Research

The Commissioner of State Lands strongly urges prospective purchasers to research all properties at the county level before purchasing. Determine the location and size of the parcel and check for liens, mortgages, and other taxes or assessments that may be due but not collected by this office. The State of Arkansas cannot and does not guarantee title, access, or existence to any property sold through public auction or negotiated sales. Further, all purchasers are urged to conduct independent reviews of property records.

Negotiated Sales

Ninety (90) days after a public auction, parcels offered, but not sold, are available for sale through the Commissioner of State Lands office. You may request a list of properties available for a specific county by writing to the Commissioner of State Lands or by calling the Real Estate Division at 501-324-9422. The cost is fifty cents ($.50) per page. You will be invoiced for the list when it is mailed to you. The lists are now available on our website at www.state.ar.us/land/land.html. Please click on the “Publications” menu for easy access. The lists are updated daily.

Excess Proceeds

All monies collected in excess of the taxes, penalties, interest and fees can be claimed by the delinquent owner two years after the sale of his property. The former owners must prove they were the owners of the parcel at the time of the sale and sign a Deed of Release relinquishing their interest and claim to the property. Former owners should contact the Commissioner of State Lands two years after the sale for the appropriate paperwork.

Payment

The first $100 for each parcel you purchase must be paid in cash, cashier’s check or money order. The remainder may be paid by personal check or any of the payment methods already listed.

2. Notice of Sale

A. A notice of sale will be published by the Commissioner of State Lands 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. A notice of sale will be mailed to all interested parties known to the Commissioner.

3. Contents of the Notice of Sale

A. The assessed value of the land.
B. The amount of taxes, interest, penalties and other costs due on the land.
C. The legal description of the land.
D. A list of all recorded liens against the land that are known to the Commissioner.
E. A deadline at which time bids must be delivered.
F. The land will be sold to the highest bidder provided the bid is equal to the assessed value of the land.

4. Registration at the Sale

A. Registration will take place prior to the time of sale as specified in the notice.
B. No bids will be accepted unless the bidder has registered and received a pre-numbered bid card.

5. Who May Bid

Any person, corporation or association or agent thereof may bid on the properties offered except that the Commissioner of State Lands and his employees, the County Collector or his deputy and the Clerk of the County or his deputy may not bid on the property or be involved in the purchase of such property.

6. Bidding

A. In General
1. The minimum bid amounts are shown on the list. The minimum bid amount is equal to the assessed value of the land as certified to the Commissioner of State Lands by the county.
2. Each sale will be made to the highest responsible bidder for not less than the minimum bid amount.
3. Successful bidders, whether bidding by mail or at the auction, will receive receipts for payments made.
B. At Auction
1. Subject to proper registration as outlined in Rule 4, bids may be made at the oral auction on the day of the sale.
2. Each parcel of land will be offered separately and in the order appearing on the bid list.
3. An oral bid accepted at public auction is a legal and binding contract to purchase.
C. By Mail
1. Bids by mail must be received by the Commissioner of State Lands no later than seven (7) days prior to the date of sale.
2. Unsuccessful bidders will be refunded in full.
3. Bids received by the Commissioner prior to the sale date will be announced immediately preceding the oral auction of the parcel.

7. Terms of Sale

A. The full purchase price is equal to the highest amount bid plus the “TAX DUE” amount as listed in the catalog.
B. Successful bidders must tender the full purchase price (the amount bid plus the “TAX DUE” amount as listed) at the time of the sale.
C. Bids by mail must include the full purchase price (the amount bid plus the “TAX DUE” amount as listed).
D. At the auction or by mail, the first one hundred dollars ($100.00) of the full purchase price must be paid in cash, by money order or cashier’s check with the balance payable by personal check. No deed will be issued until clearance is assured by the bank or lending institution on which such checks are drawn. (DO NOT SEND CASH BY MAIL).
E. All cashier’s checks, money orders, and checks should be made payable to the Commissioner of State Lands.
F. No purchase may be made on a time-payment plan.
G. Upon payment of the full purchase price, the successful bidder will receive a certificate of purchase from the Commissioner of State Lands.
H. Record owners, their agents, or assigns have thirty (30) days from the date of the sale to redeem the property.
I. In the event of redemption, the purchaser at the sale will receive a full refund, no interest accruing.
J. If no redemption occurs, the purchaser will receive a limited warranty deed from the Commissioner of State Lands subsequent to the expiration of the 30-day redemption period.

8. Penalties

A. The cash amount tendered on the day of the sale will be forfeited by the successful bidder in the event the check used to pay the balance is a non-negotiable instrument.
B. Pursuant to the provisions of A.C.A. Section 5-37-301 through 307, “The Arkansas Hot Check Law”, the maker of checks returned to the Commissioner of State Lands for insufficient funds will be prosecuted.
C. The Commissioner of State Lands reserves the right to exclude any individual partnership or corporation from the bidding process for failure to abide by these rules or for failure to carry on business in good faith.

9. Title Being Conveyed

Deeds are limited warranty deeds conveying all title received by the state through tax forfeiture.

10. Legal Action Against the Conveyance

A. Most actions to contest the validity of the deeds must be filed within two (2*) years after the date of conveyance [Exceptions to this rule are listed under A.C.A. Section 26-37-203(b)(1) & (2)].
B. If the sale is set aside by legal action or if the land is proven to be non-existent, or double assessed, the purchaser will be entitled to a reimbursement of money paid to the Commissioner of State Lands, interest not accruing thereon.

* Act 1036 of 2007 shortened the contest period to one(1) year.

11. Negotiated Sales
A. In the event no one bids at least the minimum bid, the Commissioner of State Lands may negotiate a sale.
B. Such sales that are negotiated shall take place at a time which will be specified at the auction and which will be held at the offices of the Commissioner of State Lands. Prior to execution, such sales must have the approval of the Attorney General of the State of Arkansas.

12. Caveat

Nothing in these rules and regulations shall apply to the sale of tax delinquent land which has been or will be certified to the Commissioner of State Lands for tax years prior to 1978.

What are Tax Liens?

The collection of property taxes is a huge priority in every county in the United States.  Literally, if the county cannot collect property taxes, they cannot pay for vital services.  

To make sure this does not happen, the county places a lien on any property with delinquent property taxes and sells the tax debt to investors.  This creates a win-win situation for everyone: the county gets their money, delinquent property tax owners get a little extra time to pay their overdue property taxes, and investors get a low risk, high return investment.  

How high is the rate of return on tax lien certificates?

• Illinois tax lien certificates pay an annual return of 36 percent per year and if the lien gets redeemed early your annual return can be a staggering 216% per year.

• Indiana tax lien certificates pay an annual return of 15 percent per year and if the lien gets redeemed early your annual return can be a amazing 120% per year.

• Florida tax lien certificates pay up to an annual return of 18 percent per year and if the lien gets redeemed early your annual return can be a impressive 61% per year.

• Iowa tax lien certificates pay an annual return of 24% per year.

A few states like Georgia and Texas offer tax deeds with a right of redemption fee – that is, a flat fee of up to 25% regardless of whether the property owner redeems in one month or 6 months. This process is very similar to a tax lien certificate.

• Georgia offers a redemption fee to investors of 20%, if redeemed within one year. If the property owner redeems in one month, your effective annual interest rate is a stunning 240%.

• Texas offers a redemption fee to investors of 25% for most properties, when redeemed within 6 months. If the property owner redeems in one month, your effective annual interest rate is an incredible 300%.

• Delaware offers a redemption fee to investors of 15%. If the property owner redeems in one month, your effective annual interest rate is a spectacular 180%.

But what about investment safety, are tax lien certificates a safe investment?

Investing in tax lien certificates is ultra-safe!

Why?

1. State governments control the entire tax lien process so it is very safe and fair.  The last thing the state wants is unsatisfied tax lien investors. Without the investors, counties would not be able to collect the money they need to keep the county government operating.

2. If delinquent property tax owners fail to pay their back taxes plus interest, they lose their entire property to the investor for the property taxes owed.

3. Tax liens take priority over almost any other lien, including the mortgage, so you are paid FIRST. 

I am sure you can see why tax lien certificates are an incredible investment with a great built-in safety factor!

If the delinquent property owners pay their tax bill, you, the investor, make an extremely high rate of return on your money.   

If the property owners do not pay their tax bill, you, the investor, get to keep the entire property for the taxes and penalties owed, often pennies on the dollar.

And the best part is that tax lien investing does not depend on the economy, so there is zero investment volatility when you invest in tax liens. In fact, there is more opportunity to make money in tax liens in this recession, than there is in a good economy!

Overall, you cannot find a higher return/lower risk investment than tax lien certificates.