The City of Pineville, Louisiana

WHAT ARE THE RISKS ASSOCIATED WITH A TAX LIEN CERTIFICATE SALE?

The purchase of a Tax Lien Certificate is a risky investment. Investors are strongly advised to investigate the property they intend to purchase and know exactly what they are buying before bidding at the Tax Lien Certificate Sale. The Collector gives no guarantees and makes no representations regarding property title or the nature of the interest in the property that is listed. The Collector gives no guarantees and makes no representations regarding prompt redemption or return of the lien amount, etc.

Risks include, but are not limited to:

 

1. Investment Capital is frozen: The money invested in the Tax Lien Certificate is unavailable for use. From the date of the Tax Lien Certificate Sale until the property is redeemed or until foreclosure is finalized, there is no access to the money invested. Emergency funds should never be used as investment capital, as the funds will be “frozen” for a time.
2. The property owner may file bankruptcy. In the event the property owner files for protection under the bankruptcy law, the certificate holder is prevented from enforcing the lien until the bankruptcy is released. The bankruptcy court can lower the interest rate and order payments to be made over a period of time.