NEW ORLEANS – (RealEstateRama) — Today at noon, the City of New Orleans will list over 170 new adjudicated properties available for sale at CivicSource.com external link. These properties were adjudicated to the City due to unpaid property taxes. The properties went unsold at tax sale and in many cases have been off the tax rolls for years, not generating annual tax revenues for the City.
Since the City initiated the first online auction in July 2015, the sale of over 650 adjudicated properties throughout New Orleans neighborhoods has brought in almost $13 million in unbudgeted revenue for the City.
“The online auctions through CivicSource.com have been a resounding success for the City,” said Mayor Mitch Landrieu. “By using the City’s Open Data, we’ve turned property auctions into a civic entrepreneurship opportunity that is reducing blight quickly and returning these properties back to commerce and strengthening neighborhoods. In addition, the City is recouping important revenue so we can stay focused on our residents’ priorities of public safety, creating new jobs, fixing our streets and providing our kids enhanced recreational options.”
Hundreds of people have purchased property in New Orleans using the online auction process including local residents, business owners and non-profit organizations.
Jacob Peters, Bayou District Foundation’s Development and Project Coordinator, said, “We found the process to be very streamlined from placing the initial deposit to closing on the properties. Bayou District Foundation was able to purchase properties which aided in building out our holistic community revitalization model in the Gentilly neighborhood.”
Deputy Mayor Jeff Hebert, Chief Administrative Officer and Chief Resilience Officer, said, “Improving the appearance of neighborhoods has positive spillover effects such as increasing residents’ sense of safety and confidence in their neighborhoods. When responsible taxpayers purchase these proprieties, it helps in stabilizing our neighborhoods and our property values. We look forward to continuing these monthly auctions until the City has exhausted its backlog of adjudicated properties.”
The adjudicated properties will be plotted on a map and each property will include a detailed description. Investors will then be able to initiate the legal notification process by placing a $850 deposit on properties they are interested in. The earliest possible auction date will take place in March due to the 120-day pre-sale process. The City will only auction properties where five years have elapsed from the tax sale certificate filing date. The number of properties available for auction in March could change as delinquent property owners pay the taxes and fees due.
A key goal of the adjudicated property auction is to provide title insurance to the winning bidder through US National Title Insurance Company. In order to undertake the legal research to be able to offer an Owner’s Title Insurance Policy, each property has undergone a two-step process:
STEP ONE: THE PRE-SALE RESEARCH & NOTICE PROCESS
When an investor chooses to initiate the auction process on one or more properties, he or she will place a deposit of $850 on each property, which starts the prerequisite legal research and notification process that is required before the auction takes place. The pre-sale process takes approximately 120 days to complete. If the current property owner pays all delinquent taxes and fees during the pre-sale period, the depositor is refunded the deposit and the sale is halted.
STEP TWO: THE AUCTION
If the property is not redeemed by the conclusion of the research and notification period, a US National Title Insurance (USNTI) Company authorized agent reviews the file for total compliance with USNTI’s prescribed underwriting guidelines. Properties that do not meet the guidelines remain in the research and notification processing stage until it is deemed either insurable or uninsurable within those guidelines. In the case of the latter, the property is excluded and the depositor is refunded; for properties that meet the guidelines, the auction date is set and the depositors are notified. When the auction goes live, the depositors and other interested parties place their bids and a regular online auction takes place (bidders do not have to place a deposit in order to bid, but a deposit is required to initiate the research and notification process that must occur before an auction can take place). The minimum starting price for each property includes the cost of the research and legal notifications, closing costs and the cost of the title insurance. Unlike online tax sales, the successful purchaser will own the property free and clear with title insurance guaranteed through US National Title Insurance Company. Losing depositors will be refunded their $850 deposit within a few days.
As properties clear the research and notification processes – and after they have been certified for insurability – they are scheduled for auction on a monthly basis. The City will hold the online auctions for adjudicated properties on the first Wednesday of every month, from 8:00 a.m. to 8:00 p.m., subject to a rolling close in the case of last-minute competitive bidding.
Questions about delinquent taxes and the adjudicated property sale process should be directed to Department of Finance’s Bureau of Treasury by calling toll free 1-888-387-8027.
CivicSource is the leading auctioneer of tax-distressed real estate. From tax sales to adjudicated property auctions, CivicSource digitizes due process compliance to ensure legally valid sales. Founded in 2008, New Orleans based CivicSource has been recognized by Inc. Magazine’s 500|5000 as one of “America’s Fastest Growing Companies” and has been recognized as the one of the Best Places to work in New Orleans for the past five years, receiving the designation “Best Place to Work” in 2014.www.CivicSource.com external link