William N. Kellahan, Jr. and Alice H. Kellahan - Page 4




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          represented this to the potential buyers.  Mr. Hardy did not                
          specify the language used in the deeds and did not read the deeds           
          before signing them.                                                        
               The Clarendon County Assessor took the position, apparently            
          based on the language of the deeds, that Mr. Hardy still held               
          title to the land under the Canal waters.2  Consequently,                   
          sometime after Mr. Hardy had sold all the lots, he received a               
          bill from the Clarendon County Tax Collector for property taxes             
          owed on the Canal.  Mr. Hardy did not pay the tax on the Canal,             
          because he did not believe he owned the Canal and because he did            
          not think it had any value.3  As a result of Mr. Hardy’s                    
          delinquency in paying the taxes, the Canal was auctioned by the             
          Clarendon County Tax Collector.  Mr. Hardy subsequently had the             
          opportunity to reacquire title to the Canal if he paid the                  
          delinquent taxes, plus a redemption fee (see below), within 12              
          months.  He did not do so for the same reasons he did not                   
          initially pay the property taxes on the Canal:  He did not                  
          believe he owned it, and he did not think it had any value.                 



               2 This position was later confirmed in August 1990 when, in            
          response to a request from the Clarendon County Tax Collector,              
          the Clarendon County Assessor issued a letter stating that, based           
          on a review of the deeds, “the property owners abutting the canal           
          own down to the water, but no further” and that “the developer              
          (G. H. Hardy) still owned the land under the water.”                        
               3 Mr. Hardy recollected that the amount billed by the                  
          Clarendon County Assessor was in the range of $2,000-3,000.                 




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