Did you get the notice? Taxes are due!

by Chris on February 5, 2012

The practice of tax sale law is often the practice of constitutional law. The tax collector is a political subdivision of the state, and the sale of property for unpaid taxes operates as a deprivation of that property. This sometimes gives rise to scenarios where due process is violated. Notice and an opportunity to be heard are fundamental to due process of law. It is no wonder then, that the issue of notice–or the lack thereof–has been a linchpin issue surrounding most tax sale cases. This is particularly true since the 1983 U.S. Supreme Court decision of Mennonite Board of Missions v. Adams, which decided that a minimal precondition to a tax sale is notice to a mortgage company, since it has a constitutionally protected security interest.

For all the Mennonite decisions stands for, it is what the court does not say that is more intriguing. The Mennonite court decided that publication of an advertisement in a newspaper is not sufficient notice. The court also suggests that the mortgage company knew of the tax delinquency, but didn’t get notice of the tax sale itself. Moreover, the court ultimately remanded the case back to the trial court for “further proceedings not inconsistent with this opinion.” Otherwise, the case fails to decide what  does constitute good notice. Or, whether or not notice after a tax sale is sufficient. Or, what legal effect, if any, a bad notice is on tax sale itself. Or, whether the defective notice can be cured. With specific respect to tax sales, these questions have remained unanswered in the nearly three decades since Mennonite was decided.

Adding more confusion to the topic, both the U.S. Supreme Court and Louisiana Courts have used the Mennonite decision as both sword and shield. That is, sometimes upholding that notice is a necessary requirement, and other times declining to extend the Mennonite decision even in instances where notice was not provided. These are just a few examples of the confusing impact that the Mennonite decision has had. Although troubling, the legislature has apparently been aware of this issue and enacted an overhaul to the tax sale law effective January 1, 2009. It appears the new law remedies many of the problems concerning inconsistency and uncertainty of the prior law and jurisprudence. For now, only time will tell how the new law will affect tax sales.

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