Frequently Asked Questions
General Title Insurance Questions
Q: What is title insurance?
A: An insurance policy--protecting against loss should the condition of title to land be other than as insured.
Q: Why do I need title insurance?
A: When you buy a home, or any property for that matter, you expect to enjoy certain benefits from ownership. For example, you expect to be able to occupy and use the property as you wish, to be free from debts or obligations not created or agreed to by you, and to be able to freely sell or pledge your property as security for a loan. Title insurance is designed to cover these rights you bargain for.
Q: What if I have a problem? Do I have to lose my property to make a claim?
A: Not at all. At the mere hint of a claim adverse to your title, you should contact your title insurer or the agent who issued your policy. Title insurance includes coverage for legal expenses which may be necessary to investigate, litigate or settle an adverse claim.
Q: What does this cost?
A: The cost varies, depending mainly on the value of your property. The important thing to remember is that you only pay once, then the coverage continues in effect for so long as you have an interest in covered property. If you should die, the coverage automatically continues for the benefit of your heirs. If you sell your property, giving warranties of title to your buyer, your coverage continues. Likewise, if a buyer gives you a mortgage to finance a purchase of covered property from you, your coverage continues to protect your security interest in the property.
Q: If my lender gets title insurance for its mortgage, why do I need a separate policy for myself?
A: The lender's policy covers only the amount of its loan, which is usually not the full property value. In the event of an adverse claim, the lender would ordinarily not be concerned unless its loan became non-performing and the claim threatened the lender's ability to foreclose and recover its principal and interest. And, in the event of a claim there is no provision for payment of legal expenses for an uninsured party. When a loan policy is being issued, the small additional expense of an owner's policy is a bargain.
Q: Can you be a little more specific about the types of claims, or risks, covered by title insurance?
A: Sure. First understand there are basically three different levels of coverage: Standard coverage, and enhanced coverage.
Tax Sale Frequently Asked Questions
Q: Is this a "tax lien" or a "tax certificate" sale?
A: Neither. This is a hybrid lien/certificate sale, or "tax title" sale.
Q: What is a tax title sale?
A: A tax title sale is the sale or adjudication of a tax sale title to property pursuant to La. R.S. 47:2155 and 2196.
A tax title sale is the sale of properties that have delinquent taxes due and owing the political subdivision. These properties are sold to the public for the amount of delinquent taxes due, plus any accrued interest, penalties, costs and other statutory impositions. If a property is sold at tax sale, the property owner has three years to redeem the property from the purchaser. For properties in Orleans Parish, this redemption period is reduced to 18 months if the property is deemed legally blighted or abandoned. The property owner may redeem the property by paying the tax sale purchaser the purchase price plus a 5% penalty and 1% interest per month from the date of the tax sale until the date it is redeemed. See: La. R.S. 47:2243.
Q: What does a "tax sale title" confer to the tax sale purchaser?
A: A tax sale title confers on the tax sale purchaser, if the tax sale property is not redeemed within the redemptive period, full ownership of the tax sale property, free of ownership and other interests, claims or encumbrances held by all duly notified persons. A tax sale title is fully transferable and heritable, but any successor of a tax sale title takes it subject to any existing right to redeem the property or assert a nullity to the extent and for the period of time that the right would have existed in the absence of the transfer or succession. See: La. R.S. 47:2121C.
Q: Who knows about the tax title sale?
A: Pursuant to La. R.S. 47:2153, the tax debtor is notified, and the tax sale is announced to the public through publication in the official journal of the political subdivision.
Q: How does a tax title sale work?
A: Properties having tax delinquencies are offered to the public for the total delinquent amount due.
Louisiana law stipulates that the property is sold at a tax sale to the purchaser willing to bid on the least percent ownership interest in the property. Properties listed for sale on CivicSource.com will be subject to an open bidding process. Rather than bidding on the dollar amount, participants bid on percent ownership interest in a property. The bidder willing to pay the total delinquent amount due for the least percent ownership interest will be the successful bidder.
The owner has three years to redeem the property (18 months in Orleans Parish if the property is legally blighted or abandoned) by paying the tax sale purchaser the tax sale purchase price, plus a five percent (5%) penalty and one percent (1%) interest per month from the date of the tax sale until redeemed to the public for the total delinquent amount due.
Q: When and where will the properties offered at the tax sale be provided?
A: Starting one month before the auction opening date, the properties offered will be available to view on CivicSource.com.
Pursuant to La. R.S. 47:2153, the list of properties offered at the tax sale will also be advertised in the official journal of the political subdivision, more than 30 days before and within 7 days of the opening day of the tax sale. See also: La. R.S. 43:203.
Q: Can the political subdivision remove properties offered from the auction?
A: Yes. The political subdivision reserves the right to withdraw from the auction any property listed at any time prior to the closing of the auction. If a property is withdrawn from the auction, it will be indicated as such on its full property description and details page. Additionally, if you have marked a property as a "Favorite" or placed a bid on property that is withdrawn from the auction, you will be notified by email.
If the client determines that the tax sale should not have occurred due to circumstances outside of its control, it reserves the right to cancel a sale and refund the tax sale purchaser the tax sale purchase price without repayment of the redemption penalty or interest.
Q: What paperwork is needed to purchase property at the auction?
A: No paperwork is needed to purchase property offered at the auction. However, registration is required to participate.
Q: How do I buy tax sale title to a property?
A: By being the winning bidder on the property at the conclusion of the auction.
Q: Will I be able to purchase property via phone or fax?
A: No. The auction is conducted solely online at CivicSource.com.
Q: Can I purchase more than one property?
Q: Will properties that are in bankruptcy litigation be offered at the auction?
A: No. Properties stayed under federal bankruptcy law are not included in the auction. Pursuant to La. R.S. 47:2133, if a property is sold and later found to be under such protection, the sale shall be nullified.
Q: What happens if a property is not sold during the auction?
A: Pursuant to La. R.S. 47:2196, the property will be adjudicated to the political subdivision.
Real Estate Law Frequently Asked Questions
Q: If a piece of property has been adjudicated in favor of a local governing body, is there any way the owner of the property can recover full rights to the property?
A: When a property owner seeks to recover full rights to a property that has been adjudicated to a local governing body, he or she is said to be “redeeming” the property. Once a piece of property has been adjudicated to a local governing body, the sale price for the property is set at the “redemption price.” The redemption price is calculated by adding the past due and current taxes plus interest, costs, and penalties stemming from late payment of taxes and the adjudication process.
Q: If my property has been adjudicated to the City at a tax sale, how can I redeem it?
A: First, the owner of property to be sold at a tax title sale must be notified of the sale. If the owner can prove he or she was not given adequate notice, the tax title sale can be annulled. Secondly, after the property has been sold to a tax title purchaser at a tax title sale or adjudicated to the political subdivision because no one purchased the tax title at the sale, the three-year redemptive period begins. During the redemptive period, the original owner of the property, against whom the unpaid taxes were assessed, can regain ownership of the property by fully reimbursing the tax title purchaser for his or her expenses plus interest. If the property was adjudicated to the political subdivision because it was not sold at auction, the original owner can regain ownership by paying the delinquent taxes plus applicable fees and interest.
Q: What rights does a tax sale confer on a tax sale purchaser?
A: If the tax sale property is not redeemed within the redemptive period, a tax sale title confers full ownership of the tax sale property on the tax sale purchaser, free of ownership and other interests, claims or encumbrances held by all duly notified persons. A tax sale title is fully transferable and heritable, but any person who receives the tax sale title from the original tax sale purchaser takes it subject to existing rights to redeem the property or annul the sale for the period of time that those rights would have existed if the tax sale title had not been transferred.
Q: If someone has a mortgage or lien on the property at the time of the tax sale, how do those affect the rights of the tax title purchaser?
A: A person who acquires ownership of property through a tax sale title takes the ownership subject to a mortgage, lien or other interests held by those other than the owner at the time of the sale. However, after the redemptive period has ended, if the tax title purchaser wishes to confirm the tax title and take ownership of the property, he will not be denied that right simply because third parties with liens, mortgages, etc. on the property were not notified. You should obtain legal advice if you wish to confirm your tax sale title after the redemptive period ends.
Q: Are there any rights that cannot be extinguished by the acquisition of ownership subsequent to the purchase of a tax deed?
A: As long as they were properly recorded prior to the filing of the tax sale certificate, the property will remain subject to any of the following rights regardless of what happens at the tax title sale: 1) mineral rights, 2) pipeline servitudes, 3) predial servitudes (servitudes granted in favor of one piece of property against another piece of property, i.e. the right of one parcel’s water to drain across another parcel), 4) building restrictions, and 5) dedications in favor of political subdivisions, the public, or public utilities. If the property is subject to any of these rights, it will most likely be recorded in the Conveyance Records for the parish where the property is located. You should obtain legal advice if you are concerned about how these rights will affect your use and ownership of the property.
Q: When and at what rate does interest on delinquent taxes begin to accrue?
A: Interest on all delinquent taxes begins accruing on the first calendar day following the deadline for payment of taxes. Interest continues to accrue until they are paid at the rate of one percent per month.
Q: If the tax rolls have already been delivered, how are the taxes due on the property affected if someone sells or mortgages the property?
A: An alienation (i.e. sale) or encumbrance (i.e. mortgage) of the property made after the tax roll has been delivered to the tax collector does not affect the taxes assessed on the property or the sale of the property to enforce collection of delinquent taxes.
Q: What is a tax sale deed?
A: In Louisiana, a tax sale deed is known as a tax sale certificate. The tax collector is required to grant and file a tax sale certificate to purchasers of any property to which tax sale title was sold to recover delinquent taxes. A tax sale certificate will include the full name and address of the tax sale purchaser, a brief history of the tax sale proceedings, a description of the property, the amount of taxes, interest, and costs assessed against the property, the bid made for the property and how the bid was paid (cash, cashier’s check, money order, etc.). The tax sale certificate also states that the property is redeemable at any time during the three-year redemptive period which begins on the day when the tax sale certificate is filed in the conveyance records in the parish where the property is located.
Q: Is the tax purchaser required to provide any notice to people with an interest in the property after a tax sale?
A: Pursuant to La. R.S. 47:2156, within the applicable redemptive period, the tax sale purchaser may send a written notice to any or all tax sale parties notifying the parties of the sale. The notice must provide full and accurate information necessary to contact the tax sale purchaser, including the name, physical address and telephone number of the purchaser. It must be accompanied by a copy of the tax sale certificate received by the tax sale purchaser. The notice must inform the tax sale parties that the failure to redeem the property prior to the expiration of the applicable redemptive period will terminate the right to redeem the property, and the purchaser will have the right to seek confirmation of the tax sale title and take actual possession of the property. You should obtain legal advice as to your rights and obligations as a tax sale purchaser.
Q: Can a tax purchaser take possession of the property? If so, when and under what conditions?
A: Pursuant to La. R.S. 47:2158, a writ of possession can be issued only when the possession by the tax sale purchaser is necessary to comply with the order of a political subdivision for enforcing property standards, such as a condemnation order. You should obtain legal advice before taking physical possession of a property purchased at a tax sale.
Q: Does purchasing the tax title guarantee that all tax-related claims against the property have been settled?
A: No. Tax sale title issued by a parish or city government does not affect, invalidate, or extinguish the claim of another political subdivision for the taxes due on the property that were not included in the bid price. An attorney can assist you in determining whether any other taxes have been assessed against a property you are interested in.
Q: Am I responsible for paying the property taxes during the redemptive period?
A: Yes. Pursuant to La. R.S. 47:2161, from the date a tax sale certificate selling tax sale title to a tax sale purchaser is filed, all taxes on the property will, after that date, be assessed to and paid by the tax sale purchaser until the property is redeemed. If redeemed, the person redeeming shall pay all statutory impositions assessed upon the property subsequent to the tax sale, including associated interest and penalties. Failure to pay post-sale annual taxes may result in the property being sold at a later tax sale. You should obtain legal advice as to your rights and obligations as a tax sale purchaser.
Q: What happens if the owner or co-owner of the property wants to pay the unpaid taxes after the tax sale? Before the 3-year redemption period is up? After?
A: Before: Pursuant to La. R.S. 47:2243, to redeem the property, the former owner must pay the purchase price, plus a five percent (5%) penalty thereon, and interest at the rate of one percent (1%) per month until redeemed. Pursuant to La. R.S. 47:2243, Comment (b), to the extent the tax sale purchaser paid subsequent statutory impositions, which includes property taxes, the tax sale purchaser is entitled to reimbursement of those amounts, plus interest and penalties. Simple interest in the amount 1% percent per month accrues upon delinquent property taxes beginning February 1st of each year, until paid. Pursuant to La. R.S. 47:2161, if redeemed, the person redeeming must pay all statutory impositions assessed upon the property subsequent to the tax sale. You should obtain legal advice as to your rights and obligations as a tax sale purchaser.
After: Once the three-year redemptive period has expired, neither the original owner nor his or her co-owners have an absolute right to redeem the property. When an original owner wishes to redeem the property during the redemptive period, he or she pays the tax collector who then remits payment to the tax title purchaser. However, once the redemptive period has ended, the original owner or co-owner must deal directly with the tax title purchaser. The purchaser can choose to redeem the property for whatever price he or she wishes or to have the title confirmed and take ownership of the property.
Q: What is a tax adjudicated property and how is it different from a tax deed?
A: When a property goes up for auction at a tax deed sale, and no one purchases the tax title or the highest bid does not cover the delinquent taxes, interest, and costs associated with that property, the property is said to be “adjudicated” to the governing body that held the auction. The governing body can then advertise that the property will be sold at a later tax sale, where the sale price or bid will be set at the redemption price of the property.
Q: Are tax sales required to be advertised by law? What must the ad contain?
A: A public sale must be advertised twice in the official journal for the political subdivision, once at least thirty days prior to the date of the public sale, and once no more than seven days prior to the date of the public sale. The advertisement must include the minimum bid, the latest date written bids will be accepted, the time and date of in-person bidding, and any other terms of sale.
Q: What does it mean to quiet tax title? What is the procedure for doing so?
A: Quieting tax title is also known as confirming the tax deed. After the three-year redemptive period ends, the tax title purchaser can file a suit against the tax sale parties whose rights he or she wishes to terminate. The tax title purchaser must petition the court in the parish where the property is located. Once the tax sale parties have been served notice of the suit, if no proceeding is instituted to annul the tax sale, a judgment quieting and confirming the tax title and full ownership interest in the property will be made in favor of the tax title purchaser. You should obtain legal advice if you wish to quiet your tax title.
Standard coverage handles such risks as:
- Forgery and impersonation;
- Lack of competency, capacity or legal authority of a party;
- Deed not joined in by a necessary party (co-owner, heir, spouse, corporate officer, or business partner);
- Undisclosed (but recorded) prior mortgage or lien;
- Undisclosed (but recorded) easement or use restriction;
- Erroneous or inadequate legal descriptions;
- Lack of a right of access; and
- Deed not properly recorded.
An extended coverage policy may be requested to protect against such additional defects as:
- Off-record matters, such as claims for adverse possession or prescriptive easement;
- Deed to land with buildings encroaching on land of another;
- Incorrect survey;
- Silent (off-record) liens (such as mechanics' or estate tax liens); and
- Pre-existing violations of subdivision laws, zoning ordinances or CC&R's.
Subject to availability in your locale, an Enhanced Policy covers all of the risks listed above, plus:
- Post-policy forgery;
- Forced removal of improvements due to lack of building permit (subject to deductible);
- Post-policy construction of improvements by a neighbor onto insured land; and
- Location and dimensions of insured land (survey not required).
As with any insurance contract, the insuring provisions express the coverage afforded by the title insurance policy and there are exceptions, exclusions and conditions to coverage that limit or narrow the coverage afforded by the policy. Also, some coverage may not be available in a particular area or transaction due to legal, regulatory or underwriting considerations.