Arkansas Administrative Code › Agency 135 - STATE LAND COMMISSIONER › Rule 135.00.21-001 - Commissioner of State Lands Rules 2021 Edition

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 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 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			 repealed pursuant to law.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			 Commissioner are hereby superseded and repealed insofar as they may be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
			 land that has 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 property made by a
			 prospective buyer, whether in person, via mail, or online.
Certificate of Purchase
-A receipt that verifies that
			 a person or entity is the successful bidder and has tendered of payment in an
			 acceptable form. A Certificate of Purchase does not convey title or guarantee a
			 Limited Warranty Deed will be issued.
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.
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 a Bid, which is paid to confirm the
			 contract to purchase. For the Tax Delinquent Property Auctions, the Earnest
			 Money shall be paid by cash or Certified Funds. For all Unsold-Property
			 Auctions and Negotiated-Price Auctions, the Earnest Money shall be paid by
			 Certified Funds. Earnest Money shall be paid for each successful Bid in the
			 time period provided herein.
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.
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, and
			 costs of the sale.
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. Further, redemption of a parcel by a person not included within
			 the definition of an "owner" does not convey ownership or title to the person
			 so redeeming.
Redeemer
- Either the Owner of the property who
			 redeems the property by paying all taxes, penalties, interest, and costs or any
			 other person, firm, corporation, or partnership without an existing ownership
			 interest in the property who redeems the property by paying all taxes,
			 penalties, interest, and costs.
Redemption/Redeem
- After any sale, whether by a Tax
			 Delinquent Property Auction or an Unsold-Property Auction, 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 by 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. If a
			 Redeemer is not the Owner at the time of Redemption, the redemption deed may
			 only be issued in the name of the Owner, absent a filed and recorded deed
			 showing a change in ownership. The deed shows that the state's interest is
			 extinguished by the Redemption.
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 property where bidders are physically assembled and Bids
			 accepted. Tax Delinquent Property Auctions may include Bids made through the
			 mail, as well as Bids made by those present. Tax Delinquent Property Auctions
			 are usually held in the county in which the land is located.
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.
Unsold-Property Auction
- A sale consisting of Bids
			 placed online on a tax-delinquent property that was previously offered at a Tax
			 Delinquent Property Auction but not sold. Unlike a Tax Delinquent Property
			 Auction, an Unsold-Property Auction is initiated solely by an online offer
			 being made on the unsold property and is sold to the highest bidder. Unsold
			 Property Auctions are held solely online and not in person or in the county in
			 which the land is located.
Unsold-Property Auction Closing Date
- The date that
			 is the thirtieth (30th) calendar day from the date
			 of the receipt of the first online Bid for a property located on the
			 Unsold-Property Auctions 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 property located on the
			 Unsold-Property Auctions list.
SUBTITLE
		  E LAND OFFERED FOR SALE
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. The property is not identified by physical
			 address.
A list of tax delinquent real properties being offered for sale
			 will be available at the Tax Delinquent Property Auction or through the
			 Commissioner's website,
http://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.
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.
SUBTITLE F PRE-SALE NOTICE
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.
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 land is located.
(b) In most cases, the sale will take place
		  in the county where the land is located.
(c) The published notice shall contain the
		  following;
(1) The assessed value of the
		  land;
(2) The amount of taxes,
		  penalties, interest, fees, and the costs of the sale;
(3) The name of the Owner;
(4) A list of all Interested Parties as
		  identified by the Commissioner;
(5)
		  The legal description and parcel number identifying the land: a partial or
		  abbreviated legal description shall be sufficient in the notice if the name of
		  the Owner and parcel number are listed;
(6) A deadline at which time Bids must be
		  delivered and payment in full must be received from the purchasers;
		  and
(7) The land will be sold to
		  the highest bidder provided the Bid is equal to the taxes, penalties, interest,
		  fees, and costs owed on the land.
(d) Being listed in a public notice does not
		  convey status to an individual or entity determining that it is an Owner or
		  Interested Party.
(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. Mere
		  notice of sale does not convey legal status to the recipient that it is an
		  "interested party" as defined under the statutes or these Rules.
(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 land is:
(1) Obtained after Certification to the
		  Commissioner; or
(2) Expired,
		  barred, released, or otherwise terminated before the date of sale regardless of
		  whether a bona fide recorded instrument reflects the termination of the title
		  or interest.
(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 land 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 land will be sold if
		  not redeemed 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 POST-SALE NOTICE
After any sale, whether at a Tax Delinquent Property Auction or
			 an Unsold-Property Auction, notice of the sale must be sent as follows:
1. The Commissioner must notify the Owner and
		  Interested Parties of the right to redeem the property within ten (10) business
		  days after the date of sale by paying the amount of taxes, penalties, interest,
		  fees, and other costs due on the property, including the cost of
		  notice.
2. This notice must be sent
		  by regular mail to the last-known address of the Owner and any Interested
		  Parties.
3. If the property is not
		  redeemed within this Redemption period, a Limited Warranty Deed will be issued.
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 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
			 parcels purchased at these sales, 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 reconveyance
			 to the State.
SUBTITLE I
		  REDEMPTION OF TAX-DELINQUENT PROPERTY
1. Until
		  tax-delinquent property is sold or disposed of by the State, a person who
		  wishes to redeem the property shall submit the following to the Commissioner:
(a) A petition to redeem the property that
		  may be obtained by request through the Commissioner's website,
		  http://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 total amount due on a petition to
		  redeem is valid for thirty (30) calendar days from the date requested, unless
		  the property 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.
4. Petitions and payments must be received in
		  the Commissioner's office prior to the petition's expiration date or prior to
		  the expiration of the Redemption period, whichever is earlier. Postmarks will
		  not be accepted. To avoid the sale of the property, a properly completed, up to
		  date, petition to redeem with all required documentation must be timely
		  submitted, along with full payment of the past due amount. Deadlines are
		  strictly enforced.
5. Partial
		  payments will not be accepted. Meeting part of any of the Redemption
		  requirements will not result in redeeming the property. Incomplete or incorrect
		  petitions to redeem will be returned and will not extend the Redemption
		  period.
6. Payment tendered at
		  least thirty (30) calendar days before or no later than ten (10) business days
		  following the sale date, must be made in cash, Certified Funds, or as provided
		  in §
									26-37-302.
7. If tax-delinquent property is sold at Tax
		  Delinquent Property Auction or Unsold-Property Auction, anyone wishing to
		  redeem the property has ten (10) business days, business days do not include
		  weekends or nationally recognized holidays, the calculation of which begins the
		  day after the date of the sale, during which to redeem the property.
8. Upon Redemption, a Redemption Deed will be
		  issued by the Commissioner and filed with the county. If the parcel has sold
		  and is not redeemed, a Limited Warranty Deed to the purchaser will be issued.
		  If the parcel did not sell, it will remain on the records accruing additional
		  taxes, penalties, interest, fees, and costs and will be subject to an
		  Unsold-Property Auction.
SUBTITLE
		  J PENALTIES
1. The Earnest Money
		  tendered on the day of the sale will be forfeited by the successful bidder in
		  the event the check or payment method used to pay the balance is returned for
		  insufficient funds or for any other reason deemed to be in conflict with these
		  Rules or the law.
2. 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.
3. 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.
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 property being litigated.
(b) Act 1231 of 2013 amended Arkansas Code
		  §
										26-37-203
		  to a ninety (90) day litigation period. Previous versions of this statute
		  allowed for a one (1) or two (2) year litigation period. The litigation period
		  of any parcel purchased from the Commissioner of State Lands should be
		  determined by consultation with private legal counsel.
(c) Any purchaser taking action or expending
		  money with respect to the property, 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 land is proven to be non-existent or double assessed,
		  the purchaser shall be entitled to a reimbursement of money paid to the
		  Commissioner, interest not accruing thereon.
3. If the sale is set aside by the
		  Commissioner, the purchaser may be entitled to a reimbursement of money paid to
		  the Commissioner, interest not accruing thereon.
SUBTITLE L FEES
(1) The Commissioner of State Lands 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 of State Lands
		  ...................................................................................................................................................
		  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 of State Lands shall charge a collection fee of twenty-five
		  dollars ($25.00) against all tax delinquent land redeemed or sold by the
		  Commissioner of State Lands, 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 of State Lands, there
		  shall be paid a fee of ten dollars ($10.00).
(4) For each donation deed issued by the
		  Commissioner of State Lands, 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.