Updated October 13, 2022
What is a tax sale?
If you own your home or other property, you can lose it if you don’t pay your property taxes. If you do not pay, the government can sell your property for the amount of taxes owed plus some other fees. This is called a “tax sale.”
There are complicated rules about how a tax sale affects the homeowner. There are things a homeowner can do to avoid a sale. There are also things a homeowner can do after a tax sale to get back full legal rights and to undo the problems created by the tax sale.
Why is the tax sale happening on the property?
The government can hold a tax sale on a property if there are unpaid taxes.
The government can also hold a sale if it has another kind of “lien” on the property. A lien is a debt charged against the property.
A “lien” can happen, for example, if the government cuts the grass when the owner doesn’t take care of his or her home or because of other fines for not taking care of the property.
What happens at the tax sale?
The government puts the property up for auction. The asking price is the amount of the unpaid taxes, plus some fees and interest owed.
The government should give the homeowner notice of the tax sale ahead of time. There are rules about how much advance notice the homeowner should get.
The government will advertise the sale to the public.
This ad will appear in what is called the “official journal” for that parish. This might be the local newspaper.
The tax sales are also advertised on https://www.civicsource.com.
Once the tax sale starts, people can offer bids for all or even a part of the unpaid tax bill. If they offer to pay only part of the tax bill, the bidder could get only part of the property. Usually someone pays the whole bill to get a claim to your whole property.
If no one pays to buy the property, the government gets rights to the property. When the government gets rights the property is called “adjudicated.”
How can a homeowner stop a tax sale on their property?
Sometimes someone who owes property taxes can stop the tax sale.
There are three things a homeowner can do to stop a tax sale.
Does the original homeowner still own the house after a tax sale?
Yes, the ownership of the house does not change with the tax sale alone.
The person who bought the property must “record” the sale at the mortgage office. The property owner who owed taxes still owns the property for 3 years after the sale is recorded. (If Orleans Parish ended up with the property after the tax sale, and the property is blighted or abandoned the time can be 18 months.)
The property owner owing taxes can keep the property by paying the the government the original taxes and fees, plus any other taxes the tax buyer paid after the tax sale, plus 6% in fees and penalties. The property owner who owed the taxes and makes all of these payments gets a “Certificate of Redemption” restoring full rights to the property.
Unless the property owner is dead and there has been no succession, the government is required to send a notice 90 days before the end of the three-year period. The notice should say how much is owed and how to “redeem” the property. You can get copies of all notices sent by the tax collector from the parish assessor’s office.
If you redeem the property you get all your rights back. If you do not, the tax sale buyer can then get all the rights to the property, force you to move, and so on.
During those three years the buyer at the tax sale should get the property tax bills.
If more property taxes go unpaid, the property can go up for auction at a new tax sale.
Can the homeowner be evicted from his house after a tax sale?
Not right away. The original homeowner still owns the home, not the not the tax sale buyer.
Except for blighted properties, the original homeowner should be safe from eviction for the first three years after the tax sale.
Can a family member or other third party undo the tax sale by paying what is owed?
Yes. Anyone can pay the taxes, penalties, interest and other fees owed to undo the tax sale. The redemption will be for the property owner, regardless of who paid the money.
What happens if the homeowner fails to redeem the tax sale in time?
The original homeowner only gets a certain amount of time to pay to undo the tax sale by redeeming the property.
If the homeowner does not pay by the deadline to undo the tax sale, the homeowner can lose the property.
The buyer at the tax sale can get full ownership of the property by going to court. This is called a suit to “quiet title.”
The court suit to quiet title can end all rights of everybody but the tax sale buyer .
If the tax sale buyer files court papers to quiet title, he or she must use the correct legal way to deliver copies of the court papers to the homeowner and anyone else with an interest in the property. To see if an error was made that can be challenged, the homeowner should contact an attorney as soon as possible. The time allowed for a challenge depends on the type of error.
But if no one opens the door to accept the court papers, the buyer can get court permission to serve the papers on a special attorney, and you can lose your property without knowing about it.
Can the homeowner still redeem the tax sale property after getting sued in a Quiet Title lawsuit?
Maybe or maybe not. The court case can make it very hard or impossible for the homeowner to keep the property. The homeowner can try to make a deal with the tax sale buyer. The tax sale buyer can ask any price for the property, which can be bad for the homeowner. They can demand much more money than a timely redemption would have cost.
What if only a part of the property was purchased at the tax?
The tax sale is still a valid sale but the tax sale buyer can only get part interest in the home or property. If the property is not redeemed, the property can be sold at public auction and part of the proceeds will be paid to the tax sale buyer. The homeowner would receive any remaining funds. But the property owner loses the house or property because it gets sold at auction.
What if no one buys the property at the tax sale?
Then the government that was owed taxes gets rights to the property. The homeowner has a right to reclaim it by catching up with taxes and fees like those described above. But the time lines and options depend on how the city or parish wants to deal with the property. There are laws that the government may fail to follow. But the rules are more complex than if the property was purchased. Unless the property owner is dead and there has been no succession, the government is required to send a notice about how to redeem the property.
For more information on this process, see the following laws:
Tax Sales (La. R.S. 47:2121 et. Seq.) - http://legis.la.gov/Legis/law.aspx?d=631505
Tax Sale Certificate (La. R.S. 47:2155) – http://legis.la.gov/Legis/Law.aspx?d=631551
Adjudication Property Sales (La. R.S. 47:2196) - http://legis.la.gov/Legis/Law.aspx?p=y&d=631575
Tax Sale Auction and Notices (La. R.S. 47:2153) - http://legis.la.gov/Legis/Law.aspx?p=y&d=631545
Post Sale Notices (La. R.S. 47:2156 - http://legis.la.gov/Legis/Law.aspx?d=631552
Redemption of Tax Sale (La. R.S. 47:2241 et. Seq.) - http://legis.la.gov/Legis/Law.aspx?p=y&d=631596
Redemption Certificate (La. R.S. 47:2245) - https://legis.la.gov/Legis/Law.aspx?d=631613
Post Redemption Period Notice (La. R.S. 47:2157) - http://legis.la.gov/Legis/Law.aspx?d=631556
Quiet Title Process (La. R.S. 47:2266) - https://legis.la.gov/Legis/Law.aspx?d=631617
Quiet Title Notice (La. R.S. 47:2275) - https://legis.la.gov/Legis/Law.aspx?d=631622
Procedure to Annul Tax Sale (La. R.S. 47:2286 et. Seq.) - https://legis.la.gov/Legis/Law.aspx?d=631628
Nullity grounds (La. R.S. 47:2286 et. seq.) - https://legis.la.gov/Legis/Law.aspx?p=y&d=631628
I received a check in the mail made out to me. Should I cash it?
Not necessarily. Be sure to read all the fine print to determine whether the check is a refund from a reliable agency such as the Internal Revenue Service or it is a common “Live Check Loan.”
What is a live check loan?
A live check loan is a loan offer sent by lending agencies to pre-approved borrowers offering a small loan, usually $500-$2500, typically at very high interest rates often above 25% APR. This loan offer will include a check made out to you ready to cash. Live check loans should also include: a disclosure of the loan fees, the annual percentage rate (APR), the payment schedule, the loan agreement, a privacy notice about the sharing of your personal information, your right to exclude your name from future offers – called an opt-out notice, and contact information for the sender. Upon cashing or depositing the check, you are accepting all the terms and conditions attached to the loan. Be sure to read the fine print included with this check to determine whether this loan is right for you.
Is this pre-approved loan offer a scam?
Scammers sometimes send fake loan offers via mail, email, or text. These may look very similar to actual live check loan offers, but they are used to get your personal or financial information in order to commit identity theft or fraud. If the loan asks you to send money, personal, or financial information in return, it is most likely a scam. Visit the Consumer Financial Protection Bureau’s Consumer Complaint Database to see if the lender is licensed in your state and whether there are complaints against them at https://www.consumerfinance.gov/data-research/consumer-complaints/ If you think this offer is a scam, you can report it to the Federal Trade Commission at https://reportfraud.ftc.gov/#/
How does a live check work?
If you want to accept the live check loan, you must endorse the check by signing the back of the check and cashing or depositing the funds into your bank account. This creates a loan agreement that you must repay with interest in accordance with the payment plan included. If you pay late or do not pay, you may be charged fees along with interest, and the lender may report your debt to a credit reporting agency which could affect your credit score. To reject the loan offer, you should securely destroy—by shredding and throwing away—the live check to avoid potential fraudulent use by others.
How do I determine if I should accept this loan offer?
Live check loans may be convenient since you do not have to complete a loan application or file paperwork. However, live check loans may have much higher interest rates than other loans or credit cards. If you are interested in a loan or line of credit, you should follow these few simple steps:
What should I do with this live check?
If you decide that you want to accept the loan offer, simply endorse the back of the check with your signature and cash or deposit the check to your bank account.
If you decide that you do not want to accept the loan offer, rip up the check and throw it away. If you do not destroy the check before throwing it away, you risk someone cashing the check in your name and becoming responsible for a loan you did not receive.
How do I stop these unsolicited loan offers?
If you do not want to receive live checks or other unsolicited loan offers, you have the right under the Fair Credit Reporting Act to opt out of future offers for five years or permanently. To opt out for five years, call 1-888-5-OPTOUT (1-888-567-8688) or visit https://www.optoutprescreen.com/?rf=t To opt out permanently, visit https://www.optoutprescreen.com/?rf=t and return a signed “Permanent Opt-Out Election form,” which they will send after you make the request.
I already cashed the check. What do I do now?
Upon cashing the check, you became bound to the terms and conditions of the loan offer. If you cannot afford the payments as described in the offer, contact the lender about possible options to repay your loan. If you pay late or do not pay without reaching an agreement with the lender, they may charge fees along with interest, report your debt to a credit reporting agency, or take action to garnish your wages or seize your property.
Scammers will stop at nothing to attempt to get personal information from vulnerable people looking for help in a crisis. Here are some common COVID-19 related scams and how to protect yourself from them.
Funeral expense scams
If you lost a loved one to COVID-19, you may be eligible for a government program that pays for funeral expenses. The Federal Emergency Management Agency (FEMA) will pay up to $9,000 for funeral expenses for loved ones who died of COVID-19. Survivors can apply for benefits by contacting FEMA, toll-free, at 844-684-6333. To find out if you qualify, read FEMA’s Funeral Assistance FAQs, also available in many other languages.
FEMA reports that scammers are contacting people and pretending to offer to register them for funeral expense benefits.
What to do: To avoid government imposter scams, here are some tips:
If you think you got a scam call, hang up and report it to the FEMA Helpline at 800-621-3362 or the Federal Trade Commission at ReportFraud.ftc.gov .
COVID-19 vaccine scams
As the COVID-19 vaccine is rolled out throughout the country, it is important to be on the lookout for scams. Beware of scams offering early access to vaccines for a fee. Do not share your personal or financial information if someone calls, texts, or emails you promising to get you the vaccine for a fee. Also, keep in mind that Medicare covers the cost of the COVID-19 vaccine. COVID-19 vaccines are also free to others throughout the country, although providers may charge an administration fee.
What to do: For the latest vaccine updates, check with the Centers for Disease Control & Prevention (CDC) .
COVID-19 cure, air filters, and testing scams
The FTC warned about an increasing number of scams related to test kits, cures or treatments, and air filter systems designed to remove COVID-19 from the air in your home. If you receive a phone call, email, text message, or letter with claims to sell you any of these items–it’s a scam.
What to do: Testing is available through local and state governments or through your medical providers.
Fake coronavirus-related charity scams
A charity scam is when a thief poses as a real charity or makes up the name of a charity that sounds real to get money from you. Be careful about any charity calling you asking for donations. And be wary if you get a call following up on a donation pledge that you don’t remember making–it could be a scam.
What to do: If you are able to help financially, visit the website of the organization of your choice to make sure your money is going to the right place.
"Person in need" scams
Scammers could use the circumstances of the coronavirus to pose as a grandchild, relative or friend who claims to be ill, stranded in another state or foreign country, or otherwise in trouble, and ask you to send money. They may ask you to send cash by mail or buy gift cards. These scammers often beg you keep it a secret and act fast before you ask questions.
What to do: Don’t panic! Take a deep breath and get the facts. Hang up and call your grandchild or friend’s phone number to see if the story checks out. You could also call a different friend or relative. Don’t send money unless you’re sure it’s the real person who contacted you.
Scams targeting Social Security benefits
While local Social Security Administration (SSA) offices are closed to the public due to COVID-19 concerns, SSA will not suspend or decrease Social Security benefit payments or Supplemental Security Income payments due to the current COVID-19 pandemic. Scammers may mislead people into believing they need to provide personal information or pay by gift card, wire transfer, internet currency, or by mailing cash to maintain regular benefit payments during this period. Any communication that says SSA will suspend or decrease your benefits due to COVID-19 is a scam, whether you receive it by letter, text, email, or phone call.
What to do: Report Social Security scams to the SSA Inspector General online at oig.ssa.gov .
COVID-19 government imposter scams
Many of us are paying close attention to the guidance from federal, state, and local governments during this COVID-19 health emergency. Unfortunately, scammers are also paying attention. Some are even pretending to be affiliated with the government–just to scam you out of money.
What to do:
Student Loan Debt Relief scams
Scammers are targeting student loan borrowers and may be trying to take advantage of circumstances related to the pandemic and government relief packages. If someone contacts you and asks for personal information or a fee to suspend your student loan payment, it’s a scam. Scammers may also try to claim you are eligible for immediate loan forgiveness with fake promises of loan cancelation through “Biden Loan Forgiveness” or “CARES Act loan forgiveness.” These programs do not exist. Loan forgiveness or discharge of student debt is rare, if someone promises immediate loan forgiveness then it is a scam. Learn more about the other warning signs of a debt relief scam.
To learn more about loan forgiveness or alternative repayment programs, contact your loan servicer.
What to do:
Unemployment benefits scams
Scammers are fraudulently filing unemployment claims using stolen personal identity information. If you receive a 1099-G tax form for unemployment benefits that you didn’t claim or receive, you may be a victim of identity theft. Someone may have used your personal information to receive unemployment benefits without your knowledge.
What to do: Follow these four steps to report unemployment benefits fraud and to protect yourself:
Suspicious transactions and deposits
Some people have reported receiving prepaid cards in the mail with unemployment benefits that they didn’t apply for. Others have reported suspicious transactions and deposits in their bank accounts involving unemployment benefits. Once you receive the funds, a scammer may contact you, pretend to be from the government, and tell you the benefits were deposited by mistake. They will then ask you to send them the money .
What to do: If you receive an unexpected prepaid card for unemployment benefits or see an unexpected deposit from your state in your bank account, report it right away to your state unemployment insurance office and your bank or credit union. If you believe you have been the victim of identity theft, report the incident to your local police and the Federal Trade Commission (FTC) .