Jean-Paul Villere: The new bidder’s guide to Orleans Parish tax sales and auctions

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Jean-Paul Villere

Jean-Paul Villere

The tireless subject of back taxes and property auctions in the New Orleans metro area has once again garnered much buzz in the last week.  True, it is an exciting topic for the Crescent City citizenry at large as we wade through the thankfully diminishing blight, too often witnessing the demise of structure too far gone not to be demolished.  That’s the downside for sure.  The upside?  Seemingly countless blocks are given new looks from fresh eyes.  That said, understanding the what and the how of these processes should demand the lion’s share of your attention if you fancy yourself the real-estate investor type, because well, this ain’t eBay. 

In short, there are three very different processes the public may participate in depending on the time of year:

(1) Sheriff’s Sales. This weekly auction held each and almost every Thursday at noon sharp just steps from City Hall proper has a fairly decent online database (http://www.civilsheriff.com/) and provides a routine example of in-person auctioning of various properties from truly every neighborhood the city over.  The majority of the sales happen to be delinquent mortgages come calling.  However there are times when the city places — and I might add mysteriously so, with no rhyme or reason really discernible — property that may only have back taxes, liens, or judgments without any mortgage issue whatsoever. 

These auctions may be retracted up to the minute of their going up before the masses.  My advice?  Don’t get too excited, but if your interest level is there then attend.  I’ve been a few times over the years, even bid on a few items, but never successfully.  So go; it’s free and open to the public. 

If you anticipate bidding, know: if you are successful you must have (a) 10% on you at that moment (you can’t leave the building, go out to your car to retrieve funds or what have you), and (b) the balance should be provided within 30 days of the auction.  I do know of exceptions here where successful bidders were able to extend that 30 days, but I suggest not to hang your hat on that.  Get it done, and move on.  But know this: all sales are final, you don’t get to inspect the property prior to acquisition, and you may or may not have the opportunity to purchase title insurance.  Take this to heart: buyer beware!

(2) Property Auctions. Last week a big fuss came to a head about the routine property auction that the city holds willy nilly, er, periodically, (you see, there is no annual or set date, they just announce one from time to time). The hubbub came in the form of this: for the first time ever the auction would be held online (as opposed to in-person, which until now that’s how they were done).  Only the auction won’t take place for many months, and the list of property won’t even be published until Friday, March 6. 

With these types of auctions, it is similar to the sheriff’s sale if only because it conveys what one may expect to complete interest and control of the property.  To be sure though, even the Sheriff’s Sales at times only convey a certain level of interest.  The nuts and bolts of retainer funds, the list proper, and timelines will soon be fleshed out on www.civicsource.com, the very same website that for years now has facilitated the city’s tax sale efforts. 

This auction and the sheriff’s sale are a bid up process whereby the highest dollar wins, which remains antipodal to the final category, tax sales.  Why?  Because the tax sales bid down a percentage of ownership for a tax year and the dollar amount remains the same.  Why?  Because that’s the way the law is written is the short answer.  At benefits the delinquent to nth degree, really.  Does it make sense by 2015 standards?  Considering most folks get completely befuddled by its process, I would argue no.  But, it is what it is.  So let’s parse out…

(3) Tax Sales. Again, this bids down percentage of ownership.  So if you want to “win,” go straight to 1%, and no one can outbid you.  But again, buyer beware as you will be settling for the smallest amount of ownership one may have in a property in Louisiana. 

From here it’s a little bit of a waiting game as it places the successful bidder on title, but now the passage of time and subsequent tax years must be paid before any level of possession may take place.  36 months from the date of the sale being filed in the parish – not from the date of the sale itself – and on property not deemed blighted.  Those properties formally acknowledged as blighted have the benefit of only an 18-month period.  Even then, a blight lien may often be viewed as a ticket.  Once it is paid by whomever and whether the blight is remediated or not, the city will then ramp it back up to 36 months.  Once time has passed and more taxes paid the titled party / successful bidder advisably should hire versed counsel in the matter to navigate from there as the possession of the property requires filings, notices, and layers of paperwork — or quite simply a judgment.  

To be sure, this process is lengthy, time consuming, possibly costly, and of higher risk than (1) or (2).  So why do people do it?  Because of interest.  The delinquent – should they redeem the property – reimburse the titled party via the city and not directly a great measure of accrued interest on their dollar.  That or they can conceivably come to possess the property.

That’s kinda it.  If you have an interest in bidding, my advice would be to start small and do not go against your gut.  Ever.  No matter if you pursue (1), (2), and/or (3). There are some absolute horror stories of bungled title and bidders spending tens of thousands of dollars in legal fees trying to possess a property proper.  Conversely, there are some success stories whereby bidders have put property back into commerce at nominal or anticipated costs.  Lastly, I am not a lawyer, so do not take any of this as legal advice.  It is simply my experiences and understanding of these processes.  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.

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