Tax-forfeited land

Learn about tax-forfeited property

Tax-forfeited land is the result of unpaid property taxes. The process from delinquent taxes to forfeiture is:

Taxes become delinquent in January the year following when the taxes were due.
Notification to the taxpayer of record is given.
District Court enters judgment against the property. Unpaid taxes are a lien against the property, not a personal debt of the owner.
Judgment is entered as of April in the delinquent year.
“Period of redemption” begins. Depending on ownership, use and location of the property, the period of redemption is either one or three years from judgment.
If the property taxes remain unpaid after the statutory “expiration of redemption period”, the land forfeits to the State of Minnesota. the county is then responsible for management of the tax-forfeited land program.

What happens to tax-forfeited property

After land is forfeited all taxes and special assessments prior to the forfeiture date are canceled.

For a period of time a previous owner can go through the repurchase process. (see the Repurchase process section)
A classification process takes place to determine whether the land will remain in public ownership and be managed for public benefit, or if it will be returned to private ownership via a public sale. (see the Classification process section)

Once decided, lands are offered for sale by a following method:

Sale to a government entity (i.e., housing and redevelopment authority, public works, a city, etc.)
Sale to the public (i.e., public auction, traditional broker sales, online auction)
Adjacent owner auction for unbuildable, irregularly shaped lots
Over the counter sale for some properties not sold at auction

Repurchase process

It is possible for homeowners to repurchase tax-forfeited land. For a limited amount of time after the date of forfeiture, (Minnesota Statute MS 282.241) allows homeowners or others with title rights to repurchase the land. The person seeking to repurchase will have to pay all taxes, assessments, and maintenance costs incurred by the county during the time the land was forfeited.

Private parties are not allowed to purchase property through the repurchase process unless they were listed on the title.

Parties wanting to repurchase may qualify to do so via contract for deed. Homestead properties can have a 10-year contract, non-homestead properties only qualify for a 4-year contract.

Applying for repurchase

1. Begin application:

Call our office to speak with a property manager.
Arrange an appointment or to have items mailed to you.

2. Complete application process (at appointment or by mail). you need to:

Pay required down payment fee by cashier's check, money order or certified check. The amount is calculated by the property manager and will include a non-refundable application fee.
Demonstrate proof of ownership or assigned interest in the property.
Discuss required inspection of property and impact on the owner (if any).
Review additional requirements for purchases being made by contract for deed.
Complete an application and sign already-prepared documents.

3. Prepare for the hearing:

Receive legal notices and the hearing date.
Contract for deed purchasers also need to:
- Get insurance for any structure(s). Send proof to the property manager or bring it to the hearing.

4. Attend the hearing. During the hearing you will:

Find out if you will be approved for repurchase.
Pay any additional expenses.
Sign the contract for deed, if applicable.

Classification process

The purpose of this statutory meeting is to classify or reclassify state-owned tax-forfeited lands as conservation or non-conservation, as outlined in Minnesota Statute 282.01. Classification also includes current and potential use of the land.

How to participate in the classification process

At the classification meeting or in writing prior to it, any person, governmental entity (or representative) or agency possessing pertinent information concerning a tax-forfeited land on the current list may:

Make or submit comments and recommendations about the pending classification or reclassification
Describe plans, ideas, or projects that may involve use or acquisition of the lands on the list, by that or another governmental entity
Provide information about relevant components of current municipal or metropolitan comprehensive land use plans that incorporate the area in which the lands are located

The difference between tax-forfeited land and mortgage foreclosure

Mortgage foreclosure occurs when a property owner fails to make their mortgage payments to their bank or lender. It is a process between the owner and the lender.

People often confuse the two processes. Tax-forfeiture occurs when an owner can’t pay their property taxes. It is a process between the owner and the county. Tax forfeiture usually lags behind foreclosure by several years — in part, because the tax-forfeiture process takes much longer.

The reasons for foreclosure and tax-forfeiture are often the same — owners fall into financial trouble because of job loss, a sudden and expensive medical crisis, unexpected property expenses, and other reasons. Sometimes these two processes are occurring at the same time.

Per the Minnesota Secretary of State, as long as you still reside in your house you can still vote even if it is in foreclosure.