4 Investigates: City missing out on millions of unpaid property liens

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by Lucy Bustamante / Eyewitness News lbustamante@wwltv.com

wwltv.com

Posted on July 21, 2009 at 10:00 PM

Updated Thursday, Oct 22 at 3:22 PM

NEW ORLEANS - The city of New Orleans could collect almost $3 million this year from property owners who haven't paid liens against their properties.

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The city admits it is its own fault after more than 10 years of failing to enforce its own property laws, but this week an ordinance will force those property owners to pay.

Just from the liens against 730 St. Louis St. in the French Quarter, the city could've collected $10,500 years ago from the man who owns this property - Mike Motwani.

Since 1999, the city has not collected $2.7 million on more than 3700 properties all over the city. Most of them were cited for health violations and properties suggested for demolition.

Councilwoman Stacy Head said she realized that people didn't have to pay their liens in order to pay their property taxes when they tried to enforce the rules downtown.

Andy why did the city stop collecting thousands a year more than 10 years ago?

"It was so long ago that I'm sure we lost some of that knowledge as to why we stopped," answered Head.

Even Head said she couldn't really get a clear answer from the New Orleans Finance Department, but she said she would rather focus on the fact that they are supporting her ordinance to start collecting those fees again.

"We're making it incredibly clear that you have to know that if you're going to pay property taxes, you also have to pay your liens at the same time," said Head. "We won't as a city any longer accept property tax payments without accepting the lien payments at the same time."

Head said the ordinance will target people who know the loophole - like the Motwanis, who for example owe $2200 in liens on 914 Canal St. and here at 801 Convention Center Blvd. for $5000.

"And we have found that the overwhelming majority of properties that are like this where people pay only the taxes and not the liens are fairly sophisticated property owners who operate in the downtown and the French Quarter area," said Head.

That includes the Motwani family, who own the Canal Street property and at least 10 properties that face Canal Street, not to mention every ATM that's been installed without permission in the French Quarter.

"That family owns a substantial amount in the downtown area, so anything they do to improve their property is going to improve the city as a whole," Head concluded.

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