[00:00:00] Speaker A: There's a seven year shelf life for Louisiana tax liens now, which never used to happen before. It was perpetual, it never expired, there was no statute of limitations.
So now you have seven years total from the time the lien's reported to complete not just your notifications, but also initiate foreclosure.
The biggest consequence of all is one of the biggest changes of the new legal system in Louisiana, which is to bring the redemption period to an end.
For the first time ever, including as compared to Louisiana's prior law, you can Recover up to $500 of your redemption period compliance cost, the cost of sending the notice, which includes the research and all the things that go involved in it, whereas before it was sunk cost.
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 innovative Investor podcast where technology and expertise combine to create success from tax lien investing for everyone.
Today we're continuing our Louisiana deep dive into the new 2026 tax sales system in Louisiana. And we're focusing on the redemption period and mandatory notices.
It may sound technical, but the consequences make it anything but boring. I'm Stephen Morrell, founder and CEO of jurisd and with me as always is my co founder and co host George Jackson.
[00:01:34] Speaker B: Hey folks, glad to be here.
So, yeah, so notices might not sound exciting, but the consequences of failing to send them, yeah, certainly can get exciting because under the new law there's an additional requirement.
So to keep investors out of trouble. Stay. Steven's going to walk us through the differences between the old law and the new law in Louisiana. Who has to do what, what it is all, what it all means to innovative investors. Well, all investors.
[00:01:59] Speaker A: But yeah, it's a big deal. It sounds like something that you don't want to sit down and listen to, but unfortunately this is really where one of the most important components of the entire life cycle of the lean in many states, including Louisiana. So under the pre. Under the law that existed before 2026, the sheriff or the tax collector was required to send out the legal notices to all interested parties, people who have an interest in the property during the redemption period. And then investors were given the option to do so also if they wanted to. But there was no means of cost recovery to do that. There was also a fixed time period in which to do that. Within the three year redemption period under the new law, the biggest change is there's a mandate that the investors send out the notices. The sheriff's not required to send them out is literally, is a mandatory step.
And that's a key shift in the change because if you're still planning on the old system Moving into post 2026, you could really impair your investments if you're not in compliance with that requirement.
[00:03:13] Speaker B: Okay, so speaking of compliance, before we get to, you know, the consequences of non compliance, let's talk about so who exactly must be notified. So why don't you walk me through which parties need to be notified?
[00:03:28] Speaker A: Yeah, so it's when we say interested parties, what we're talking about is someone who has acquired an act in ownership or mortgage or lien interest, any kind of legally recognized interest in that piece of property. That starts with the public records. And you know, so the mortgage records, land records, if it's an ownership, you know, a deed, a donation, any kind of divestiture like, like from a succession or probate and then all the way to the lien side mortgages and liens and judgments, anyone who has a recorded interest. But as soon as those documents are recorded, that becomes a very static evidence of interest because it's not tracking real life what happens after you record that document.
So what you're really trying to find out is who has an, a current active interest in the property, which is part of the definition. So they doesn't stop the process to determine who that is. Doesn't stop with just going to the public records because that's just telling you what existed at the time that it was recorded. You need to know what is it right at the time you're doing the research. So you have to take those, the interest that you get from that research in the public records and then do some investigative research on whether that's still, they're still around and if they are, where are they? Because you're going to have to send them a letter and you can't just go off of the last address that was in those documents to find them. So it's an onerous task, but it is something that is put on the investors now.
[00:04:56] Speaker B: So it's an onerous task. And so we talked about it earlier. What are the consequences if you just, if this investor just doesn't send the news, what happens?
[00:05:08] Speaker A: Well, the biggest consequence of all is one of the biggest changes of the new legal system in Louisiana, which is to bring the redemption period to an end.
That power is now literally in the hands of the investor as opposed to the past. The old law, it just ran as a running of time. It was three years from the time the tax lien certificate was recorded, period. No matter what you did under the new law, it doesn't. The last six months of the redemption period, and we're talking still three years. But that last six months of the three year period so doesn't begin to run until you've sent all of your legal notices. So you have to prove you've done it as well.
And so you know, you might by, by waiting too long, you could add time to your to, to when you can get your liquidation for your lien. So it's literally put back into the investor's hands. And as a secondary consequence, also another temporal element is that there's a seven year shelf life for Louisiana tax liens now, which never used to happen before. It was perpetual, it never expired. There was no statute of limitations. So now you have seven years total from the time the lien's recorded to complete not just your notifications, but also initiate foreclosure, which we'll get into later.
But the, you have the three year redemption period which has to pass and then you have four years, minimum or maximum. You have four more years for it to then complete the process of foreclosing on the lien and getting to get your money back.
And so if you're waiting too long to send your notices, you might run out of time altogether to foreclosing and therefore if that happens, you're completely lost your rights in the lien and it's not collectible anymore.
[00:06:55] Speaker B: So assuming the investors do send the notices and all that, what, what these notices, what effect does the sending of the notices have on redemption rates? You know, I know the redemption rates are already pretty high, but is that part, you know, walk me through what the noticing, how that affects the redemption.
[00:07:15] Speaker A: That's a great question. It's a key factor in really what, what we created at Jurist was to be able to, to create better results and not just do the work of sending notices. So we, you know, it's. When you use intelligence and thought behind to whom are you sending these notices, where are they? And making sure that you're not just checking the box of legal compliance.
And what the Constitution and all the courts tell you constitutes reasonable efforts of sending out notifications to the right people.
It also has an impact on the percentage chance that that lien will be redeemed.
If you're sending it out to people who are deceased or who moved away because that's as far as you look, then your chances of getting redeemed are much lower. Now under the old system, if you happen to make it out of the redemption period without your lien being redeemed, and you could simply file a quiet title action and convert your lien to a deed, and you might get a big windfall from equity.
That's no longer the case, of course, from the Tyler Hennepin case few years ago. In the US Supreme Court case, there's no more retaining of surplus. And so under Louisiana's new system, likewise, it's consistent with the new Supreme Court opinion that any surplus is going to be reserved for the homeowner. So your only play at foreclosure if he doesn't redeem in the redemption period is to just to liquidate your lien and get paid back what you're owed.
So the reason why I say all that right now under this context is because you're more than ever, especially given the new law, you really are playing for the redemption return. You're praying to get paid back. So therefore, your strategy has to be to maximize your redemption rate. And what we've shown through the years we've been doing this for investors at Jersey is between 10 and 15% of a higher rate of redemption when they used our system for sending out intelligent notices as opposed to whatever they were doing in the past, which was something less sophisticated and with a lot less effort.
[00:09:22] Speaker B: So would you say that, that this intelligent notice, I mean, it, it de facto kind of drives liquidity if, if I'm, if I'm reading between the lines, is that what you're trying to, it's
[00:09:32] Speaker A: one of many factors, but it's a, it's a, it's a, it's an important one to, to, to optimize and maximize redemption rates, for sure.
[00:09:40] Speaker B: Gotcha. Well, so this intelligent noticing, what does that, what does that have to do with.
How do you extrapolate that? I mean, we're talking about Louisiana, but how do you project that out over, you know, multiple states in terms of, you know, potentially like scalability or, you know, this going beyond the state lines?
[00:10:02] Speaker A: Well, yeah, no, it's, it's a, it's not a Louisiana task by any stretch. I mean, this is something that is just a, a strategy of optimizing your, your portfolio level approach to getting the returns you're looking for across state lines, tracking down interested parties and serving them with, with good, you know, good notice and timely notice is constitutionally required in every state. And It's a good idea in every state. It's going to influence returns in every state. It doesn't really matter. So. But the more you do it across different states, the bigger your portfolio grows.
It becomes more of a resource draining, administrative and logistical task that can really soak up a lot of your time and energy and becomes not cost effective for most investors to do that in house.
So more and more today, especially because surplus is off the table in the tax lien investing world, the play is to optimize the efficacy of your operations.
And a lot of that means outsourcing things like research and legal notifications to other resources and service providers that can do it at scale.
[00:11:15] Speaker B: So because things are state specific and all that, how would someone go about broadening their portfolio? So let's say someone is, you know, they've got liens in Texas, Ohio, you know, Tennessee, wherever they want to go in, maybe they want to go into other states, potentially even Louisiana. What would your advice, you know, if they wanted to broaden that portfolio and manage that, you know, state complexity, what, how would they go about doing that?
[00:11:44] Speaker A: So every state's different as far as how exactly you need to do this. Now we talked about how that, that just a second ago that the, the at a high level, the act of sending out smart notices to the right people, the right time is not only mandatory, but a good idea for your returns, your bottom line.
But how do you successfully execute on that is going to change wildly state by state.
Whether it's the timing of it or the content of the notice or how extensive of the body of interested parties you have to send, how many times, you know, so on and so forth. It's a lot of nuance and they're usually unforgiving. Every single state's going to have their own set of requirements of what to do and you just have to keep up with them all. It's tough to do, but it's something that if you're going to want to expand your portfolio across state lines, get the more of the scale your business and achieve the returns that are possible with taxing, investing, it comes with a territory you're going to have to understand, figure out, trust the professionals who are in, who know the law in every single state and learn it and execute on it and keep track of it. You also need to preserve all your evidence.
So everything you're doing, you're going to have to prove to somebody at some point in time that you did it.
And so it's not only just doing the work, but Also proving you did it as well in compliance with each state's requirements.
[00:13:13] Speaker B: So no, that's great information. So if I'm tying this whole thing together, notice is mandatory.
Yeah, that's number one.
Costs are recoverable. So you know.
[00:13:23] Speaker A: Yeah, yeah, we didn't even cover that in, in under the new law, the recoverability of the cost. I mean that's, that's, that's one of the biggest, you know, aspects of the, of this new requirement. So you think, well, Louisiana's changed our laws and now it's required. Well, that stinks. Okay, well, yes, but for the first time ever, including as compared to Louisiana's prior law, you can Recover up to $500 of your, of your redemption period compliance cost, the cost of sending the notice, which includes the research and all the things that go involved in it.
Whereas before it was sunk cost.
If you got redeemed, you were never getting that money back. It was not part of the redemption. Now there's a process and you have to do that correctly as well under the new law to make sure that your cost is included in, in a potential redemption through the tax collector, which is where that redemption needs, that reimbursement can happen or should happen.
You have to notify the collector that you've done this work and prove you did it. Remember I said a second ago, keep your evidence, preserve it. Well, this is the first time that you're, this is the first of several places where you're going to need to show what you did if you want to get that money back. But now it used to be under the old law where investors were kind of leery about taking these extra efforts, not because they were thinking that they weren't a good idea or they couldn't influence the bottom line, but because there was no method to recover your money. So it just didn't make financial sense a lot of times, even though if it was a smart idea. Now under the new law, it's a no brainer. It's an absolute no brainer. You have to do it. But, but now you're going to get your money back. So it's just, just bake it into your system of, you know, investing and being successful in Louis Tax liens and there are many other states that are moving to the same process as Louisiana really just transformed their whole system and I think it's it. We'll talk about this in a later podcast episode, but I think Louisiana system is going to become a model for many other states to follow.
So.
[00:15:28] Speaker B: And if that is the case, What I'm picking up is we, and I said it earlier, but notice is mandatory and, and those costs are recoverable. But unless I'm crazy, you get to recover. The cost of sending these notices out and extending the notices out accelerates these capital cycles.
It improves redemption rates, but also accelerates your journey to liquidity. I mean, that's a true statement.
[00:15:56] Speaker A: Absolutely.
[00:15:57] Speaker B: You're getting reimbursed to accelerate your own capital cycles. Is that correct?
[00:16:02] Speaker A: That's right. Pretty.
[00:16:04] Speaker B: It sounds pretty awesome. I mean that's a whole new deal.
[00:16:07] Speaker A: You know what, it's a great example of sort of the inherent nature of the tax lien investing industry as a whole. One of the key things that, you know, components of that this investment industry that Jurist is trying to is breaking down or solving is, hey, this is a magnificent investment vehicle. But not a lot of people do it. Why? Because it's so complex and so complicated and so, you know, fragmented by state by state. This is a great example of where that is exhibited in these different state, these laws for mandating notices. But hey, if you do it, it's fantastic. But doing it is really hard.
So then you have to kind of like, well, I'm going to do it, but it's going to be, it's not going to be fun, it's going to be tough to do. I'm not sure I could do it or want to do it.
But you know, obviously with the advent of technology and new service providers, you know, like Jurist, that is something that is now makes it easy to make that decision.
Yes, you know, it's a good idea. Yes. You know, it will. You have to do it. So comply, you know, optimize your bottom line. And now you don't have to worry about the pain of doing it yourself because of modern services like Jersey.
[00:17:25] Speaker B: Sounds good to me. So is there anything else before we.
[00:17:29] Speaker A: No, that's it on this. I mean, you know, this is like I said, it sounds boring, but we can't overstate it. That have the importance of this one aspect of the entire process. Plus remember like 90% of all tax liens are going to redeem and you know, on average across states. And so this is where 90% of your portfolio lies. I mean, this is where you know you're going to make or break it and not in the foreclosure side of things.
Not that that's not important. And in fact, that's a great segue because in the next episode we're going to jump into Louisiana's new system for converting your matured non redeemed tax lien into into liquidity instead of going through a quiet title process where you become the property owner to then go sell as as reo, which is what the old system was or a partition if you own partial ownership interest to now and today on the new law it's just like a mortgage foreclosure. It's similar to the if you're, if you're been investing in tax ins for a while, you might be familiar with the Florida system very, very similar to that. After the redemption period you're going to have to file an action with a lawyer in court and seek to foreclose the right of redemption and be paid out just like I'm at a public auction just like any other know foreclosure sale. So that's the new system for that. We'll get in, we'll jump into how the, how that works and how you can take advantage of that and optimize those processes as well in the next episode.
[00:18:59] Speaker B: So where can people find Juris Deed related information and and what all what all is offered?
[00:19:07] Speaker A: Yeah. So check us out@j jurisd.com we have a wait list right now for the release of our new beta application which will allow investors to manage their their portfolio from one county, one state or multiple states from start to finish with all the compliance taken care of. For you.
That'
[email protected] and that'll be released in a few months.
We're also on YouTube, LinkedIn and all the podcast channels like Spotify and Apple. So check us out there.
[00:19:38] Speaker B: Sounds good.
[00:19:40] Speaker A: And thanks again for being with us today with me as always, George Jackson. We we appreciate you being with us. Please check out the show notes for services like Louisiana Legal Services for tax deed foreclosures as well as for asset management through our sister company deedwolf. We appreciate you being here. Look forward to seeing you in the next episode.
[00:20:00] Speaker B: Thanks folks.
