Whether you realize it or not, now - right now – and through Thursday evening at 8 PM, the almost annual Orleans Parish Tax Sale is taking place via CivicSource.com. It’s a big deal for many reasons, but also it can be rather fascinating if you’re a fan of Crescent City dwellings as well as archaic governmental proceedings. Here’s why: you bid down.
It’s the same dollar amount to all bidders, but you bid down percentage of ownership. Therefore conceivably one willing to purchase 1% of any given property’s tax year(s) becomes the de facto winning bidder and cannot be outbid, however they are settling for the smallest possible amount of ownership. Very New Orleans, right?
Very Louisiana is more accurate. It’s a state guideline. Some say it’s to protect the delinquent to the second or third tier of excisement, because you see, even after you purchase, the titled party possesses and retains the opportunity to redeem for years to come. In short, these tax sales do not behoove the impatient or the faint of heart.
Personally, I don’t see a big difference between 99% and 1% in this matter; you either take the whole enchilada or you don’t. Attorneys that have a taste for these matters will encourage bidders to stick to 100%, and if some one outbids you to 99%, then keep on shopping. One such attorney is Ryan Scafidel of Audubon Title in MidCity.
“Our method is downright tax debtor friendly since the tax sale debtor can sometimes keep up to 99% of the ownership,” he stated by email. “I am not saying it’s the best method, and I know that some legal eagles have had discussions about amending the State Constitution.” In my opinion an amendment isn’t just a druther, it’s an imperative. Why shouldn’t we?
For clarity, this process isn’t wholly about the possibility of taking over property as many investors simply use it as a vehicle to gain a high rate of interest on their money. And hey, if they happen to secure real estate instead then even better.
But let’s talk nuts and bolts here with an example. Say a $100k property with a delinquent tax bill of $500 is up for grabs. You bid 100% for the delinquent tax year, and if no one down bids it to 99% or lower, you pay the $500. Keep in mind, you’re only buying one tax year, and not the entire property per se. At times there will be additional tax years too, so possibly expect that.
But it’s $500 regardless if it’s 1% or 100%, and it’s really only the beginning of the journey should you be the successful bidder as the process is an ongoing one and future tax years must be paid and linear time must pass before any potential possession or claim to title can be formally, legally put into motion.
Do you really want to keep bidding it down against other bidders. 98% to 97% to wherever. Some go straight to the bone and go to 1%. Easily the worst position to be in would be 2% because you can’t outbid someone after they cut you away and they choose 1%. Which is why I think an amendment needs to be queued. The whole process makes little sense and slothly shuffles muddied title around.
Be done with it. Or embrace it. Until the law changes, hold your breath. And if you have the stomach for it, do it. But if you do decide to participate and you do happen to be successful in bidding at whatever percent, do seek the expertise of an seasoned lawyer that can help you navigate these waters. Yes, there’re legal costs there too, but would you rather hire a professional to help on the front end or hire one to help you repair any missteps? I’ll take the former. Happy bidding!
Jean-Paul Villere is the owner of Villere Realty and Du Mois Gallery on Freret Street and a married father of four girls. In addition to his Wednesday column at UptownMessenger.com, he also shares his family’s adventures sometimes via pedicab or bicycle on Facebook, Twitter, and YouTube.