Vacant property acquisition

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Beacon of Hope Resource Center's slides on three methods of acquiring vacant property in New Orleans.

Beacon of Hope Resource Center's slides on three methods of acquiring vacant property in New Orleans.

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  • How much money do I need to bid on property?

Transcript

  • 1. 3 Methods to Acquiring Vacant Property in New OrleansBeacon of Hope Tutorial Series *
  • 2. 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
  • 3. 1st Method of Vacant Property Acquisition (slides from TylerGray, City Attorney’s office)CODE LIEN FORECLOSURE
  • 4. Sheriff Sales City of New OrleansCity Attorney’s Office February 7, 2012
  • 5. What Seizures Do Transfers the debtor’s ownership interest Wipes out the debtor’s inferior liens  “Clear Title” Pays off the debtor’s superior liens.
  • 6. 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
  • 7. Writ of Fieri Facias v. Seize and Sell Money Judgment Mortgage/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)
  • 8. 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).
  • 9. 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
  • 10. Administrative Judgment Example of a Judgment Address  Property Description  Violation Address  Mailing Address Owner Administrative Hearing Officer One Time Fine Daily Fines Judgment Rendered Judgment Signed
  • 11. 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
  • 12. 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
  • 13. 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
  • 14. How do I stop the Sheriff Sale Process? Two Options:1. Pay the outstanding the debt owed to the City of New Orleans 1. 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 waiver 1. Criteria: 1. Property Renovated 2. Significant Hardship 3. Enrolled in a State Program 4. Available only to the owner of the property
  • 15. 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- Performance-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
  • 16. Issues Title Issues “Fractured Heirship” Recordation Date of Judgment  Owner sells property after found blighted Banks  Recordation Date of their foreclosure  La. R.S. 13:3888 Acquisitive Prescription  La. R.S. 9:5633
  • 17.  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 tpgray@nola.gov  Miles L. Granderson, 504-658-4380 or mlgranderson@nola.gov  Orleans Parish Sheriff’s Office, Real Estate, 504-679-6380
  • 18. 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.
  • 19. Tax Sales Distinguished Orleans Parish- City conducts its own tax sale. 3 year redemption period Creates 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.
  • 20. YOUR QUESTIONS
  • 21. 2nd Method of Vacant Property AcquisitionNEW ORLEANSREDEVELOPMENT AUTHORITY
  • 22. 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
  • 23. NORA AuctionWhat 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
  • 24. NORA AuctionDay of Auction After Auction• Live Auction-in • Pay all funds within person or online 30 Days• Bids start at $1000 • Begin Rehab/• 10% Down payment Construction within• $500 certified 1yr funds • Receive Insurable Title
  • 25. NORA Auction- Gilmore AuctionGilmore HostsAuction•Go to Gilmore’s website for location, time, and additional information http://gilmoreauction.com/
  • 26. NORA Auction- Map BOH’s WebsiteReceive Infofrom 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
  • 27. NORA- Lot Next DoorContact a NORARepresentative•Adjacent Owner has first right of refusal•Build a house or keep as a side yardSide Yard•Growing Home Program- Receive up to $10,000 for qualified expenses
  • 28. NORA- Community UseContact 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
  • 29. 3rd Method of Vacant Property AcquisitionTAX SALE
  • 30. Tax SaleWhat 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 process http://www.civicsource.com/content/taxtitlesaleguide
  • 31. 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
  • 32. Tax Sale- BOH MapFind a Propertyand 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 Click on the link to go directly to Civic see if it has other Source’s website judgments against it, i.e., code liens. http://www.beaconofhopenola.org/maps
  • 33. Tax Sale- ProcessCivic Source•Create an account•Find a property•Bid on a property- Be aware of the percentage bid•Pay through Civic Source http://www.civicsource.com
  • 34. Tax Sale- ProcessAfter Purchase•Pay taxes for 3 years•Notice the Owner•Maintain Property•Quiet TitleYou should obtainlegal advice as to yourrights and obligations Maintaining the Propertyas a tax sale Pursuant to La. R.S. 47:2158, the tax sale purchaser shall have a privilegepurchaser. 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.
  • 35. 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
  • 36. 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
  • 37. Tax Sale- A Tool to Improve Quality of LifeIdeal Situation• Purchaser Adjoining Owner or Community Group• Property Condition Purchase and keep as a vacant lot• Total Cost in 3 yrs Purchase when cost is reasonable (less than the value of the lot)
  • 38. Contact InformationJason Stopajstopa@beaconofhopenola.orgLaura Mellemlmellem@beaconofhopenola.org504.309.5120145 Robert E. Lee Blvd., Suite 200New Orleans, LA 70124