For the first time since Hurricane Katrina, New Orleans officials will hold an online tax sale for roughly 2500 properties with delinquent tax bills. The sale goes from 8am Monday, today, to 8pm Wednesday, November 28.

How does it work?

You can go to www.neworleanstaxsale.com to see more information on properties that are available as well as to get answers to frequently asked questions. You can register to buy properties or to watch properties that are of interest to you. However, if you want to buy a property, you must register bank or withdrawal information online.

What happens after I buy a property?

When you “buy” a property in this tax sale, you don’t own it outright. The delinquent tax owner has three years to redeem the property from you. If they do redeem it, they have to pay you (or the tax collector who subsequently pays you) overdue taxes, a five percent penalty, and an interest rate of 1 percent per month.

If you make any repairs to the property, the owner will have to reimburse you for those repairs, as long as you have receipts and the costs are reasonable. If the property is declared blighted, or becomes declared blighted while you are paying the taxes on it, you may have to make repairs.

Once you buy the property, you must notify the former owner of your purchase and of the owner’s right to redeem the property within 30 days after the tax sale deed is recorded. The tax sale deed gets recorded in the Orleans Parish Office of Mortgages and Conveyances.

You are responsible for paying future taxes on that property or it may go to a subsequent tax sale. However, you are not responsible for paying any mortgage. Properties that are currently in foreclosure will not be sold, but if the property subsequently goes to foreclosure, or if there are other liens on the property in front of the tax lien, that could complicate things. To be honest, I’m not sure how that pans out. Talk to a lawyer!

What happens if the owner doesn’t redeem the property after 3 years?

You don’t have to do anything once the redemption period expires, but if you want to get title to the property, you should file a suit to confirm and quiet your tax title. Your attorney can help you with this.

It’s worth nothing that the properties going up for sale are only those properties that were delinquent in their taxes before Hurricane Katrina. In other words, no tax delinquencies after August, 2005 are going up for sale.