135.00.21 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 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.
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having been promulgated and adopted by the Commissioner, shall be in full force and effect until they are amended or repealed pursuant to law. All previous Rules adopted and published by the Commissioner are hereby superseded and repealed insofar as they may be different from or in conflict with the Rules herein.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, 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.
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.
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) 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.
After any sale, whether at a Tax Delinquent Property Auction or an Unsold-Property Auction, 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 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.
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. A valid drivers' license number, expiration date, and issuing state must be provided as part of the registration process. 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 the Earnest Money 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 the Tax Delinquent Property 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) calendar days following the initial Tax Delinquent Property Auction, all parcels not sold at the Tax Delinquent Property Auction shall be placed on the Unsold-Property Auctions list maintained by the Commissioner. This list shall be placed on the Commissioner of State Lands' website, http://www.cosl.org/.
Listing a property on the Unsold-Property Auctions 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 Unsold-Property Auctions list that are subsequently not available. Potential purchasers should carefully research the parcels they intend to purchase prior to submitting Bids. The Commissioner reserves the right to reject any or all offers.
The Unsold-Property Auctions will be conducted online, and Bids will only be accepted online.
Prior to placing any online Bid, prospective bidders must complete an initial online registration. This registration will provide each bidder with a unique identifier that will be used in the event the bidder wishes to make multiple purchases either at the time of registration or at a future online auction. The registration shall include the following:
No Bids will be accepted unless the bidder has provided accurate payment information, and failure to pay based on the inability to process payment based on the information provided may result in refusal to accept future Bids.
On the Unsold-Property Auction Commencement Date, the Commissioner shall send notice to the Owner and Interested Parties by certified mail and regular mail in the manner prescribed in Title 1 above.
Purchasers can expect the Unsold-Property Auction process to follow two distinct periods:
For Unsold-Property Auctions held within the first two (2) years following the date of the Tax Delinquent Property Auction, the Reserve Bid Amount will be set at an amount equal to the taxes, penalty, interest, and costs of the sale.
For Negotiated-Price Auctions, the Reserve Bid Amount will be set at an amount the Commissioner determines to be in the best interests of the state and the local-taxing units
Payment by Certified Funds is due and payable upon notice that a Bid is successful and must match the total amount Bid less Earnest Money paid. Payments made after the ten (10) business day payment period or made with insufficient funds will cancel the sale, and the bidder shall forfeit the payment of the Earnest Money 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, the Commissioner shall issue a Limited Warranty Deed in the name of the successful bidder.
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 Unsold-Property Auctions, including a Negotiated-Price Auction.
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.
135.00.21 Ark. Code R. 001