135.00.19 Ark. Code R. 001
The authority for these Rules ("Rules") is power given to the Commissioner of State Lands for the State of Arkansas by Act 626 of 1983, as amended, and other applicable laws.
The counties in Arkansas certify tax-delinquent property to the Commissioner of State Lands (the "Commissioner"). Upon certification, legal title to the property vests in the State of Arkansas in the care of the Commissioner, although the Commissioner does not take physical possession of it. During the time that property is held by the State, the Commissioner does not enter upon the property and has no duty to maintain it.
The Commissioner is charged with either collecting taxes on the properties or, if the delinquent taxes are not paid in full before the date set for sale, selling the property. The Commissioner offers the property for sale at a public auction that is usually held in the county in which the property is located. If the property does not sell, then the Commissioner offers the property for sale at ongoing Post-Auction Sales beginning thirty (30) days after the date of the public auction.
The purpose of these Rules is to carry out the provisions of Act 626 of 1983, as amended. Pursuant to section 7 of Act 626 of 1983, as amended, these rules shall have the full force and effect of law.
These Rules, having been promulgated and adopted by the Commissioner, shall be in full force and effect until they are amended or repealed pursuant to law. All previous Rules adopted and published by the Commissioner are hereby superseded and repealed insofar as they may be different from or in conflict with the Rules herein.
Except where specifically noted, these Rules apply to all categories of sales held by the Commissioner. Rules not applying to all categories of sales will be found under one of the more specific Titles that follow. These Rules should be regarded as being supplementary to, and not in replacement of and in compliance with, the laws of this State relating to the matters covered by these Rules.
Nothing in these Rules shall apply to the sale of tax-delinquent land that has been or will be certified to the Commissioner for tax years prior to 1978.
It is intended that these Rules are severable and that if any of these Rules, or any parts thereof, shall be declared invalid, all other unaffected Rules, or parts thereof, shall remain in full force and effect.
The following definitions are applicable to all Rules:
Bid- An offer to purchase a property made by a prospective buyer, whether in person or via mail.
Certification- The process by which each county certifies a list of tax delinquent real property parcels to the State of Arkansas in the care of the Commissioner on a yearly basis.
Certified Funds- Payment that is guaranteed to clear or settle by a bank or business, including without limitation a credit card, debit card, electronic check, escrow check, money order, cashier's check, or certified bank check.
Costs- Actual costs expended by the Commissioner of State Lands.
Excess Proceeds- Money received from a Bid or sale that is in excess of the taxes, fees, penalties, interest, and costs due on the property at the time of sale, as well as any fees due after the sale.
Homestead- A parcel of tax-delinquent land certified to the Commissioner of State Lands that has been designated by the county assessor as a homestead eligible for a homestead credit under § 26-26-1118, and has been properly claimed as a homestead by the owner.
Interested Party- Any person, firm, corporation, partnership, or other legal entity holding title to or an interest in the tax-delinquent land by virtue of a recorded instrument at the time of Certification. Mere notice of a sale by mail or publication does not convey legal status to the named entity or individual that it is an "interested party" as defined under the statutes or these Rules.
Limited Warranty Deed- A unique deed generated by the Commissioner of State Lands that conveys a limited interest in a property in exchange for the purchaser paying the accepted Bid amount for the property. In most instances a Limited Warranty Deed is used by a purchaser to quiet title to the property and receive full marketable title in fee simple from a court.
Litigation Period- The maximum time after the sale of a tax-delinquent property that legal proceedings based on that sale may be initiated by statute.
Notice of Sale- Notification sent to the Owner or other Interested Parties as identified by the Commissioner of State Lands, as having a potential interest in a tax-delinquent property that alerts the recipient that the State is going to take an action that will deny the recipient of any rights they may have in the property, unless they take immediate action to pay the taxes, penalties, interest, fees, and costs. Notice is also provided by publication in a newspaper having general circulation in the county where the land is located.
Owner- Any person, firm, corporation, partnership, or other legal entity holding title to or an interest in the tax-delinquent land by virtue of a recorded instrument at the time of Certification. Mere notice of a sale by mail or publication does not convey legal status to the named entity or individual that it is an "owner" as defined under the statutes or these Rules.
Post-Auction Sale- A sale consisting of Bids placed through the mail or in person on a tax-delinquent property that was previously offered at a Public Auction but not sold. Post-auction property is sold on a first come, first serve basis. Unlike a Public Auction, a Post-Auction Sale is initiated solely by an offer being made on the unsold property.
Public Auction- An auction for the sale of tax-delinquent property where bidders are physically assembled and Bids accepted. Public Auctions may include Bids made through the mail, as well as Bids made by those present. Public Auctions are usually held in the county in which the land is located.
Redemption/Redeem- After a sale by public auction or post-auction sale, a parcel may be redeemed as set forth in these rules. A parcel may also be redeemed at any time after Certification and prior to sale. Upon Redemption, a Redemption Deed will be issued and filed with the county.
Redemption Deed- Upon Redemption of property as set forth by the statutes and herein, the Commissioner shall issue a redemption deed. Issuance of a redemption deed does not convey any title in or establish ownership of the person in whose name the deed is issued. The deed serves as proof that payment has been received by the Commissioner of State Lands, and does not convey or change the legal ownership to the property redeemed. The deed shows that the state's interest is extinguished by the Redemption.
Taxes- As used herein, the use of the term "taxes" shall include any and all taxes, penalties, interest, fees, and costs whatsoever due and owing on the property. Any amounts owing continue to accrue additional taxes, penalties, interest, fees, and costs until such time as the property is either sold or Redeemed.
All land offered for sale by the Commissioner has been certified to the State by the county in which the land is located for non-payment of real-property taxes, penalties, interest, fees, and costs. The sale date shall be no earlier than one (1) year after the tax-delinquent land is certified to the Commissioner.
The property being offered is identified by legal description, lot and block number, or metes and bounds, as well as by parcel number, all as certified by the county. Further, the property is not identified by physical address.
A list of tax delinquent real properties being offered for sale will be available at the Public Auction or through the Commissioner's website, http://www.cosl.org/. A list of Post-Auction Sale properties available for sale will be available through the Commissioner's website. Lists of both Public Auction and Post-Auction Sale properties are subject to change at any time.
All liens and encumbrances are not necessarily extinguished by tax sales. Offered parcels may be subject to liens, easements, building or use restrictions, or governmental interests. The parcels remain subject to the lien of taxes for the preceding calendar year that are not yet due and payable, which may be owed to the county collector.
The Commissioner makes no covenant, representation, or warranty as to the physical or environmental condition of the property. Successful purchasers acquire the property, both surface rights and mineral rights, if not previously separated, in the condition (including environmental condition) existing at the time of sale "as is" with all defects, if any.
It is the responsibility of all prospective purchasers to do their own research as to the use of the land for their intended purpose and to exercise due diligence in researching the property. While the Commissioner attempts to convey correct and accurate information, it is the duty of the prospective purchaser to verify all information and consult with legal or real estate experts before bidding. Any photos, maps, or other information provided through the Commissioner's office or website may not accurately show the property in question, and the Commissioner makes no guarantees that such information is correct or accurate and disclaims any warranties, either express or implied, or representation with respect to any parcels of land offered for sale. Further, the Commissioner does not guarantee the usability of, access to, or suitability for a particular purpose of any of these lands, including availability of services to the property. This includes information found on the Commissioner's website, information obtained through a link from the Commissioner's website, and comments or statements made by employees of the Commissioner. The information provided in the website and by the Commissioner's office is for general guidance only and is not intended to constitute legal advice.
Certain information must be included in pre-sale notices published in newspapers and pre-sale notices sent by mail. Failure to include certain information required by statute may invalidate a sale of the land. Only an Owner or Interested Party may challenge the validity of a notice to substantially comply with the notice statutes. The required contents of notices follow.
In the instance of a tax-delinquent parcel that has been claimed as a Homestead and designated as a Homestead by the county assessor under Arkansas law, the Commissioner shall send notice through a process server at least sixty (60) days before the sale, if notice has not been received by certified mail. When a Homestead is owned by a husband and wife as tenants by the entirety, notice to one spouse suffices.
After any sale, whether at Public Auction or Post-Auction Sale, notice of the sale must be sent as follows:
The Commissioner will issue a Limited Warranty Deed conveying to the purchaser all rights, title, and interest received by the State in the tax-delinquent property through tax forfeiture. This deed is limited in nature and often requires subsequent legal action by the buyer to obtain full marketable title. The Commissioner does not warrant that the title it conveys is free of defect or other fault. The buyer is responsible for conducting all research regarding the parcel, including, but not limited to, consulting with private legal counsel and/or a licensed abstractor and performing a title search before bidding. The Commissioner or his employees cannot give legal advice to the public.
Title insurance companies may or may not issue title insurance on properties purchased at these sales, and the Commissioner makes no representation as to the availability of title insurance on these properties. The unavailability of title insurance is not grounds for cancelling a sale or other re-conveyance to the State.
Registration will take place prior to the time of sale as specified in the notice. No Bids will be accepted unless the bidder has registered and received a pre-numbered bid card. Bidders may be required to show a photo identification.
Payment of the full purchase price is due upon the acceptance of the Bid by the Commissioner. Acceptable payment methods include: personal check, Certified Funds, or, if paying in person, cash or credit or debit card. Payments made with insufficient funds will cancel the sale, and forfeit the payment of one hundred dollars ($100) in cash or Certified Funds of each parcel purchased. Additionally, the purchaser may no longer be allowed to purchase properties from the Commissioner.
If property has not been redeemed by the tenth (10th) business day after full payment of the Bid amount was received, the Commissioner shall issue a Limited Warranty Deed in the name of the successful bidder.
Any formal announcements made by the auctioneer on the day of the sale take precedence over previously published or verbally conveyed terms and conditions. Answering questions or making comments does not constitute a formal or public announcement.
Listing a property in the sale catalog does not guarantee availability on the day of Public Auction. Parcels may be redeemed prior to the auction date or otherwise removed from the auction list at the Commissioner's discretion. A list of parcels stricken from the sale catalog will be posted or announced at the auction.
Thirty (30) days following the initial Public Auction, all parcels not sold at the Public Auction shall be placed on the Post-Auction Sales list maintained by the Commissioner. This list shall be placed on the Commissioner of State Lands' website, http://www.cosl.org/, or will be provided via the U.S. Postal Service upon receipt of costs incurred for copying.
Listing a property on the Post-Auction Sales list does not guarantee availability on the date a Bid is received. Parcels may be sold, redeemed, or otherwise removed from the auction list at the Commissioner's discretion. The Commissioner has no liability for parcels that appear on the Post-Auction Sales list that are subsequently not available. Time is of the essence in making offers on available Post-Auction Sale properties.
Offer forms for Post-Auction Sale properties shall not be provided to the public until the parcel is added to the Post-Auction Sales list.
When a parcel is placed on the Post-Auction Sales list, offer forms may be obtained by requesting them over the telephone, via email, in person, or online. The offer form shall be good for thirty (30) days from the day it is printed, unless otherwise indicated on the offer form. In all instances, the offer form shall only be good until the date indicated on the form.
Potential purchasers should carefully research the properties they intend to purchase prior to requesting forms or submitting payment. An offer shall be considered a binding offer to purchase and shall obligate the potential purchaser to the terms and conditions listed on the offer form.
Deadlines are strictly enforced.
Any person, corporation, association, other legal entity, or agent thereof may Bid on the properties offered, except that the following may not Bid or purchase property through a tax sale, whether directly or indirectly:
Any persons or entities that have won previous auctions and submitted payment via a check with insufficient funds or otherwise failed to pay may be prohibited from bidding or may be required to pay in Certified Funds if permitted to Bid.
Except as set forth in Subtitle F of this Title, Post-Auction Sales properties are available for sale by submitting all delinquent taxes, fees, penalties, interest, and costs due, along with a completed valid offer to purchase form from the Commissioner's office. Properties are offered on a first come, first serve basis; however, additional competitive bidding may be required to complete a sale if two (2) or more qualifying offers arrive on the same day.
Bids are submitted along with payment by mail or in person to the Commissioner. Payments on offers received within the first two (2) years following the date of the Public Auction must at least be the amount of taxes, penalty, interest and costs due as shown on the offer to purchase form. Payment must match the amount bid. Payments made two (2) years or more following the date of the Public Auction must match the amount Bid. The statute and notes establishing this two (2) year period may be further amended to either lengthen or shorten the period, and these Rules shall at all times be read to reflect the version of Ark. Code Ann. § 26-37-101 and the following notes applicable at the time of sale of the property.
Once the Commissioner receives all forms and proper payment for a parcel on the Post-Auction Sales list, the parcel is removed from the Post-Auction Sales list. No additional offer forms may be accepted after that day. Postmarks are not taken into consideration when determining the date of an offer. Actual receipt of the offer forms and payment is required.
Purchasers can expect the Post-Auction Sale process to require a minimum of sixty (60) days to complete. This period can be broken down to the following three (3) distinct periods starting once an offer is received:
The Commissioner reserves the right to reject any or all offers.
The Commissioner of State Lands shall submit quarterly reports to the Legislative Council or, if the General Assembly is in session, the Joint Budget Committee, listing all tax-delinquent land sold at a post-auction private sale.
If two (2) or more qualifying offer to purchase forms are submitted with payment for an active parcel on the same day, the Commissioner will hold all offers and payments. The Commissioner will notify all qualifying purchasers by regular mail that additional bidding will be required, and the property will be awarded to the highest bidder. An additional offer form will be provided by mail, and purchasers must respond within ten (10) business days of the notification of the requirement for additional bidding. The offer must include the revised offer to purchase form and matching additional funds. Postmarks will not be accepted. Payments and forms must be in our office, as deadlines are strictly enforced. The sale date will be set thirty (30) days from the acceptance of the highest offer, and the ten (10) business day period for Redemption shall follow.
When an offer is accepted, the Commissioner shall send notice to the Owner and Interested Parties by certified mail and regular mail in the manner prescribed in Subtitle C above.
No offer for an amount less than all taxes, fees, penalties, interest, and costs shall be considered during the initial two (2) year offering date. In sales that occur when more than two (2) years have elapsed from the date the property was originally offered at Public Auction, the Commissioner may consider offers for less than the amount of taxes, fees, penalties, interest, and costs. The Commissioner may accept offers that more accurately reflect the actual value of the property. To make certain that the amount received for the property is in line with the potential value of the property, the Commissioner may do additional research. The sale can be at any price the Commissioner determines to be in the best interest of the State and its local taxing units.
If an offer is deemed "unreasonable," the Commissioner may immediately reject the offer and leave the property available to all bidders. If considered but not accepted, the Commissioner may counter-offer by mail with an acceptable Bid. In this case, the parcel will be set as "Pending Sale" and removed from the list. If the purchaser agrees to the counter-offer, the purchaser must submit payment to the Commissioner within the ten (10) business days of the Commissioner's counteroffer. Submissions received after this date will not be accepted, and the parcel will once again be made available on our Post-Auction Sales list. The same time periods for notice and Redemption as set forth in subtitle C of this title apply.
Payment must accompany a valid offer to purchase form and match the total amount Bid. Acceptable payment methods include: personal check, Certified Funds, or, if paying in person, cash or credit or debit card. Payments made with insufficient funds will cancel the sale, and the purchaser may no longer be allowed to purchase properties from the Commissioner.
If property has not been redeemed by the tenth (10th) business day, the Commissioner shall issue a Limited Warranty Deed in the name of the successful bidder.
Any money collected through the sale of tax-delinquent property that is above the amount of the taxes, fees, penalties, interest, and costs due at the time of sale shall be deemed Excess Proceeds. Such Excess Proceeds shall be distributed upon application according to statute, and any remainder shall be held in trust by the Commissioner for the former Owner.
135.00.19 Ark. Code R. 001