The best strategy for you will depend on the value of the property, your percentage interest, the cost of quieting title, how long you are willing to wait, and whether you want a cash return or title to the property. The best strategy for dealing with a 100% interest in a high-value property will be dramatically different from the best strategy for dealing with a 1% interest in a low-value property. Louisiana Tax Sale Lawyers can help you choose the best strategy based on your objectives and the unique facts surrounding your tax sale. The following strategies may or may not be the best for you.
Late Redemptions — A “late redemption” is a sale of your tax sale interest back to the tax debtor. It is not uncommon for tax debtors to contact you after the redemption period has expired. You can also contact them. The price is negotiable based on the factors mentioned above. A typical starting point is the redemption price plus a premium.
Quieting Title – You will need insurable title to sell or renovate the property. Quieting title requires formally notifying all parties whose interests you want to terminate, such as owners, mortgagees, and other lienholders. After the sending of post-sale notice or service of a quiet title action, interested persons have six months to file a nullity action (60 days if the tax sale is more than five years old). If they don’t file a nullity action on time, you are entitled to a judgment quieting title to your percentage interest. If you have less than a 100% interest, you may need to file a partition action. In a partition action, one co-owner may buy out the other co-owners’ interests. If no agreement can be reached, the court will set a price or the property will be sold at a sheriff’s sale. The proceeds are divided according to each co-owner’s percentage interest.
Nullity Actions – A nullity action may be filed against you – typically in response to a quiet title action. If your tax sale is annulled, you will be entitled to a nullity payment. That will usually be the redemption price plus some noticing and other costs. It will not include attorney fees. Defeating a nullity action (and winning a quiet title action) will depend on when the person bringing the nullity action was “duly notified” of the tax sale and when the nullity action was filed.
Wait and See – Some tax sale purchasers elect to wait and see what happens, allowing interest and penalties to accrue while hoping for a late redemption. If you elect this strategy, be aware of the effects of not paying later years’ taxes.