Sale Type: | Tax Deed |
Interest Rate: | N/A |
Bid Method: | Highest qualified bid at or above the county minimum price |
None after the October 1 foreclosure date. The former owner or close family can repurchase while the county holds title. | |
Sale Date(s): | Third Tuesday of November |
State Statute(s): | |
Limited. Unsold property can be sold privately before the next annual sale. | |
State Website: |
North Dakota does not sell tax lien certificates to investors, so there is no interest rate to earn and no investor redemption period. Instead, the county forecloses on the tax lien, takes the property by tax deed, and sells it at a public auction each November. For an investor, that auction is the main route to tax-delinquent property. Here is how the process works under North Dakota Century Code Chapter 57-28.
How North Dakota Tax Lien Foreclosure Works
Each year, on or before June 1, the county auditor gives notice of foreclosure of the tax lien on property where two or more years have passed since the tax became due. The notice goes to the owner, mortgagees, lienholders and others with an interest in the property, and it is also published in the county’s official newspaper. The foreclosure date is October 1 after the notice is served.
Before that date, the owner or another interested party can stop the foreclosure by paying the delinquent taxesProperty taxes that remain unpaid past the due date, which may result in penalties, interest, and eventually a tax lien being placed on the property., special assessments, interest, penalties and foreclosure costs. If nobody does, the interest of the owner, mortgagees and lienholders passes to the county. The auditor then issues a tax deed to the county. That deed passes the property free of most encumbrances, but certain items can remain, including installments of special assessments, recorded easements and rights of way.
The Annual County Sale
Property the county has acquired by tax deed is appraised before the sale, and the board of county commissioners sets a minimum sale price. That price is meant to cover the taxes, special assessments, penalties, interest and costs, plus an estimate of current-year taxes. If the property is worth less than the amount owed, the board sets a fair minimum price instead.
The annual sale begins on the third Tuesday of November, usually at the county auditor’s office or the place where district court is held. The county posts notice at least 15 days before the sale and publishes it at least 10 days before. Each parcel is sold at auction to the highest qualified bidder, and no bid can be lower than the minimum price. You do not bid down an interest rate in North Dakota, since there is no certificate. A person who owes delinquent taxes to any county is not qualified to be the high bidder.
Payment Terms
A buyer can pay in cash or put down one-fourth of the price and pay the rest in equal annual installments over no more than ten years. Installment buyers receive a contract for deed, and the county board sets the interest rate, which state law caps at 12 percent. If the buyer defaults, the county can cancel the contract. When the price is paid in full, the county auditor delivers a deed that conveys the county’s entire interest in the property. Once the deed or contract is delivered, the property becomes taxable to the buyer.
Properties That Don’t Sell
Property that is not sold at the November auction may be sold by the county before the next annual sale for not less than the minimum price. This is the closest North Dakota comes to an over-the-counter purchase, and each county handles it differently, so ask the county auditor what is available.
Owner Rights After Foreclosure
North Dakota does not have a redemption period after the foreclosure date. Instead, the former owner, or the owner’s executor, administrator, parent, spouse or child, can repurchase the property as long as the county still holds title. A city with unpaid special assessments on the property also has a priority right to buy it for cash at the appraised value.
Surplus Proceeds
If the property sells for more than the amount owed, the county keeps the extra amount for 90 days. The owner of record can claim it during that period. Disputed claims go to the clerk of district court, and unclaimed amounts go to the state’s unclaimed property administrator.
What Investors Should Check
Before you bid, order a title search, check for special assessment installments that stay with the property, and visit the property. A property may have back taxes, liens that survive or physical problems, so read up on the risks of buying tax deed properties. State law also lets a county convey title free of claims based on defects in its foreclosure process once certain conditions are met, so ask a real estate attorney how that affects the title you receive and whether a quiet title actionA lawsuit filed to establish clear ownership of a property and resolve any disputes or claims against the title. makes sense. Do your due diligenceThe research and investigation process an investor conducts before purchasing a tax lien or tax deed to evaluate the property and assess risk. on every parcel, and see our tax lien states vs. tax deed states map to compare North Dakota with other states.
North Dakota law can change, and each county runs its sale differently. Confirm the current rules, dates and minimum prices with the county auditor and a qualified attorney before you bid.