Catch 22

by Chris on July 2, 2015

Tell me if this sounds familiar: you bought a property at tax sale, now code enforcement is ordering you to appear at administrative hearings and threatening daily fines?

I get a lot of inquires about what to do in this situation. Unfortunately, I don’t have a good solution. My experience with this issue is jaded from my case, Smith v. Brumfield. In that case the tax buyer obtained a court order putting her in possession of property pursuant to La. Rev. Stat. 47:2158. With a signed court order, the plaintiff replaced the roof and repaired the property to the tune of almost $20,000.00. Although the law states a recorded writ of possession operates as a privilege on the property, there was absolutely nothing preventing someone from redeeming the property without reimbursing her for repairs. Low and behold, one day before the 3 year redemptive period elapsed, the tax sale was redeemed. The tax debtor said “thank you for the new roof, now go away.” Shortly thereafter, the property was listed for sale “brand new roof.”

The court refused to grant an injunction to protect the plaintiff’s rights. And, despite having a signed court order and a recorded lien, the trial court judge opined that once the property is redeemed, the rights of the tax buyer also evaporate–to which the Fourth Circuit agreed. Once dispossessed, Ms. Smith tried to get reimbursed for her expenses. This did not bode well either.

For anyone who faces this predicament, I also point out provisions of La. Rev. Stat. 47:2161:

Notwithstanding any other provision of law to the contrary, in the City of New Orleans, if a tax sale purchaser has made improvements to abandoned or blighted property. . .in order to bring the property into compliance with one or more municipal code ordinances prior to the property being redeemed, the person redeeming the property shall reiburse the tax sale purchaser for the costs of improvements required to bring the property into compliance. . .the maximum amount of reimbursement for improvements shall be fifteen hundred dollars for abandoned property and three thousand dollars for blighted property. The maximum amount shall be per property per year.

If you’re still wondering if you should go make those repairs, asks yourself: what is my appetite for risk? Are you willing to risk losing most or all the money you spend making these repairs? Are you in the position to hire a lawyer to defend your rights, or to attempt to enforce your rights?


*As always, this is not legal advice. I am in no way suggesting that you (1) do anything; or (2) not do anything. If you are receiving notices, demands, or threats, you must consult with an attorney as soon as possible. Failure to take prompt action could result in partial or full loss of your investment or legal rights.


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