Episode Transcript
[00:00:00] Speaker A: Now this is fundamentally a different component of the new law and as dry as that might sound, it is a huge impact on the bottom line of your return.
There's no praying at this point, except for if you want to go to church on Sundays.
[00:00:15] Speaker B: Because there's no lawsuit and because there's no lawsuit yet.
[00:00:17] Speaker A: This is the redemption period, right? So this is simply doing the more administrative and paperwork steps to let the tax collector know that you have incurred these expenses and that in the event that someone thereafter comes and asks for a redemption, they include that in the calculation that they give and demand that the payer pay. Right.
[00:00:37] Speaker B: Let's just go down a quick rabbit hole. How consistent are the judges and how they treat quiet title foreclosure actions? Is it consistent?
[00:00:46] Speaker A: Quick note before we continue. Nothing we discuss in this podcast should be considered legal, financial or investment advice. Tax lien laws vary significantly by state and every property situation and investor is unique.
Always consult with qualified legal and financial professionals in your jurisdiction before making any investment decisions. Now let's get back to the show.
Welcome back to the Jersey Podcast where technology and expertise unlock tax sale investing for everyone.
Right now we're in the middle of a Louisiana deep dive. The new 2026 tax lien laws in Louisiana and how they got the investment in this state. This is Sullivan Morrell, CEO, founder of jurisd. With me, as always is my co founder George Jackson with Caller Common as always.
[00:01:32] Speaker B: You're welcome.
[00:01:32] Speaker A: Let's get back into the next episode which is the recovery of fees and costs with this process. Now this is fundamentally a different component of the new law and as dry as that might sound, it is a huge impact on the bottom line of your return.
So let's get into how it's different.
[00:01:58] Speaker B: First question out of my, out of my mouth is what can I get cost? My cost back on like in other words, if I'm trying to get a bottom line on an investment, I need to know what is recoverable and what isn't because that is going to affect my, you know, the ROI on the investment.
So that's what I would want to know is what can I get recovery.
[00:02:19] Speaker A: There's three areas that, that you want to really think about costs being just kind of segmented into. Number one is the cost of compliance during the redemption period. That's that we've mentioned that numerous times and there was a whole episode earlier in series on just that.
But your research, your title search, your skip tracing the letters, the due diligence, the preservation, all that stuff like under olall Zero recovery.
[00:02:43] Speaker B: Okay.
[00:02:43] Speaker A: It's just sunk cost. And if it redeems, you're just not going to get that back. It's going to dilute the return percentage of, of your, the rate on your return.
New law up to $500 is recoverable of whatever you have proven. Now again that's not automatic. So I want to be aware that just because the new law says you are entitled to get the $500 back or up to does not mean you will get it. Now, when we're talking about during the redemption period, redemptions happen because somebody walks into the tax collector and says hey, I'm aware that this tax lien I have an interest in was sold a tax sale and I want to redeem it before too late. So the sheriff then, or the tax collector of the city then calculates what that is with interest through the month that they're in and says, here you go, here's the quote. Now that amount, if they pay that amount right then and there, that redemption is done. It's over. With that redemption amount of the ship that the tax collector gave, the person who wanted to pay either includes your redemption do research cost or it doesn't.
[00:03:47] Speaker B: Do you have to have prayed for it to get it.
[00:03:50] Speaker A: There's no praying at this point, except for if you want to go to church on Sundays.
[00:03:54] Speaker B: Because there's no lawsuit.
[00:03:55] Speaker A: Because there's no lawsuit yet. This is the redemption period, right. So this is simply doing the more administrative and paperwork steps to let the tax collector know that you have incurred these expenses and that in the event that someone thereafter comes and asks for redemption, they will include that in the calculation that they give and demand that the payer pay. Right. And so there's also a speed to which you want to do this. Right? Because redemptions can happen at any time. So you could incur these expenses and a redemption request come in the next day and you may be sol because the sheriff, the tax collector just simply didn't know that you had what's going on. So there's a, you know, building this into your portfolio management system building in Louisiana. You're, you're investing in tax liens. This is a huge component of it. It is something that JURISD is pioneering as being part of our service to portfolio management of taxes and reason so you don't have to worry about it.
So redemption period costs, that's the first thing. The second thing is in the event of non redemption, you want to need to foreclose. Right? We talked about that in the last
[00:05:00] Speaker B: episode and who do you need for that?
[00:05:01] Speaker A: You need an attorney recommend tax deed law because they're the only ones who do nothing for that. But there are two types of costs in any kind of legal action. There's costs and then there's fees. Right. When we say fees typically mean what attorney's fees. Right.
[00:05:16] Speaker B: Costs are like court costs, but attorney
[00:05:18] Speaker A: fees are the hardest thing to get in just about any other kind of judicial process. It's very rarely is it allowed.
Here is an example of where the legislature, through a lot of, you know, persuading from committees like the one I was on, were able to get them to build this into the recovery system of foreclosure. It was for a while, it was not in there. We were pushing, the lobbyists were pushing to get it passed without it.
And thankfully, because, you know, our argument was that, hey, you make this too onerous on the investor or not enough return, they're not going to come back and invest in the state. And who does that hurt? The tax paying citizens of the state. Right. So make it fair, but make it balanced at the same time. I sound like a Fox News commercial now.
But now what you can get back is not just your illegal shots, but also attorney's fees. Now, the shat in Louisiana new law says this. You can get up to $2,500 of attorney's fees in the event of a foreclosure and you go all the way in the property sold. Now, if anyone has ever filed a lawsuit before or if any of the attorney listeners out there in 2026 are hearing $2,500, you're already thinking that that's not enough. And you would be correct.
That was the an amount that was basically a concession between the different lobbying groups who got this thing passed through. And that was as good as it was going to get.
However, one thing that we got passed was language that says or unless good cause shown for a higher amount.
So another reason to hire an expert in the space to handle your foreclosures, because in every case you will need to then convince the judge that you spent more than $2,500 and there was good cause for doing so. And if you can't or don't, you're going to be again eating into this benefit, which is getting your attorney's fees back. Right? So Maybe you spent $5,000, which would be more of the, of the standard, right? $5,000, $6,000, that's more typical.
Instead of losing out on that additional $3,500 of attorney's fees now you can actually get a case for giving that back in doing so successfully.
[00:07:23] Speaker B: So partnering with a firm that, I don't know, systematized things and maybe has a flat fee structure in this particular context could be beneficial. Is that what you're trying to say?
[00:07:33] Speaker A: I would think so.
[00:07:34] Speaker B: Okay. I was just wondering.
[00:07:35] Speaker A: So of course filing the event cost that's more typically recovered and that becomes part of your writ amount. But that hasn't changed. And so you know, and as you might know, if you've been in litigation before or you are an attorney listening to this and you're just aware of it, it's legal fees can also grow overflow. Right. More things to do, you have more expenses, more attorney's fees.
And so there's also keeping up the.
With where that balance is of what is the payoff as of now. Maybe it changed from what before you had to file for the actual auction date or the gift of writ amount or. Yeah. You know, and so making sure that you have the right person advocating for your bottom line knows these laws and knows how to wind a file and how to update it, make sure that the government is collecting the right amount for you at any given time is critical.
Maximizing this.
[00:08:27] Speaker B: And, and I don't need you to go down into the weeds on this next question. I'm going to, I'm going to kind of base it. You know, I'm going to kind of.
It's going to be yes or no. So would you say that the, the ability to recover the attorney's fees and just the overall just gravit. Gravitating towards recovery of fees, would you say that opens up this asset class to the smaller investor like, like, like, like. Or smaller liens like just in your. And you don't have to go crazy war and peace on this. I'm just.
[00:09:01] Speaker A: No, it's a great question. I mean it certainly makes you stop and think because there's a lot of elements to what we've been talking about throughout our series and which tie into the more national tone of how the investment is evolving that is really democratizing that access to the investment. Right. It's making it easier for more people to get into.
I don't think this is one of those areas where that's actually easier. You still have to put up the money, right?
[00:09:24] Speaker B: Oh, absolutely.
[00:09:25] Speaker A: Back. But if the problem if the part of the one of the barriers asks the capital right. Is the cost of play is still there. You're just entitled. You're just going to. You're going to win in the end. Right. You're going to be able to get it back. But you know, for, for so many people it's, it's having access to be able to pay that in the first place. So you know, whether you have a deal with a lawyer that will defer it or whether you have access to capital somewhere else. We mentioned earlier about one of our key strategic partners in tax sale resources that has access to, to financing where most traditional banks do not. I mean you might need to still rely on that. But the fact that you can get that, that's the game changer here. And that's equal to everybody participates.
[00:10:08] Speaker B: No, that's, that's a great clarification. And, and it kind of brings us to the, to I would say the, the, the wrap up on the cost recovery.
So definitely gravitating towards recovering of costs maybe opens it up to, to more investors.
Is there any, I mean, and, and, and I thought you, I thought you clarified that when you're talking about recovering these costs, documentation of all the steps you went through it really it's incumbent upon these investors to hire firms that have experience in this because if you don't document what you did, it might, number one, if you have to show cost to get a higher fee, you want that documentation to be, you know, really, really well developed.
[00:10:54] Speaker A: It's preserving your evidence so that you can get repaid. Because if you do all this work.
[00:10:58] Speaker B: Exactly.
[00:10:59] Speaker A: Can't prove it, you're not going to get it back. And remember that the last, the, the arbiter of whether you get this back or not, after you, let's assume you've done all the work. Right. And you've preserved your evidence.
Is the judge right?
The judge is going to sign off on what the bound is that you're entitled to give back before they send it to auction. So if you are not able to prove to that judge that you did these things and you're entitled to get that back, you're not going to get it. So you better preserve your evidence.
[00:11:25] Speaker B: Let's just go down a quick rabbit hole. How consistent are the judges in how they treat quiet title foreclosure actions? Is it consistent?
[00:11:34] Speaker A: It's the furthest thing from oh, you know, anyone who's practicing out there who's listening as an attorney, you know this and you know, or he's a portfolio investor, he's you know, institutional investment, you know that it changes judge to judge within the same parish or county.
[00:11:50] Speaker B: Oh absolutely.
[00:11:51] Speaker A: And so it's, you really need to develop your own systemization to offset that. You're never going to be able to re. You know, rein in all different variables like like different personalities of judges, et cetera. All you can do is mitigate those as much as possible so that in the end you win.
[00:12:07] Speaker B: Exactly. So Cost Recovery Is there anything else that the listeners need to know about cost recovery before we transition to something different?
[00:12:17] Speaker A: It is only in the say that it is an integral part of how the modern tax level estimate is evolving and to create operational efficiency to drive costs down is recovering cost is a part of driving costs down is preserving and recovering costs so that your return is not being diluted by the lack of the access to the surplus equity part of the investment. From the pre Tyler case.
[00:12:44] Speaker B: If somebody wanted to learn more about cost recovery in these types of actions in Louisiana, where would they go?
[00:12:52] Speaker A: The best place to go is jurisdeed.com that is our company jurisd.com where we are creating a platform that's nationwide to make tax and investing as easy as investing in your 401k. You can invest like the pros without having to beat one. Also, follow us on social media, YouTube, subscribe to our channel. We're going to be publishing content regularly as well as on LinkedIn, so follow us there and till then we look forward to seeing you in the next episode.
