Tax Sales – Know Your Rights

Posted on: June 27, 2021

Tax Sales: Know Your Rights  

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What is a tax sale?

A tax title sale is the sale or adjudication of the tax sale title on a property on which delinquent taxes are owed.  These properties are sold to the public at an auction for the amount of delinquent taxes due plus any accrued interest, penalties, costs, and other statutory imposed fees.

How does the tax sale work?

Properties for which past taxes are owed are offered at a public auction for the past due amount.  The tax debtor will be notified in advance by mail, and the sale will be announced to the public through publication in the official journal of the parish more than 30 days before and within 7 days of the opening day of the tax sale.  Properties available for tax sale can be found on https://www.civicsource.com/ They will be subject to an open bidding process and will be available to view starting one month before the opening date. Rather than bidding on the dollar amount, anyone can bid on a percent ownership interest in the property. The bidder willing to pay the total delinquent amount due for the least percent ownership interest will be the successful bidder.

Why is the tax sale happening on the property?

The property is being sold because there are overdue taxes and/or liens associated with the property for the current tax year or previous tax year(s).

How can a homeowner stop a tax sale from taking place on their property?

The homeowner can only prevent the property from being sold at a tax sale if they (1) are a member of the United States military on active duty and notify the parish tax collector of their active military status, pursuant to 50 U.S.C. § 561; (2) pay the overdue taxes and/or liens no later than the day before the opening of the tax sale to the parish assessor; or (3) file for bankruptcy in which an order stopping the tax sale will be issued.

After the tax sale occurs what happens next?

After the successful tax sale, the winning bidder needs to record the tax sale in the parish mortgage office.  The homeowner then has three years from that date to redeem the property (18 months in Orleans Parish if the property is legally blighted or abandoned) by paying all the amounts owed to the Assessor’s office.  This would include the tax sale purchase price, plus a five percent (5%) penalty and one percent (1%) interest per month from the date of the tax sale until the date of redemption.

After the tax sale does the homeowner still own his house?

Yes, the ownership of the house does not change with the tax sale.  However, during this time all notices from the Assessor’s office for the property taxes are sent to the tax sale purchaser.  If a subsequent year’s property taxes are not paid, another tax sale auction could be held on the property.

Can the homeowner be evicted from his house after a tax sale?

No, since the ownership of the house is still with the homeowner and not the tax sale purchaser.  This fact should defeat any eviction attempt.

What if the property was purchased at the tax sale with less than 100% interest?

The tax sale is still a valid sale but the tax sale purchaser only owns the percentage of the tax sale that he paid for.  If the property is not timely redeemed and becomes subject to a Quiet Title lawsuit, the property will have to be sold at public auction and the proceeds will be paid to the tax sale purchaser at their bid percentage.  The homeowner would receive the remaining funds, but the ownership of the house would be lost due to the sale at auction.

Can a family member or other third party redeem the property? 

Yes, any person may redeem tax sale title to property, but the redemption shall be in the name of the homeowner.

What happens if the homeowner fails to redeem the tax sale within the allowed time period?

If the tax sale property is not redeemed within the redemptive period, full ownership of the tax sale property, free of ownership and other interests, claims or encumbrances can be obtained by the filing of a lawsuit to Quiet Title in the parish court where the property is located.  The homeowner and all other interested parties will have to be served with the lawsuit.

Can the homeowner still redeem the tax sale property after getting sued in a Quiet Title lawsuit?

Depends.  First, the redemption will no longer be voluntarily since the redemption period has ended.  If a Quiet Title lawsuit has been filed, then the property rights will be determined in this lawsuit.  At this time, the homeowner can negotiate with the tax sale purchaser to keep his property.  But, the tax sale purchaser can demand any price to settle this matter.

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