HLS 10RS-1712 ORIGINAL
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Regular Session, 2010
HOUSE BILL NO. 1037
BY REPRESENTATIVE HINES
PROPERTY: Authorizes redevelopment covenants as part of tax sales and lien foreclosures
AN ACT1
To enact R.S. 13:2577 and R.S. 47:2154.1, relative to redevelopment covenants; to authorize2
redevelopment covenants as a condition to certain sales; to provide for notice and3
filing; to provide for the purpose of redevelopment covenants; to provide procedures4
for cancellation and enforcement; to provide for a prescriptive period; to provide5
procedures for challenging a finding of noncompliance; to provide for the transfer6
of title; and to provide for related matters.7
Be it enacted by the Legislature of Louisiana:8
Section 1. R.S. 13:2577 is hereby enacted to read as follows: 9
§2577. Lien enforcement; judicial sale redevelopment covenants10
A. If property is subject to seizure and sale pursuant to the provisions of this11
Chapter, a political subdivision may require, as a condition to the sale, that the12
purchaser agree to a redevelopment covenant designed to eliminate the causes of the13
governmental liens or the threat to public health and safety.14
(1) The redevelopment covenant shall be effective only if notice of the15
covenant is provided to the purchaser prior to the sale, and a copy of the16
redevelopment covenant is attached to and recorded with the act of sale.17
(2) The redevelopment covenant shall provide for reasonable parameters and18
deadlines for the demolition, rehabilitation, or improvement of the property in order19 HLS 10RS-1712 ORIGINAL
HB NO. 1037
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to bring the property in compliance with all state laws and local ordinances in an1
effort to make the property merchantable.2
B.(1) Upon request of the purchaser and after inspection and approval by the3
political subdivision, the redevelopment covenant shall be cancelled by the filing of4
a certificate by the political subdivision indicating compliance with the terms of the5
covenant.6
(2) The redevelopment covenant shall be null and void if the property is7
redeemed by the tax debtor.8
C. The deadline for compliance with the redevelopment covenant shall not9
exceed three years following the expiration of any applicable redemption period.10
The covenant shall prescribe upon the deadline for compliance as stated in the11
covenant or three years following the expiration of the applicable redemption period,12
whichever occurs first.13
(1) If the purchaser fails to comply with the covenant prior to the deadline14
for compliance, the political subdivision may file a certificate of noncompliance and15
cancellation of the sale within thirty days after the deadline for compliance. The16
effect of the filing of the certificate of noncompliance shall be to adjudicate the17
property to the political subdivision and forfeiture of any claim for the repayment of18
the purchase price or expenses incurred by the purchaser. The certificate of19
noncompliance shall be served upon the purchaser in order to commence the delays20
for challenging the certificate of noncompliance and the adjudication of the property21
to the political subdivision.22
(2) The purchaser shall have thirty days from the receipt of service of23
process of the certificate of noncompliance to file an action to challenge the24
certificate of noncompliance in the district court of the parish where the property is25
located. Failure of the purchaser to timely file his action to challenge the certificate26
of noncompliance in a court of competent jurisdiction shall result in the adjudication27
of the property to the political subdivision becoming final.28 HLS 10RS-1712 ORIGINAL
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(3) If the political subdivision fails to file a certificate of noncompliance1
within the delay provided by Paragraph (1) of this Subsection, the purchaser or any2
interested person may file an ex parte cancellation of the covenant.3
Section 2. R.S. 47:2154.1 is hereby enacted to read as follows: 4
§2154.1. Tax sale redevelopment covenants5
A. If the tax sale property is subject to a governmental lien or is in a blighted6
condition amounting to a threat to the public health and safety at the time of sale, a7
political subdivision may require, as a condition to the transfer of tax sale title, that8
the tax sale purchaser agree to a redevelopment covenant designed to eliminate the9
causes of the governmental liens or the threat to public health and safety.10
(1) The redevelopment covenant shall be effective only if notice of the11
covenant is provided to the tax sale purchaser prior to the tax sale, and a copy of the12
redevelopment covenant is attached to and filed with the tax sale certificate as13
provided by R.S. 47:2155.14
(2) The redevelopment covenant shall provide for reasonable parameters and15
deadlines for the demolition, rehabilitation, or improvement of the property in order16
to bring the tax sale property in compliance with all state laws and local ordinances17
in an effort to make the property merchantable.18
B.(1) Upon request of the tax sale purchaser and after inspection and19
approval by the political subdivision, the redevelopment covenant shall be cancelled20
by the filing of a certificate by the political subdivision indicating compliance with21
the terms of the covenant.22
(2) The redevelopment covenant shall be null and void if the property is23
redeemed by the tax debtor.24
C. The deadline for compliance with the redevelopment covenant shall not25
exceed three years following the expiration of any applicable redemption period.26
The covenant shall prescribe upon the deadline for compliance as stated in the27
covenant or three years following the expiration of the applicable redemption period,28
whichever occurs first.29 HLS 10RS-1712 ORIGINAL
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(1) If the tax sale purchaser fails to comply with the covenant prior to the1
deadline for compliance, the political subdivision may file a certificate of2
noncompliance and cancellation of the tax sale certificate within thirty days after the3
deadline for compliance. The effect of the filing of the certificate of noncompliance4
shall be to adjudicate the property to the political subdivision and forfeiture of any5
claim for the repayment of the tax sale purchase price or expenses incurred by the6
purchaser. The certificate of noncompliance shall be served upon the tax sale7
purchaser in order to commence the delays for challenging the certificate of8
noncompliance and the adjudication of the property to the political subdivision.9
(2) The tax sale purchaser shall have thirty days from the receipt of service10
of process of the certificate of noncompliance to file an action to challenge the11
certificate of noncompliance in the district court of the parish where the property is12
located. Failure of the tax sale purchaser to timely file his action to challenge the13
certificate of noncompliance in a court of competent jurisdiction shall result in the14
adjudication of the property to the political subdivision becoming final.15
(3) If the political subdivision fails to file a certificate of noncompliance16
within the delay provided by Paragraph (1) of this Subsection, the tax sale purchaser17
or any interested person may file an ex parte cancellation of the covenant.18
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Hines HB No. 1037
Abstract: Authorizes political subdivisions to include redevelopment covenants as a
condition to tax sales and certain lien foreclosures in order to ensure the
redevelopment of the property by the purchaser.
Proposed law provides that if property is subject to a governmental lien or is in a blighted
condition amounting to a threat to the public health and safety at the time of tax sale or lien
foreclosure, a political subdivision may require, as a condition to the transfer of the property,
that the purchaser agree to a redevelopment covenant designed to eliminate the causes of the
governmental liens or the threat to public health and safety.
Proposed law provides that the redevelopment covenant shall be effective only if notice of
the covenant is provided to the purchaser prior to the tax sale, and a copy of the
redevelopment covenant is attached to and filed with the tax sale certificate or act of sale. HLS 10RS-1712 ORIGINAL
HB NO. 1037
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are additions.
Proposed law requires the redevelopment covenant to provide reasonable parameters and
deadlines for the demolition, rehabilitation, or improvement of the property in order to bring
the property in compliance with all state laws and local ordinances.
Proposed law provides that the redevelopment covenant shall be cancelled by the filing of
a certificate by the political subdivision indicating compliance with the terms of the
covenant, and provides that the redevelopment covenant shall be null and void if the
property is redeemed by the tax debtor.
Proposed law prohibits deadlines for compliance with the redevelopment covenant to exceed
three years following the expiration of an applicable redemption period.
Proposed law provides that the covenant shall prescribe upon the deadline for compliance
as stated in the covenant or three years following the expiration of an applicable redemption
period, whichever occurs first.
Proposed law authorizes the political subdivision to file a certificate of noncompliance and
cancellation of the sale within 30 days after the deadline for compliance if the tax sale
purchaser fails to comply with the covenant.
Proposed law provides that the effect of the filing of the certificate of noncompliance shall
be to adjudicate the property to the political subdivision and forfeiture of any claim for the
repayment of the purchase price or expenses incurred by the purchaser.
Proposed law provides that the purchaser shall have 30 days from the receipt of service of
process of the certificate of noncompliance to file an action to challenge the certificate of
noncompliance in the district court of the parish where the property is located.
Proposed law provides that failure of the purchaser to timely file his action to challenge the
certificate of noncompliance in a court of competent jurisdiction shall result in the
adjudication of the property to the political subdivision becoming final.
Proposed law authorizes the purchaser to file an ex parte cancellation of the covenant if the
political subdivision has failed to timely file a certificate of noncompliance.
(Adds R.S. 13:2577 and R.S. 47:2154.1)