Tax sales: the thirty year headache (due to armchair lawyering).

by Chris on June 11, 2013

In the recent months I’m being reminded over and over about the uncertainty of tax sales in Louisiana. Clients come to me for advice, and it is difficult to turn away (what in the past was) business. Honestly, it is a bit disheartening to turn away prospective clients. Some people react in anger, others in shock, and many many more leave my office frustrated with the courts and judges that have thrown the tax sale field into a flux.

My first gravamen, is the jurisprudential move towards the philosophy that “tax sales are an investment in penalties not property.” Sure, this is a great philosophy for an investor with a million dollars, who will profit nicely from the penalties and interest alone. Most of these investors are not from Louisiana. Most of them are large institutions, with large sums of money to be invested in higher yield interest than banks or traditional investments. And we wonder why Louisiana has a brain drain of youth. Of course, the sheriffs are generating revenue to operate, but ultimately penalties and interests are put back into the hands of out-of-state companies that will never spend a penny in Louisiana.

I’m sure the justices of Louisiana have their hearts and minds in the right place. No one wants to take away someone’s home, and I’m yet to ever see this happen. A majority of the time property sold for taxes have been abandoned, vacant, and a public nuisance. Often times riddled with health and grass liens. It is not uncommon to see property taxed and fined to an amount that far exceeds the value of the property.

But these practical considerations are lost in the court room. This is becoming more and more glaringly obvious with the people of our state. Judges have been sitting in their perch too long, and they no longer know what it means to practice law. Imagine how it feels to practice law for 40 years and appear before judges that have little to no practical experience. These judges are out of touch, and they are more concerned with re-election.

Well here’s a news flash: the billionaires that are content with “taxes and interest” do not care one iota for the state of Louisiana. The average citizen that attends a tax sale is more likely than not, a resident of the state of Louisiana. These are people with a vested interest in their communities. People who do not have a billion dollars to drop in one day. It is Louisiana citizens that are taking their risks with the money they have, to put properties back into commerce.

I will close with advice that it is all too common now. The tax sale field is increasingly becoming more and more difficult. There is a circle of exclusivity that is growing smaller by the day. If you are considering buying property at a tax sale please understand that you will not be able to sell this property for at least 30 years. This is the absurd result when our elected decision makers become out of touch with their constituency.

Stay tuned for more posts about tax sales and the rumored legislation that is pending enactment. If you thought it was bad now…..

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