Is adjudicated worth it?

[Timothy Winfield]

Hello BP Baton Rouge community I recently just won the bid on a piece of adjudicated property in Baton Rouge. The property ended up on the sheriffs sale list because the current owner of the property did not pay the taxes that current year in my case it was 2009. An online company named civic source usually does the bids online but I did all of the foot work myself for my first one. I went to the assessors office and opened the file and placed a deposit once found out it was adjudicated. The city council has approved my offer for the property as well. I then had to do research to notify all interest in the property (i.e. Probate records,civil records, mortgage records and et cetra) of what is going on. If no one comes up in 6 months and says anything I can buy the property. I have been informed that the person can always come back and get there property back, and the property is sold without warranties.. They say it rarely happens but it is a possibility. 1.) I have been told after 10 years I can get a lawyer to do something to get it set into stone. How true is this? 2.) Is there only a tax deed I can get. Is there a process I can go through to get a quiet claim deed. Or a deed set in stone and no one can ever challenge it? 3.)I want to borrow money against it so I can buy another piece of property. I have been told banks are unlikely to give money on a tax deed property 4) I need advice and answers!!

[Robert Leonard]

We are reviving a 4-year-old post here, but okay. Questions around this subject come up repetitively. This is Louisiana's way of dealing with the Constitutional matter of property ownership rights dealing with property taxes. I think that, although they seem complex, these laws are in the spirit of making it extremely difficult to take a person's property away.  Only after a very long process that gives all parties with an ownership interest, opportunities to pay what is owed to redeem themselves and retain their ownership of their property, the property can be lost.

Q1.) I have been told after 10 years I can get a lawyer to do something to get it set into stone. How true is this? 

A1. The "Good Faith" Acquisitive Prescription (called adverse possession in other states) period is 10 years. Good Faith is established by meeting a legal standard giving valid notice to all parties with an ownership interest, advertising in the local newspaper of the sale of the property and documenting all of the attempts to contact those with an ownership interest to satisfy a judge who will make the decision to quiet the title. When you look at the properties on Civic Sources website and you see all of the copies of certified letters and other documents, that's what all of that is for. They are establishing the record of contacting or attempting to conact the parties with an ownership interest. The "clock" on the time periods involved does not start until you can establish that all parties have received notice or you made attempts to notify all parties to satisfy a judge.

Q2.) Is there only a tax deed I can get. Is there a process I can go through to get a quiet claim deed. Or a deed set in stone and no one can ever challenge it?

A2. Tax Deed is what you get at tax sale auctions. You don't get it just by paying the taxes. Common mistake, people pay the taxes and think that means they have some kind of ownership interest. All they did was paid somebody else's taxes. A quit claim deed is only the person you are dealing with transferring their ownership interest to you, if they have any. It comes with no assurance that there aren't other owners or liens attached to the property.

Q3.)I want to borrow money against it so I can buy another piece of property. I have been told banks are unlikely to give money on a tax deed property

A3. This is the big problem with these properties, they have a title problem until you can quiet title. That could take 10 years.  The title insurance that Civic Source offers with the properties sold on their site, is not widely accepted by banks/lenders. If you invest a sum of money that you don't mind not being able to cashout refinance, you can use a long term strategy of renting or seller financing the property. If you are legitimate, you will disclose the title problem and not make any promises that are out of your control to deliver. In 10 years, a judge could say that you haven't satisfied the requirements to quiet title and the problem could go on. That's a level of uncertainty that some seller financed buyers will accept, but you really need to be detailed and transparent to anyone you "sell" to or it can come back and haunt you.

4) I need advice and answers!!

None of my answers are advice, but a summary of my understanding of how this works. There is so much more to discuss on this topic and I tried to keep this brief. It still feels like a wrote a book. ;-) I've put in a good bit of time learning about it. I am an investor and I like knowing how things work in real estate, but I am not an attorney.