In the rare occurrence when a tax collector fails to send any presale notice and when neither the tax collector nor the tax sale purchaser cure the pre-sale defect by sending post-sale notice, the tax debtor can file suit to have the tax sale cancelled.1 The difference between cancellation and nullification is slightly favorable economically for the tax debtor, but can be devastating for the tax sale purchaser.
When a tax sale is canceled, the taxing authority must return to the tax sale purchaser only the amount of the taxes paid. In other words, the tax sale purchaser will not receive any interest. In turn, the tax debtor is relieved of the obligation to make the 5% redemption payment and to pay 1% monthly interest. However, the tax debtor is still liable to the taxing authority for 1% per month since the tax sale.2
Because proving the elements of a cancellation claim is more difficult than proving those of a redemption nullity claim, best practice is to bring a cancellation claim in the alternative to a redemption nullity claim. Additionally, courts have also discouraged cancellation claims due to the lack of interest paid to the tax sale purchaser.3
- 1La. R.S. 47:2153(C)(1) (“In the absence of actual notice of the sale to a tax sale party, including a transferee, or the demonstration of a reasonable effort to provide notice, where the name and address of the tax sale party were reasonably ascertainable or where the transfer was recorded after the tax collector completed his pre-sale tax sale party research, the tax collector shall cancel the sale of the property and refund the tax sale purchaser the tax sale purchase price.”).
- 2La. R.S. 47:2127(B).
- 3See Klein v. Henderson, 2021-0317 (La. App. 4 Cir. 11/17/21), 332 So. 3d 764.