Arkansas Administrative Code › Agency 135 - STATE LAND COMMISSIONER › Division 01 - Executive › Rule 135.01.23-001 - Commissioner of State Lands Rules 2023 Ed.

Current through Register Vol. 49, No. 6, June, 2024
Tommy Land, Commissioner
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				repealed pursuant to law.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				Commissioner are hereby superseded and repealed insofar as they may be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.