CivicSource CEO addresses city: Answers questions about adjudicated property sales
Published 7:00 am Friday, March 4, 2016
After a question and answer session with the CEO of CivicSource, Bryan Barrios, the Bogalusa City Council on Tuesday seemed ready to move forward with the real estate management company.
CivicSource manages tax-distressed properties for municipalities across the state and tries to get them back into the hands of landowners and onto the tax rolls. The company has been working with the city for months now, but it will not go forward finalizing a handful of property sales until the council approves some changes in its municipal laws.
The council balked in February when presented with the new terms. Council members were mainly concerned that CivicSource’s prices were too high, and the council asked a letter be drafted and sent to the company, terminating their contract with the city. However, representatives from the company have pointed out that the reason the property, which in some cases is valued at no more than $1,000, is marked up to $4,000 or more is because the company provides a clean title with title insurance to the land.
Without a clean title and title insurance, buyers cannot get a bank mortgage and they run the risk of a lawsuit if someone else has claim on the land. Barrios made much the same argument Tuesday evening. He said CivicSource performs a 30-year title search on each piece of property and this includes an examination of the public record for anyone who has ever had any interest in the property.
Barrios said that everyone CivicSource finds who may have an interest will be mailed a certified letter alerting them that the property is delinquent, giving them the chance to redeem it. After that, CivicSource places two public advertisements and then if no one responds to the notices that the property is delinquent, they put it up for auction. So far, Barrios said CivicSource has put 97 properties in Bogalusa up for auction.
Barrios pointed out that if the city doesn’t approve the new codes, his company cannot complete pending property sales. Besides five sales previously announced, CivicSource has two more pieces of property almost ready to sell — if the city will approve the code changes.
Barrios also took time Tuesday to reassure residents that CivicSource would not “take someone’s personal property.” He said the company only sells property approved by the city and that has no claims on it.
“We do not sell occupied property and the reason we don’t sell it is because we can’t insure it,” he said. “Occupied property will often times result in litigation and also we don’t want to be in the business of putting the little old lady out on the street.”
Councilwoman Gloria Kates said in fact there was a piece of occupied property listed for sale on the CivicSource website, but Barrios said he would remove it. On Wednesday, he said the property was no longer listed.
Barrios added that if neighbors wanted to claim a tax-distressed lot adjacent to their property, they could do that, and CivicSource would take the property from its list.
Barrios also took several questions from citizens who attended Tuesday’s meeting.
John McNabb said he had bought some of the properties from CivicSource and he asked Barrios what would happen to his money if the city didn’t approve the changes to its code.
“We wouldn’t be able to complete the sale,” Barrios said. “Therefore, the consumer would have to get their money back. Which becomes an interesting situation because we’ve borne all the cost on all of this, and frankly the deposit only covers a fraction of it.”
In addition, the city would not get any tax revenue. Another member of the public, Gwendolyn Frances, said she’d bought taxed distressed properties after hiring an attorney and having him perform a title search. She argued the city didn’t need to hire CivicSource, because anyone can do what CivicSource is doing.
“Do it the right way, do it the way it has always been on the books and then you don’t have a problem,” she said. “But if you start doing all this, people will get nervous and upset. If you do it, then it will bypass a lot of people who don’t know the process. There are a lot of people who don’t know how to turn on a computer.”
Barrios said people could still bypass his company and hire their own attorneys and perform their own title searches for tax distressed properties that CivicSource hasn’t already cleared. He noted most people don’t want to spend the time to do what his company is offering.
“I applaud that you have figured the riddle out, but it’s certainly more difficult than a person who wants to put down a $750 deposit and sit back and then wait to get a title,” he said.
Mayor Wendy Perrette pointed out that no matter who does the title clearance work — the potential landowner or CivicSource — the city cannot do it. Consequently, the city has not been able to move these properties back onto the tax roll.
She said she’s begged the council not to break the city’s contract with CivicSource, and after the meeting, most of the council members seemed satisfied to continue with CivicSource.
However, the council must still approve the new ordinance that allows CivicSource to sell properties in Bogalusa.
Council president Sherry Fortenberry said that would probably happen next month.
“Probably by the next meeting, we will re-introduce the ordinance,” she said. “But then it will just be introduced. It will be approved at the next meeting after that, next month.”
The only ordinance up for adoption was an amended ordinance from Kates. However, other council members said they were confused by the ordinance, which would have funded revitalization for some parks and recreational areas with deficiencies. After brief discussion, the amended ordinance was tabled.