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Serving Northern St. Louis County, Minnesota

Tax-forfeited property purchasers could forfeit themselves

David Colburn
Posted 3/29/23

REGIONAL- St. Louis County Commissioners took on a role more familiar to bankers on Monday as they initiated contract cancellation procedures against 46 purchasers of tax-forfeited properties for …

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Tax-forfeited property purchasers could forfeit themselves


REGIONAL- St. Louis County Commissioners took on a role more familiar to bankers on Monday as they initiated contract cancellation procedures against 46 purchasers of tax-forfeited properties for failure to make required payments on purchase agreements and past due taxes.
While recent tax-forfeited tracts purchased at auction in the North Country have trended toward undeveloped woodland and lakeshore properties, in more highly populated areas of the county residential properties represent a significant portion of sales, and some could lose their homes if they can’t come up with the past due amounts by this summer.
Contracts subject to cancellation in the North Country include a lakefront tract on Eagles Nest Lake No. 1, two residential properties in Soudan, a residential property with a trailer house near Orr, a residential property in Angora, a small undeveloped irregular lakeshore tract at Clover Point on Lake Vermilion, a triangular undeveloped tract on Hwy. 53 south of Cook, and two tracts in Ely, one undeveloped.
According to the terms of sale, purchasers of property over $500 are eligible to participate in a multi-year purchase agreement, with the term determined by the purchase price. Buyers have a down payment of ten percent of the total sale value plus the full value of timber or certified assessments. Properties over $4,000 in value can be financed through the plan for ten years at an interest rate of ten percent, as determined by state statute, with one installment payment due annually.
Stacy Melcher, Resource Management Supervisor in the county’s Land and Minerals Department, said that those who take advantage of the county’s purchase plan tend to be higher-risk individuals who have a difficult time obtaining more traditional financing. The county’s program does not require a financial background check, she said.
Contract cancellations of tax-forfeited properties were suspended in 2020 due to the COVID pandemic and the prohibitions against evictions for nonpayment, Melcher said, but were reinstated last year.
But while state law gives commissioners authority to initiate cancellations without notice, the Land and Minerals Department has implemented its own notification process to give people the opportunity to resolve their past due accounts. An initial notice to delinquent contract holders was sent in December as a reminder that their annual payments were due by the end of the year. In January, the department followed up with a notice of delinquency. A third mailing was sent notifying delinquent contract holders that the commission would be taking action to move forward on terminating their contracts on Tuesday.
As a result, three people in danger of losing their contracts managed to find the funds to bring their accounts current prior to Tuesday’s meeting, Melcher said.
Those who remain delinquent still have time to make good on their debt and keep their property. Contract cancellation notices won’t go out until 90 days have passed since the commissioner’s action is published in the county’s legal newspapers, and depending on how individuals are notified they will have 60 to 90 days from that point to settle up, Melcher said.
To avoid cancellation, purchasers will need to satisfy: all payments due for installments and taxes through the date of payment; costs of service or publication of notice, if applicable; two percent of any amount of installments and interest due at the time of service; and attorneys’ fees, if any.
Should the contract holders fail to make good on their payments, the properties will revert to the county, which also has the right to sell any remaining personal property.
Melcher noted that contract holders don’t receive any refunds of installment payments they have already paid. All the money collected from land sales and contracted payments is distributed to various taxing entities at the end of a given year, and there is no money available to refund.


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