Tax Sales

Ryan Scafidel is a recognized speaker on Tax Sales having presented before various real estate brokerages and the Preservation Resource Center’s home buying program. During the last 15 years, Ryan has represented buyers of tax sales as well as provided counsel and assistance with the curative issues associated with tax sales.

 

To set up an appointment, contact Ryan today.

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So you purchased a property at a Louisiana Tax Sale, now what?

After a tax sale, the owner of the specific property subject to the tax sale can “redeem the property” which, in Louisiana, means getting full ownership back. The owner has a period of three years from the date the tax sale certificate is recorded at the courthouse.  This is important because many people believe the date is from the auction date.  Keep in mind – at this point a tax sale purchaser does not own the property –only the tax sale deed. 

Earning over 12% a year

In New Orleans, in an attempt to stem the pervasive blight, the redemptive period is shortened to eighteen months if you purchase blighted or abandoned property. An owner has to pay the price you paid (including any taxes you have paid on the property since the tax sale) plus a 5% penalty, plus 1% interest per month and whatever costs the tax collector imposes for the transaction to effect redemption. 

In the first year, you earn 1% per month plus the 5% penalty for a grand total of 17% in the first year.  If there is a negative to this situation, you have to consider the following:

  1. That you are tied to the property for at least 3 years of uncertainty (albeit with some nice interest);
  2. There is always a possibility that the subject property is not being maintained and could slide into the blighted category.  If that is the case, you may be forced to begin maintaining the structure and paying for improvements to keep the property up to code.

How to Quiet Title

What do you do after the 3 year or 18 months month redemptive period has passed? You have to file a suit to quiet the title. The quieting tax title process involves hiring an attorney and performing exhaustive title research to determine who the former owners of the property and all other interested parties are. The tax sale purchaser must provide those owners and parties with notice and then request the court terminate their ownership or interests and recognize yours. Once the previous owners are served with your lawsuit, they have six months to try to annul the tax sale.  If they are unable to do so, the court should award you the title.