Auctions Will Spur New Development; Property Owners Can Pay Taxes & Fees Owed to Stop Sale
NEW ORLEANS – February 24, 2015 – (RealEstateRama) — In March 2015, the City of New Orleans will begin taking the necesssary steps to sell about 3,000 adjudicated properties across the city through a new online auction process. The sale will provide winning bidders with full ownership of each property and with guaranteed title insurance. This is the City’s first adjudicated property sale in many years, and it is the City’s first time using an online auction to sell adjudicated properties. The first online auctions are expected to take place this summer.
“These auctions will help spur new development, reduce blight and strengthen communities across New Orleans,” said Mayor Mitch Landrieu. “As we continue to rebuild New Orleans back stronger and better than before, this is another major step in reviving economic activity across our city. The City will not only collect important revenue, but we’ll be able to encourage new construction and new development in many neighborhoods throughout New Orleans.”
A property is adjudicated to the City when its property taxes have not been paid – becoming delinquent – and the City is unable sell the property at a tax sale. The City will only auction properties where five years have elapsed from the date of an attempted tax sale.
“This is a pioneering effort to move thousands of tax adjudicated properties back to into commerce with an innovative online auction model,” said First Deputy Mayor & Chief Administrative Officer Andy Kopplin. “We are making this process as fair, efficient and transparent as possible. We have already given adjudicated property owners ample time to get caught up on their delinquent taxes and will give them more notices leading up to the sales. These adjudication sales will help the City recoup important revenue to fund essential City priorities, like support for our NOPD officers. At the same time, we are also helping to fight blight and spur new investment in neighborhoods all over New Orleans.”
All adjudicated property owners have received multiple notices of taxes owed. There is also a legally-mandated 90-day notification period once the auction process begins for a property. At that point, all owners and interested parties will receive first-class and certified notices of sales. Finally, one general notice publication and two sale advertisements will appear in local newspapers. During that 90-day notification period, owners of adjudicated properties will have the opportunity to pay their delinquent taxes and fees to stop the sale. Once the 90-day period expires and the property is successfully auctioned and sold, all adjudicated property owners, as well as those who have a recorded interest in a delinquent property, will forfeit all rights to the property.
Beginning March 6, 2015, at noon, the City of New Orleans will list about 3,000 adjudicated properties for sale online at http://www.CivicSource.com external link. These properties will be plotted on a map and each property will include a detailed description. The earliest possible auction date will take place in July due to the mandatory 90-day notification period.
A key goal of the adjudicated property auction is to provide a guarantee of title insurance to the winning bidder through First American Title Insurance Company. In order to undertake the legal research to provide the guarantee, there will be a two-step process for each property:
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 $650 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 90 days to complete. If, during the 90-day pre-sale period, the current property owner pays all delinquent taxes and fees, 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, the auction date is set and the depositors are notified. When the auction goes live, the depositors place their bids and a regular online auction takes place. The minimum starting price will include 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 First American Title insurance Company. Losing bidders will be refunded their $650 deposit.
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.
