Many Louisiana governmental entities own by default adjudicated tax sale properties.
Here is how this happens:
1.The "original" owner of the property fails to pay the taxes
2. The property then goes to a tax sale
3. No one buys the property at the tax sale
4. The property's title transfers by operation of law to the governmental entity owed the taxes. This entity becomes the tax sale owner versus the original owner.
5. The tax sale transfer to the governmental entity does NOT transfer full, perfected ownership of the property. However, the tax sale owner is the owner of record, subject to the right of redemption.
6. The original owner has the right to redeem full ownership of the property by paying the outstanding taxes, plus interest and costs. By payment, the tax sale owner's interest is transferred back to the original owner. The original owner has three years from the date of the tax sale to redeem the property.
THIS IS A VERY SIMPLIFIED EXPLANATION OF TAX SALE PROPERTY AND RIGHT OF REDEMPTION.
A CITY CAN BE THE CITY TAX SALE OWNER AND THE PARISH CAN BE THE PARISH TAX SALE OWNER OF THE SAME PROPERTY.
PAYMENT OF OUTSTANDING TAXES REVERTS THE OWNERSHIP OF THE PROPERTY BACK TO THE ORIGINAL OWNER--WITHOUT REGARD TO THE PERSON ACTUALLY PAYING THE DELINQUENT TAXES.
Adjudicated properties are often "their properties." Often successions are not filed, and the ownership of property passes or is transferred by Louisiana law to descendants. Subsequent deaths of heirs without the filling of succession continues the chain of title into heirs.
The heirs in a chain of title without successions do not have good and merchantable title until successions are filed. Thus, finding live persons who have marketable title vested by succession is often the challenge, especially with marginally valued properties.
Taxes are generally not paid because the property does not have much economic value. And the same is true with "heir property"--successions are not filed because of the low values of the property.
These two realities are major legal roadblocks to development of the thousands of properties adjudicated to the City of Shreveport. Efforts by the Shreveport Implementation and Redevelopment Authority (SIRA) and developers to convert adjudicated properties into productive real estate holdings have big, expensive hurdles to conquer in their efforts. The mere fact that Shreveport has 6,000 plus tax sale properties is a testament to this reality.