Chapter: What is the standard redemption period for property taxes after a tax sale in Louisiana? (EN)

Standard Redemption Period: Three Years

The standard redemption period for property sold at a tax sale in Louisiana, allowing the original owner (or other parties with an interest) to reclaim the property, is three (3) years from the date the tax deed is filed for registry. This period is defined by Louisiana Revised Statute (La. R.S.) 47:2286.

Legal Basis and Rationale

• Statutory Foundation: La. R.S. 47:2286 provides the legal framework governing property redemption after a tax sale. It outlines the conditions, procedures, and timeline for redemption.
• Due Process: The redemption period serves as a critical component of due process, affording delinquent taxpayers an opportunity to rectify their tax delinquency and retain ownership of their property. This balances the state’s interest in collecting taxes with the individual’s property rights protected by the Fourteenth Amendment of the U.S. Constitution.
• Equitable Considerations: The timeframe considers the financial hardships that may lead to tax delinquency and provides a reasonable window for taxpayers to secure the necessary funds for redemption.

Redemption Process

The redemption process involves the following key elements:

1. Notification: The tax sale purchaser is required to provide notification to the former property owner (and other lienholders if discoverable) that they intend to seek a judgment of possession following the expiration of the three-year redemption period. This notification must be served at least sixty (60) days prior to seeking the judgment. La. R.S. 47:2286.

2. Redemption Amount: The redemption amount generally includes:

   • The amount of taxes, interest, penalties, and costs paid by the purchaser at the tax sale.
   • Interest on the purchase price from the date of the tax sale to the date of redemption. This interest rate is defined by statute (La. R.S. 47:2286).
   • Any subsequent taxes paid by the purchaser, with interest.
   • Costs for notification to the former owner.
   • Reasonable expenses incurred by the purchaser for necessary repairs, maintenance, and preservation of the property, if any, supported by documentation.
     • Note: Improvements to the property, beyond necessary repairs and maintenance, are generally not recoverable within the redemption amount.

3. Payment: The redemption amount must be paid to the tax collector of the parish where the property is located.

4. Redemption Certificate: Upon receipt of the redemption amount, the tax collector issues a redemption certificate to the person redeeming the property.

5. Recordation: The redemption certificate should be recorded in the conveyance records of the parish where the property is located to provide public notice of the redemption and to clear the title.

Mathematical Representation of Redemption Amount

The redemption amount (R) can be expressed mathematically as:

R = P + I + ST + NC + RE

Where:

• R = Total Redemption Amount
• P = Purchase Price at Tax Sale (including original taxes, interest, penalties, and costs)
• I = Interest on the Purchase Price (calculated from the date of the tax sale until the date of redemption)
• ST = Subsequent Taxes Paid by the Purchaser (plus interest)
• NC = Notification Costs
• RE = Reasonable Expenses for Necessary Repairs, Maintenance, and Preservation (with documentation)

The interest (I) can be further defined as:

I = P * r * t

Where:

• P = Purchase Price at Tax Sale
• r = Annual Interest Rate (as prescribed by La. R.S. 47:2286)
• t = Time Period (in years) from the date of the tax sale to the date of redemption

Legal Proceedings After Redemption Period

• Judgment of Possession: If the property is not redeemed within the three-year period, the tax sale purchaser can initiate a legal action to obtain a judgment of possession, formally establishing their ownership.
• Quiet Title Action: Even after obtaining a judgment of possession, the purchaser may choose to file a quiet title action to further solidify their ownership and address any potential title defects.

Practical Applications & Considerations

• Title Examinations: Title examiners must meticulously review tax sale records and applicable redemption periods to ascertain the validity of title claims.
• Real Estate Transactions: Parties involved in real estate transactions concerning properties previously subject to tax sales must ensure that the redemption period has unequivocally expired and that all legal requirements have been satisfied.

Examples

Example 1: Standard Redemption

A property is sold at a tax sale on January 1, 2023. The tax deed is filed on January 15, 2023. The standard redemption period expires on January 15, 2026.

Example 2: Calculation of Redemption Amount

A property sold for $1,000 at a tax sale. The statutory interest rate is 1% per month. The purchaser paid $200 in subsequent taxes. The purchaser incurred $100 in notification costs. The redemption occurs after 2 years. No repairs were undertaken.

R = 1000 + (1000 * 0.12 * 2) + 200 + 100 + 0

R = 1000 + 240 + 200 + 100

R = $1540.00

The redemption amount is $1540.