City-Owned Property (Real Estate)
Sales process for city-owned property
The City may sell (through public auction) immovable property (real estate) that is no longer needed for public purpose. These particular auctions are different than the Sheriff’s auctions or NORA’s auctions. The process for bringing property any city owned property to auction is lengthy. The steps are as follows:
- The Department of Property Management, through the Division of Real Estate and Records, locates property that the City is not using. A constituent may bring a request regarding a particular property to the Division and request that it be sold at public auction.
- If the property is deemed saleable, the requested sale is presented to the Planning Advisory Committee (PAC) for review, comments, and recommendations. If any city department may determine that the property is still needed for public use then the sale will not move forward.
- If approved by PAC, the requested sale is then submitted to the City Planning Commission (CPC) for approval or denial. CPC may deny, approve, or conditionally approve the auction of a property. CPC may place provisos on the sale of the property, which will require that certain terms and/or obligations are met prior to or as part of the sale.
- If the sale is approved or conditionally approved with provisos, the property is appraised to determine fair market value.
- After a value is determined, the auction of the property must be approved by the City Council. An ordinance containing the property description, appraised value, and any provisos set by the CPC is introduced to the City Council.
- If the Ordinance is passed and approved by the Mayor, an auction date and time is set and an advertisement runs in the Times Picayune Newspaper three times over a span of thirty days. The property may have an “open house” during this period.
- At least thirty days after the ordinance has been signed by the Mayor, the property auction is held. The starting bid is the fair market value of the property. Auctions are held in the City Council Chambers at City Hall.
- A winning bidder must deposit 10% of the winning bid amount with the Real Estate and Records Division (Room 5W06) within one (1) hour of the completion of the auction. The deposit must be in cash, certified check, or money order and is NON-REFUNDABLE. If a deposit is not timely made, the property is offered to the second highest bidder.
- The act of sale is sent to the City Law Department for review and signature. The purchaser typically has 120 days to coordinate with the Law Department to complete the sale. If there is a proviso attached to the property sale by the CPC, it will become part of the act of sale. The remainder of the payment, as well as costs associated with promogulation of the ordinance and advertising are all due at the signing of the act of sale.
Is this the same property auction as NORA, tax, tax adjudicated or the Sheriff’s Auction?
No. These are properties that are owned and were used by the City but are determined “no longer needed for public purpose.”
My non-profit/special interest needs property. Can the City donate property?
In accordance with Article 7, Section 14 of the Louisiana Constitution, the City cannot donate non-housing property. This office generally does not sell housing.
Why does the City use public auctions instead of private sales?
The Home Rule Charter requires that property be sold at public auction, with very limited exceptions.
If a property is not zoned the same as the rest of the neighborhood, can I get it changed?
Generally the property zoning can be changed to make a property consistent with the surrounding neighborhood through application to the City Planning Commission. Please contact the Planning Commission for further information.
What are the additional costs that are added to the winning bid price?
Additional costs, over the winning bid must be paid to complete the sale. These costs include: appraisal, Clerk of Court promulgation costs, City Notary fees, possible resubdivision fees and other possible costs.
If I win the auction, how much do I need to deposit and when?
10% of the bid price is due in cash, money order, or certified funds within one hour of the auction’s completion.
What form of currency does the deposit need to be in?
Cash, certified check, or money order ONLY
What happens if I do not deposit the funds with Real Estate and Records within one hour?
The property will be offered to the second highest bidder.
Is the deposit refundable?
The deposit is NOT refundable. It is considered an earnest payment.
What are the requirements for purchase, other than money?
The City of New Orleans cannot contract with convicted felons or any party that owes taxes to the City of New Orleans.
Also, required paperwork will be distributed to the winning bidder. It includes a tax clearance affidavit, vendor registration form, and other required information. All documents must be completed prior to the Act of Sale date.
Can anybody bid at the auction and buy this property?
Some property sales have restrictions that prevent everyone from bidding at auction. For example, a parcel that not a legal lot and is too small to allow for construction may only be available to neighboring property owners, who would be required to “resubdivide” the parcel into their existing parcels. City Planning Commission sets the restrictions for property sales (Home Rule Charter Section 6-306). Also, City of New Orleans' employees and their immediate families are not permitted to contract with the City.
How long does it take to complete the transfer of the property?
Depending on when the Division of Real Estate and Records receives the appropriate paperwork from the purchaser, a transfer may take place within three months.
How long do I have to complete the sale?
Are there private sales of city property?
The City may sell non-housing property to other governmental entities through private sale for fair market value. Other limited exceptions exist.
How is the starting bid set?
The starting bid is set at fair market value.
There is City-owned property that I am interested in purchasing. Who do I contact?
The Division only sells property that is owned by the City and no longer needed for public purpose. Contact Real Estate and Records at (504) 658-3615.
What are the rehabilitation requirements for the properties?
The following terms shall be in the Act of Sale:
Purchaser of the Property on this ___ day of ______________, 2013, hereby agrees to maintain, renovate, develop, and improve the Property within the time frame and terms below. All work done upon the Property shall be in accordance with the requirements of the New Orleans City Code and the New Orleans Building Code, including any applicable historic district provisions. Purchase of the Property is subject to the following additional conditions:
a) Within sixty (60) days of recordation of Act of Sale, Purchaser shall clean, repair, secure, or otherwise remove the conditions of blight upon the property.
b) Within eighteen (18) months from recordation of Act of Sale, Purchaser shall obtain a Certificate of Occupancy from the Department of Safety and Permits.
If, in the determination of the Department of Property Management through a recommendation of the Department of Safety and Permits and/or the Department of Code Enforcement, purchaser has failed to comply with any condition set forth above, it shall notify the Purchaser and if Purchaser fails to correct said violations within 30 days, sale of the Property shall be dissolved of right, title shall revert to the City of New Orleans, and all sums previously paid by Purchaser, including the Purchase price, shall be forfeited by Purchaser and retained by the City of New Orleans as liquidated damages. Purchaser expressly waives formal demand, notice of default, citation and legal delays, consents to summary procedure, and confesses judgment rescinding and dissolving sale, reverting title, and forfeiting all sums previously paid.
Once the conditions set forth hereinabove have been satisfied, the City of New Orleans shall execute such documents as are necessary to release this right of reversion from title.
The City of New Orleans hereby agrees that it shall subordinate the right of transfer set forth above in favor of Purchaser’s construction lender and, for that purpose, does hereby consent and agree to execute all reasonable documents, including an Act of Subrogation to subordinate the City of New Orleans’ interest in the Property to Purchaser’s construction lender.