If I buy a home at a foreclosure sale in Louisiana, can its owners later "redeem" the house?
Buyers of foreclosed homes in Louisiana need not worry about the right of redemption that affects properties in some other states.
I want to buy a vacation condominium in New Orleans, Louisiana. I think I can probably get a great deal on a foreclosed condo, but I heard that some laws allow owners to possibly get property back after a foreclosure. I don’t want to go through the hassle of buying at a foreclosure sale only to lose the place afterwards. Can this really happen?
Not in Louisiana. Former owners in that state cannot get the condo or other property back if you purchase it at a foreclosure sale.
(Various other states provide foreclosed property owners with what’s called a “statutory right of redemption.” This means that state law gives the homeowners a certain amount of time after the foreclosure to repurchase or “redeem” the property by reimbursing the party who bought it at the foreclosure sale for the full purchase price, plus various other costs. However, Louisiana law does not permit this.)
While there’s no chance that the homeowners will redeem the property after the foreclosure, it is possible (though not at all common) for the IRS to redeem the condo after the foreclosure sale if there was a federal tax lien on the property.
No Redemption Period for Owners After a Foreclosure in Louisiana
Louisiana law does not provide the former owners with the right to redeem the condo after a foreclosure. Once the sale takes place, a deed to the property is promptly issued to the successful bidder.
The IRS Could Choose to Redeem, But Only Under Certain Circumstances
If the condo owners did not pay their income taxes, the IRS may have previously recorded a Notice of Federal Tax Lien. The IRS then gets 120 days to redeem the property after the foreclosure sale. (IRS redemptions don’t happen very often. This is because a redemption would only occur if the IRS believes that it could later sell the place for more than you paid at the foreclosure sale.)
If the IRS is considering exercising its right of redemption, it would first send you a notice to let you know that redemption may occur.
What Else to Think About When Buying a Foreclosed Property in Louisiana
While you could get a good deal by purchasing a condo at a foreclosure sale, there are a few issues that may make you think twice before buying one this way.
In a typical sale, you’d get disclosures from the seller of the property about the property's features, physical condition, and more, prior to the sale. However, you won’t get any disclosures if you buy at a foreclosure sale.
Moreover, you’ll have to take the condo “as is,” without being able to negotiate repairs or even take a look inside before you buy it, in most cases. Since the owners were in foreclosure, it’s pretty likely that they stopped paying for maintenance a while ago and the condo could need some significant repairs. (Learn more in Nolo’s Buying Foreclosed Properties area.)
Finding Louisiana’s Foreclosure Laws
If you want to learn more about foreclosures in Louisiana, go to Art. 2631 through 2772 and Art. 3721 through 3753 of the Louisiana Code of Civil Procedure.