vacant property acquisition
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Beacon of Hope Resource Center's slides on three methods of acquiring vacant property in New Orleans.TRANSCRIPT
3 Methods to Acquiring Vacant Property in New Orleans
Beacon of Hope Tutorial Series *
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3 Methods to Acquire Vacant Property
• Code Lien Foreclosure- City of New Orleans
• New Orleans Redevelopment Authority (NORA) Auction
• Tax Sale- City of New Orleans
CODE LIEN FORECLOSURE
1st Method of Vacant Property Acquisition (slides from Tyler Gray, City Attorney’s office)
Sheriff Sales
City of New OrleansCity Attorney’s Office
February 7, 2012
What Seizures Do
Transfers the debtor’s ownership interestWipes out the debtor’s inferior liens
“Clear Title”
Pays off the debtor’s superior liens.
Types of Seizure
Writs of Sale and Seizure are almost always foreclosures on mortgages
If a Bank or Mortgage Company’s name appears first in the title of a case, it is almost always a foreclosure on a mortgage.
If “City of New Orleans” appears in the title of a case, then is a City sale of blighted property
Writ of Fieri Facias v. Seize and Sell
Money JudgmentMortgage/Security Interest
Failed mortgages generally have title insurance. A Bank or Mortgage Company is usually the Plaintiff
in Seizure Sales. (Read the title of the case)
City of New Orleans Blighted Property Sales Under Writs of FiFa
Blight is legal determination pursuant to Louisiana Revised Statute 13:2575
Administrative Hearings – Blight/Public Nuisance The New Orleans Code, Chapter 28, Sections 28-7, 28-
39 et seq., and 6-41 Code Enforcement and Hearings Bureau (504) 658-
4301 www.nola.gov
Click Residents Click Code Enforcement http://www.nola.gov/RESIDENTS/Code%20Enforcement/
Law that allows the City can seize and sell property pursuant to R.S. 13:2576(A)(1)(a)(i).
City of New Orleans Sheriff Sale Process
Applies only to Unoccupied Property Chapter 28 of the New Orleans Code at Section 28-6 Minimum standards for unoccupied property
Section 28-6 to Section 28-36 Blight/Public Nuisance is a legal determination
Section 28-37 Allowing a public nuisance Section 28-38 Allowing a blighted property
Administrative Judgment 30 day appeal period (Sec. 6-41) Judgment recorded in mortgages (Sec. 6-39(a))
Daily fines accrue for 30 Days
Example of a Judgment
Address Property Description Violation Address Mailing Address
OwnerAdministrative
Hearing OfficerOne Time FineDaily FinesJudgment RenderedJudgment Signed
Administrative Judgment
Sheriff Sale Process Continued. . .
City directs Sheriff to seize and sell property Writ of Fieri Facias (Fifa) Filed in Civil District Court
Set the property for sale send deputy for service
Unable to locate Defendant/Owner Appoint a curator under La. CCP 2293 Reset the sale of the property
Sales
First Sale With appraisal – two-thirds of that appraisal (La. CCP
2336) UNLESS debt (taxes and liens) exceed the two-thirds
appraised value (La. CCP 2338)Property Sold
City Granted first lien privilege pursuant to R.S. 9:4821(1)
Mortgage Holders Section 28-58, La. CCP 2373
Original Owner Remaining proceeds – Section 28-58
Second Sales
Property not sold at First Auction Put up a Second time Sold at price sufficient to cover outstanding liens, real
estate taxes and other debts owed to the City La. CCP 2336, 38
How do I stop the Sheriff Sale Process?
Two Options:1. Pay the outstanding the debt owed to the City of
New Orleans1. Contact: Lula Lowe or Ursula Frank in Code Enforcement
1. Payment in Treasury goes to Code Enforcement Liens BEFORE paying the taxes
1. Section 6-39(b)
2. Renovate the property and apply for a lien waiver1. Criteria:
1. Property Renovated2. Significant Hardship3. Enrolled in a State Program4. Available only to the owner of the property
Progress
The City filed 60 writs every two weeks for 2011. Blightstat, City Hall, 8th Floor, Homeland Security Room 8 AM
Monthly Meetings, Feb. 9th, 2012 – next meeting Blightstat reports available on Office of Performance and
Accountability Website www.nola.gov
Click “Chief Administrative Office” Click “Office of Performance and Accountability” www.nola.gov/government/Chief-Administrative-Office/Office-of-P
erformance-and-Accountability October 17, 2010 – Dec. 31, 2011, 1003 writs filed We have started filing writs again for 2012, Approximately 50
to date
We are in the process of scheduling properties for the month of April of 2012.
Next blighted property sales: Feb. 18, Feb. 16, Feb. 23, Mar. 6, Mar. 8
Issues
Title Issues“Fractured Heirship”Recordation Date of Judgment
Owner sells property after found blightedBanks
Recordation Date of their foreclosure La. R.S. 13:3888
Acquisitive Prescription La. R.S. 9:5633
Sheriff’s policies and procedures for regular auctions apply to blighted property sales.
Information Sources: data.nola.gov www.nolaassessor.com www.civilsheriff.com
Additional Information: Please contact or e-mail our Blighted Property Specialists:
Tyler P. Gray, 504-658-4380 or [email protected] Miles L. Granderson, 504-658-4380 or
[email protected] Orleans Parish Sheriff’s Office, Real Estate, 504-679-
6380
Bidding Process on City Blight and Seizure Cases
Sheriff Sales require 10% down at auction, Must have in the courthouse at the time of the auction
If don’t have it, then property re-offered and not allowed to bid
pay the remaining balance within 30 days.Cash or Cashier’s Check is required-No
personal checks or corporate checks.
Tax Sales Distinguished
Orleans Parish- City conducts its own tax sale.
3 year redemption periodCreates liability for tax purchaser.Suit to quiet title must be filed to gain clear
title. With all Sheriff Sales (including city blight
sales), there is no redemption period. A deed will be given to the successful bidder upon payment of the full auction bid.
YOUR QUESTIONS
NEW ORLEANS REDEVELOPMENT AUTHORITY
2nd Method of Vacant Property Acquisition
New Orleans Redevelopment Authority (NORA)
3 Ways to Acquire Property from NORA
• Live Auction- in person or online– Individual who plans to owner occupy or Developer
• Lot Next Door– Adjacent Property Owner
• Community Use – Neighborhood Association, Community Groups, &
Nonprofits
NORA Auction
What is it?• NORA has an inventory of properties
that they auction in phases• Nearly 4000 properties that NORA is
tasked with disposing of were acquired from Road Home buyouts
Day of Auction• Live Auction-in
person or online• Bids start at $1000• 10% Down
payment• $500 certified
funds
After Auction• Pay all funds
within 30 Days• Begin Rehab/
Construction within 1yr
• Receive Insurable Title
NORA Auction
Gilmore Hosts Auction•Go to Gilmore’s website for location, time, and additional information
NORA Auction- Gilmore Auction
http://gilmoreauction.com/
Receive Info from BOH•Go to Beacon of Hope’s website to see latest NORA auction map• Join Beacon of Hope’s newsletter to receive NORA auction updates
http://www.beaconofhopenola.org/maps
NORA Auction- Map BOH’s Website
Contact a NORA Representative•Adjacent Owner has first right of refusal•Build a house or keep as a side yard
Side Yard•Growing Home Program-
Receive up to $10,000 for qualified expenses
NORA- Lot Next Door
Contact a NORARepresentative•Decide on a project- community garden, orchard, or even rainwater mitigation•Secure funding for insurance- If you plan on implementing a community garden call Parkway Partners •Sign a lease with NORA
NORA- Community Use
TAX SALE3rd Method of Vacant Property Acquisition
Tax Sale
What is it?A tax title sale is the sale of properties that have delinquent taxes due and owing the political subdivision. These properties are sold to the public for the amount of delinquent taxes due, plus any accrued interest, penalties, costs and other statutory impositions.
More Information Read Civic Source’s Process Guide on their
website before starting the processhttp://www.civicsource.com/content/taxtitlesaleguide
Tax Sale- Why Purchase a Tax Title
• Investment- If the property is redeemed, the owner pays the purchase price, a 5% penalty, and 1% per month
• Acquire Ownership after the Redemption Period- the owner has 3 years (18 months if blighted) to pay the back taxes, penalties, and interest
• Improve your quality of life- Neighbors or community groups can reduce blight in the short term and have an area after quieting title
Find a Property and Research•Once a year the City conducts a tax sale through Civic Source. •Go to Beacon of Hope’s website to view tax sale properties in you neighborhood.•Research property to see if it has other judgments against it, i.e., code liens.
Tax Sale- BOH Map
Click on the link to go directly to Civic Source’s website
http://www.beaconofhopenola.org/maps
Civic Source
•Create an account•Find a property•Bid on a property- Be aware of the percentage bid•Pay through Civic Source
Tax Sale- Process
http://www.civicsource.com
After Purchase•Pay taxes for 3 years•Notice the Owner•Maintain Property•Quiet Title
You should obtain legal advice as to your rights and obligations as a tax sale purchaser.
Tax Sale- Process
Maintaining the PropertyPursuant to La. R.S. 47:2158, the tax sale purchaser shall have a privilege on the property for the costs of complying with the order of the political subdivision. To preserve this privilege, the purchaser shall file the writ of possession with the recorder of mortgages of the parish in which the property is located within fifteen days after its issuance.
Tax Sale- Reasons for Concern
• Zero return on investment- Owner might not redeem the property
• 3 year redemptive period- It may be too long to wait
• Cost of Maintaining Property- If it is a structure, the cost of maintaining the property may exceed budget. Difficult to recover funds spent on repairing home
• Uninsurable Title- Title insurance (required by banks) may be difficult to obtain
Tax Sale- Concerns Addressed
• Avoid buying a tax sale with a structure on the property
• Have a plan in place if you acquire the property in 3 years- Side yard or community space
• Maintain Property to avoid fines- Code liens will add to the cost of the tax sale
• PurchaserAdjoining Owner or Community Group
• Property ConditionPurchase and keep as a vacant lot
• Total Cost in 3 yrsPurchase when cost is reasonable (less than the value of the lot)
Ideal Situation
Tax Sale- A Tool to Improve Quality of Life
Contact Information
Jason [email protected]
Laura [email protected]
504.309.5120
145 Robert E. Lee Blvd., Suite 200New Orleans, LA 70124