Arkansas Administrative Code › Agency 135 - STATE LAND COMMISSIONER › Rule 135.00.23-001 - Commissioner of State Lands Rules 2023 Ed.

Current through Register Vol. 49, No. 6, June, 2024
Title
		  1: General Information
SUBTITLE A
| AUTHORITY AND PURPOSE
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 parcels to the
			 Commissioner of State Lands (the "Commissioner"). Upon certification, legal
			 title to the parcels 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 parcels are 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
			 parcels or, if the delinquent taxes are not paid in full before the date set
			 for sale, selling the parcels. The Commissioner offers the parcels for sale at
			 a public auction. If the parcel does not sell, then the Commissioner offers the
			 parcel for sale at the ongoing Unsold-Property Auctions beginning thirty (30)
			 calendar 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.
SUBTITLE B
| SCOPE
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			 repealed pursuant to law.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			 Commissioner are hereby superseded and repealed insofar as they may be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
			 parcels that have been or will be certified to the Commissioner for tax years
			 prior to 1978.
SUBTITLE C
| SEVERABILITY
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.
SUBTITLE D
|
		  DEFINITIONS
The following definitions are applicable to all Rules:
Bid
- An offer to purchase a parcel made by a
			 prospective buyer, whether in person or online.
Business Day
- A Monday, Tuesday, Wednesday,
			 Thursday, or Friday that is not otherwise observed as an official state
			 holiday.
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.
CT
- All references to times are under the North
			 American Central Time Zone.
Earnest Money
- The first One Hundred Dollar
			 ($100.00) payment tendered as part of an Online Auction Sale.
Excess Proceeds
- Money received from a Bid or sale
			 that is in excess of the taxes, fees, penalties, interest, and costs due on the
			 parcel 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 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, or
			 partnership holding title to or an interest in the tax-delinquent parcel by
			 virtue of a recorded instrument at the time of Certification.
Limited Warranty Deed
- A unique deed generated by
			 the Commissioner that conveys a limited interest in a parcel in exchange for
			 the purchaser paying the accepted Bid amount for the parcel. In most instances
			 a Limited Warranty Deed is used by a purchaser to quiet title to the parcel and
			 receive full marketable title in fee simple from a court.
Litigation Period
- The maximum time after the sale
			 of a tax-delinquent parcel that legal proceedings based on that sale may be
			 initiated by statute.
Negotiated-Price Auction
- A type of an
			 Unsold-Property Auction that occurs two (2) years or more following the Tax
			 Delinquent Property Auction, where the Commissioner has the discretion to set a
			 Reserve Bid Amount for less than the amount of taxes, penalties, interest, fees
			 and costs of the sale. Negotiated-Price Auctions are held solely online.
Notice of Sale
- Notification sent to the Owner or
			 other Interested Parties as identified by the Commissioner, as having a
			 potential interest in a tax-delinquent parcel 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 parcel, unless they take immediate action to pay the
			 taxes, penalties, interest, fees, and costs due. Notice is also provided by
			 publication in a newspaper having general circulation in the county where the
			 parcel is located.
Owner
- Any person, firm, corporation, or partnership
			 holding title to or an interest in the tax-delinquent parcel by virtue of a
			 recorded instrument at the time of Certification.
Purchaser Summary
-A receipt provided at the
			 conclusion of a Tax Delinquent Auction which verifies that a person or entity
			 is the successful bidder and has tendered payment in an acceptable form. A
			 Purchaser Summary does not convey title or guarantee a Limited Warranty Deed
			 will be issued.
Redeemer
- Either the Owner of the parcel or any
			 other person, firm, corporation, or partnership without an existing ownership
			 interest in the parcel who redeems the parcel by paying all taxes, penalties,
			 interest, fees and costs due.
Redemption/Redeem
- An action of payment to the
			 Commissioner of all delinquent taxes, penalties, interest, fees and costs due
			 to extinguish the state's interest in the parcel. Upon Redemption, a Redemption
			 Deed will be issued.
Redemption Deed
- A deed issued by the Commissioner
			 which serves as proof that payment has been received and the state's interest
			 is extinguished by the redemption. Issuance of a redemption deed does not
			 convey any title in or establish ownership to the parcel being redeemed. A
			 Redemption Receipt will be issued to the Redeemer in the event the redeemer is
			 not the certified record owner.
Redemption Receipt
- A receipt issued to a Redeemer
			 certifying payment in the event the Redeemer is not the certified record
			 owner.
Reserve Bid Amount
- An amount set by the
			 Commissioner that represents the minimum Bid amount.
Tax Delinquent Property Auction
- An auction for the
			 sale of tax-delinquent parcels where bidders are physically assembled and Bids
			 accepted.
Taxes
- As used herein, the use of the term "taxes"
			 shall include any and all taxes, penalties, interest, fees, and costs due and
			 owing on the parcel. Any amounts owing continue to accrue additional taxes,
			 penalties, interest, fees, and costs until such time as the parcel is either
			 sold or Redeemed.
Unsold-Property Auction
- A sale consisting of Bids
			 placed online on a tax-delinquent parcel that was previously offered at a Tax
			 Delinquent Property Auction but not sold. An Unsold-Property Auction is
			 initiated solely by an online offer being made on the unsold parcel and is sold
			 to the highest bidder.
Unsold-Property Auction Closing Date
- The thirtieth
			 (30th) calendar day from the date of the receipt of
			 the first online Bid for a parcel located on the Unsold-Property Auction list.
			 The date that the first Bid is received is included in the thirty (30) calendar
			 days.
Unsold-Property Auction Commencement Date
- The date
			 of the receipt of the first online Bid for a parcel located on the
			 Unsold-Property Auction list.
SUBTITLE
		  E
| PARCEL OFFERED FOR SALE
All parcels offered for sale by the Commissioner have been
			 certified to the State by the county in which the parcels are 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 parcel
			 is certified to the Commissioner.
The parcel 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. The parcel is not identified by physical
			 address.
A list of tax delinquent parcels being offered for sale will be
			 available at the Tax Delinquent Property Auction or through the Commissioner's
			 website,
https://www.cosl.org/
. A
			 list of Unsold-Property Auction parcels available for sale will be available
			 through the Commissioner's website. Lists of both Tax Delinquent Property
			 Auction and Unsold-Property Auction parcels are subject to change at any
			 time.
Offered parcels may be subject to liens or encumbrances,
			 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 and 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 parcel. Successful
			 purchasers acquire the parcel, both surface rights and mineral rights, if not
			 previously separated, in the 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 parcel for their
			 intended purpose and to exercise due diligence in researching the
			 parcel.
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 parcel 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 parcel offered for sale. Further, the Commissioner does not guarantee the
			 usability of, access to, or suitability for a particular purpose of any parcel.
			 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.
SUBTITLE F
| PRE-SALE NOTICE
Certain information must be included in pre-sale notices
			 published in newspapers and pre-sale notices sent by certified mail and regular
			 mail. Failure to include certain information required by statute may invalidate
			 a sale of the parcel. Only an Owner or Interested Party may challenge the
			 compliance of the notice statutes. The required contents of notices
			 follow.
1. Notice of Sale by
		  Publication
(a) A notice of sale will be
		  published by the Commissioner in a newspaper having general circulation in the
		  county where the parcel is located.
(b) The published notice shall contain the
		  following:
(1) The amount of taxes, penalties,
		  interest, fees, and other costs due on the parcel;
(2) The name of the Owner;
(3) A list of all Interested Parties as
		  identified by the Commissioner;
(4)
		  The legal description and parcel number identifying the parcel: a partial or
		  abbreviated legal description shall be sufficient in the notice if the name of
		  the Owner and parcel number are listed;
(5) Indicate that the parcel will be sold to
		  the highest bidder provided the Bid is equal to the taxes, penalties, interest,
		  fees, and costs owed on the parcel.
(c) Being listed in a public notice does not
		  convey status to an individual or entity determining that it is an Owner or
		  Interested Party.
(d) Failure of
		  the notice to contain the information required in subsection (b) of this
		  section does not invalidate an auction sale of the parcel unless an Owner or
		  Interested Party did not receive notice in substantial compliance with §
										26-37-301.
(e) Other information may be included in the
		  notice of sale if it is in the best interest of the State to do so.
2. Notice of Sale by Mail
(a) A notice of sale will be sent by
		  certified mail to the following:
(1) The
		  Owner at the Owner's last known address as certified by the county.
(2) All Interested Parties and any person who
		  may be otherwise known to the Commissioner as having a potential
		  interest.
(3) Sending or receipt of
		  notice of sale does not convey status to an individual or entity determining
		  that it is an Owner or Interested Party.
(b) The Commissioner shall not be required to
		  send notice by certified mail or any other means to a person, firm,
		  corporation, partnership, or other legal entity whose title to or interest in
		  the tax-delinquent parcel is:
(1) Obtained
		  after Certification to the Commissioner; or
(2) Expired, barred, released, or otherwise
		  terminated before the date of sale.
(c) If notice by certified mail is returned
		  unclaimed or refused, notice will be sent by regular mail.
(d) If notice is returned undelivered for any
		  other reason, notice will be sent to the Owner or Interested Party at any
		  additional address reasonably identifiable through the examination of the
		  real-property records properly filed and recorded in the office of the county
		  recorder where the parcel is located as follows:
(1) The address shown on the deed to the
		  Owner;
(2) The address shown on the
		  deed, mortgage, assignment, or other filed and recorded document to the
		  Interested Party; or
(3) Any other
		  corrected or forwarding address on file with the county collector or county
		  assessor.
(e) The notice
		  by mail will also contain the following:
(1) A
		  partial or abbreviated legal description and the parcel number;
(2) A statement that the parcel will be sold
		  if not redeemed prior to 4:00 p.m. CT on the last business day prior to the
		  date of sale; and
(3) The sale
		  date.
3.
		  Notice on Homesteads
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) calendar 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.
SUBTITLE G
| REDEMPTION NOTICE
All Redemptions must be received prior to 4:00 p.m. CT on the
			 last business day prior to the date of sale of a parcel, whether at a
			 Tax-Delinquent Property Auction or an Unsold-Property Auction, in the following
			 manner:
1. If a tax-delinquent parcel
		  is to be offered at an in-person Tax Delinquent Property Auction, then at least
		  thirty (30) calendar days prior to the date of the sale, the Commissioner shall
		  notify the Owner and any Interested Parties by regular mail of the right to
		  redeem the parcel prior to 4:00 p.m. CT on the last business day prior to the
		  date of the sale by paying the amount of taxes, penalties, interest, fees and
		  costs due on the parcel.
2. If a
		  tax-delinquent parcel is to be offered for sale online through an
		  Unsold-Property Auction when the first Bid is received, the Commissioner shall
		  notify the Owner and any Interested Parties by certified mail of the date of
		  the sale and the right to redeem the parcel before 4:00 p.m. CT on the last
		  business day prior to the date of the sale by paying the amount of taxes,
		  penalties, interest, fees and costs due on the parcel.
3. The notice required under this subtitle
		  must be sent to the last-known address of the Owner as certified by the county,
		  and any Interested Parties.
4. If a
		  parcel subject to paragraph 1 of this subtitle is not Redeemed by the deadline
		  stated in paragraph 1, the parcel shall be offered for sale at an in-person
		  Tax-Delinquent Property Auction, and if sold, a Limited Warranty Deed shall be
		  issued by the Commissioner to the purchaser.
5. If a parcel subject to paragraph 2 of this
		  subtitle is not Redeemed by the deadline stated in paragraph 2, upon sale of
		  the parcel, the Commissioner shall issue a Limited Warranty Deed to the
		  purchaser.
6. Payment to Redeem a
		  tax-delinquent parcel within thirty (30) days prior to the sale date shall be
		  made by certified funds, including without limitation, cash, credit card, debit
		  card, electronic check, escrow check, money order, cashier's check, or
		  certified bank check.
SUBTITLE
		  H
| TITLE BEING CONVEYED
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 parcel 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.
Title insurance companies may or may not issue title insurance on
			 parcels purchased at these auctions, and the Commissioner makes no
			 representation as to the availability of title insurance on these parcels. The
			 unavailability of title insurance is not grounds for cancelling a sale or other
			 re- conveyance to the State.
SUBTITLE I
| REDEMPTION OF TAX-DELINQUENT PARCELS
1. Until a tax-delinquent parcel is sold or
		  disposed of by the State, a person who wishes to redeem the parcel shall submit
		  the following to the Commissioner:
(a) A
		  petition to redeem the parcel that may be obtained by request through the
		  Commissioner's website,
https://www/cosl.org/
, or by contacting the
		  Commissioner's office;
(b) A sum of
		  money equal to the amount of outstanding taxes, penalties, interest, fees, and
		  costs due and owing at the time the petition is received by the Commissioner's
		  office; and
(c) Such other
		  documentation that the Commissioner may require.
2. The petition to redeem shall include a
		  signature verified by the petitioner.
3. The parcel may be redeemed online through
		  the Commissioner's website,
https://www.cosl.org
, by completing an
		  online petition and paying with a credit or debit card. If the parcel is
		  redeemed online, the petitioner is not required to submit a paper copy of the
		  Petition to Redeem.
4. The total
		  amount due on a petition to redeem is valid for thirty (30) calendar days from
		  the date requested, unless the parcel has been sold, the records have been
		  amended by a county, or additional costs, fees or taxes accrued. The amount is
		  subject to increase within this thirty (30) calendar day period if actual
		  costs, fees, and taxes are added. If the petition date has expired or
		  additional costs have accrued, an updated petition to redeem must be
		  requested.
5. Effective July 1,
		  2023, petitions and payments must be received in the Commissioner's office
		  prior to the petition's expiration date or prior to 4:00 p.m. CT on the last
		  business day prior to the date of sale, whichever is earlier. Postmarks will
		  not be accepted. Deadlines are strictly enforced.
6. Partial payments, incomplete petitions or
		  incorrect petitions will not be accepted and will not extend the Redemption
		  period.
7. Payment to Redeem a
		  tax-delinquent parcel under this subtitle shall be made in cash, Certified
		  Funds, or as provided in §
									26-37-302, if the Redemption
		  occurs within thirty (30) calendar days before 4:00 p.m. CT on the last
		  business day prior to the date of sale of either the Tax-Delinquent Auction or
		  an Unsold-Property Auction.
8.
		  Effective July 31, 2023, upon Redemption
(a)
		  If the Redeemer is the owner, a Redemption Deed and Redemption Receipt will be
		  issued in the name of the owner by the Commissioner and filed with the
		  county.
(b) If the Redeemer is not
		  the owner, a Redemption Deed will be issued in the name of the owner and a
		  Redemption Receipt will be issued to the Redeemer.
SUBTITLE J
|
		  PENALTIES
1. Pursuant to the
		  provisions of Ark. Code Ann. §§
									5-37-301 through 307, "The Arkansas
		  Hot Check Law," the maker of checks returned to the Commissioner for
		  insufficient funds may be prosecuted.
2. The Commissioner reserves the right to
		  exclude any individual, partnership, corporation, or other legal entity from
		  the bidding process for failure to abide by these Rules or for failure to carry
		  on business in good faith.
(a) Pursuant to
		  the provisions of Ark. Code Ann. §§
										26-37-317, effective July 31,
		  2023, the Commissioner shall impose a penalty equal to the greater of ten
		  percent (10%) of the face value of the payment instrument or twenty dollars
		  ($20.00) for any sale canceled, set aside, or held for naught for any of the
		  following reasons.
1. The payment instrument
		  is refused by the drawee because of insufficient funds; or
2. The maker or drawer of the payment
		  instrument stops payment; or
3. The
		  payment instrument tendered to the Commissioner is dishonored for any
		  reason.
3.
		  When a dishonored instrument is received:
(a)
		  The Commissioner will notify the issuer that the instrument has been
		  dishonored; and
(b) Provide the
		  issuer with a date by which the instrument must be made good.
(c) If the issuer fails to make good by the
		  specified date, the instrument plus the added penalty will be turned over for
		  collection.
4. Upon
		  failure or dishonor of a payment instrument, the Commissioner may issue a
		  cancellation deed setting aside the redemption deed or limited warranty
		  deed.
SUBTITLE K
|
		  LEGAL ACTION AGAINST THE CONVEYANCE
1.
		  The time period during which legal action must be commenced is as follows:
(a) Actions to contest the validity of the
		  deeds issued subsequent to August 16, 2013, the effective date of Act 1231 of
		  2013, must be filed within ninety (90) calendar days after the date of
		  conveyance. The statute may be further amended to either lengthen or shorten
		  the litigation period, and these Rules shall at all times be read to reflect
		  the version of Ark. Code Ann. §
										26-37-203 applicable at the time
		  of sale of the parcel being litigated.
(b) Act 1231 of 2013 amended Arkansas Code
		  §
										26-37-203 to a ninety (90) day
		  litigation period. The litigation period of any parcel purchased from the
		  Commissioner should be determined by consultation with private legal
		  counsel.
(c) Any purchaser taking
		  action or expending money with respect to the parcel, prior to the expiration
		  of the ninety (90) day litigation period, does so at their own risk. Any funds
		  spent during this period may not be recoverable in the event of a successful
		  challenge.
2. If the
		  sale is set aside by legal action or if the parcel is proven to be non-existent
		  or double assessed, or canceled by the Commissioner, the purchaser shall be
		  entitled to a reimbursement of money paid to the Commissioner, interest not
		  accruing thereon.
SUBTITLE
		  L
| FEES
(1) The
		  Commissioner shall collect the following fees:
(a) Emerged Land Deeds issued pursuant to §§
														22-5-404,
						22-5-405........................
$ 5.00
(b) Deeds to 16th section school lands under §
														22-5-407...............................................
5.00
(c) Quitclaim deed of mineral interest under §
														22-6-502..............................................
5.00
(d) Issuance of duplicate deeds and patents under §
														22-6-104....................................
5.00
(e) Issuance of original patents under §
														22-6-105
						............................................................
5.00
(f) Redemption deeds issued under §
														26-37-310
						..............................................................
5.00
(g) Issuance of sale deeds
						.........................................................................................................
5.00
(h) Double entry statements
						..................................................................................................
3.00
(i) Disclaimers
						...........................................................................................................................
3.00
(j) For each page of field notes issued by the office of
						the Commissioner ..............
0.50
(k) A fee of five dollars ($5.00) plus actual cost for
						each General Land Office plat copied and distributed.
(2) The
		  Commissioner shall charge a collection fee of twenty-five dollars ($25.00)
		  against all tax delinquent parcels redeemed or sold by the Commissioner, except
		  the fees charged for the redemption of severed mineral interests shall not
		  include the twenty-five-dollar collection fee.
(3) For each certificate of donation to
		  forfeited lands issued by the Commissioner, there shall be paid a fee of ten
		  dollars ($10.00).
(4) For each
		  donation deed issued by the Commissioner, there shall be paid a fee of one
		  dollar ($1.00).
(5) The fee for
		  each required publication of delinquent real property tax lists shall be one
		  dollar and fifty cents ($1.50) per tract per
		  insertion.