to the House floor.

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