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Iowa Attorney General Opinions

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Iowa Attorney General Opinions

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TAXATION:

Tax Redemption of Separately Owned Mineral Rights by the Landowner. §§ 84.20, 447.1 as amended by 1979 Session, 68th G.A., Ch. 109, 447.5, 448.1, The Code 1979. When the landowner properly redeems from a tax sale of separately owned underlying mineral rights, the title to the mineral rights is vested in the landowner. No tax deed is issued to such redeeming landowner, but the county auditor and county treasurer must comply with the provisions of § 447.5. (Price to Wilson, Marion County Attorney, 6-3-80) #80-6-1

Mr. Terry Wilson, Marion County Attorney: You have requested an opinion of the Attorney General concerning the rights of a landowner who wants to acquire title to separately owned underlying mineral rights which have been sold at tax sale for non- payment of taxes. Specifically, the following questions were presented in your request:

1.          What rights does the owner of the land acquire by exercising his right to redemption under Section 84.20 of the Code of Iowa?

2.          Does the County give a tax deed to the owner of the land to the mineral rights or is there anything further necessary to be done by the County?

3.          How does the owner of the land acquire ownership of the mineral rights?

Section 84.20, The Code 1979 provides:

Tax sale—redemption by owner. When any such rights or interests [mineral rights] not owned by the owner of the land are sold at tax sale, and when the owner of such rights or interests does not redeem under the provisions of chapter 447 within ninety days after such tax sale, the owner of the land shall thereafter have the same right of redemption as the owner of such rights or interests has, and redemption by the owner of the land shall terminate all right of redemption of the owner of such rights or interests.

Pursuant to Chapter 447, before the tax sale certificate holder is entitled to receive a tax deed from the treasurer. Iowa law provides for a period of time whereby the person having an interest in the mineral rights sold may redeem from the tax sale by payment of specified sums to the county auditor who then reimburses the tax sale certificate holder. Such redemption may be made at any time before the right of redemption is cut off by payment to the county auditor of the tax sale price and four percent thereof added as a penalty plus three-quarters percent interest per month on the sale price plus the penalty from the date of sale, and the amount of all taxes, interests and costs paid by the purchaser or assignee for any subsequent year together with a similar four percent penalty added thereto and three-quarters percent interest per month on the whole of such amount from the date of payment of such subsequent taxes. See 1979 Session, 68th G.A., Ch. 109, which amended § 447.1, The Code 1979 and Clarkson v. McCoy, 215 Iowa 1008, 247 N.W. 270 (1933).

Consequently, the landowner could pay the specified amounts where the owner of the mineral rights has not exercised his option to redeem pursuant to Chapter 447. Additionally, it should be noted that §84.20 also provides that "redemption by the owner of the land shall terminate all right of redemption of the owner of such rights or interests [mineral rights]." Therefore, once the landowner exercises his option to redeem pursuant to § 84.20, the owner of the mineral rights is precluded from redeeming.

Section 447.5, The Code 1979 provides:

Certificate of redemption—countersigned by treasurer. The auditor shall, upon application of any party to redeem real estate sold for taxes, and being satisfied that he has a right to redeem the same upon the payment of the proper amount, issue to such party a certificate of redemption, setting forth the facts of the sale substantially as contained in the certificate thereof, the date of the redemption, the amount paid, and by whom redeemed, and make the proper entries in the book of sales in his office, and immediately give notice of such redemption to the treasurer. The certificate of redemption shall then be presented to the latter, who shall countersign it, noting such fact in the sale book opposite the entry of the sale, and no certificate of redemption shall be evidence of such redemption without the signature of the treasurer.

In the event redemption is properly made by the landowner by payment of the correct amount to the county auditor, then pursuant to § 447.5 the county auditor should issue a certificate of redemption, countersigned by the treasurer, to the landowner after he exercises his right to redeem. Clarkson v. McCoy,supra.

Upon redemption by the landowner, no special notice thereof apart from payment of the correct amount is required to be given by the auditor to the tax sale certificate holder. SeeOp. Att'y Gen. #77-9-14.

The effect of payment of the amount necessary to redeem by the owner or other persons entitled to redeem land from a tax sale, when made before the right of redemption is cut off, is to defeat the estate of the purchaser at the tax sale. See 72 Am.Jur.2d, State and Local Taxation, § 997.

From the above discussion, it is clear, with reference to your first and third questions, that when the landowner properly exercises his redemption rights, the effect is to vest the title to the mineral rights in such landowner.

With reference to your second question, tax deeds are only authorized by statute to be issued to holders of tax sale certificates for unredeemed property sold at tax sale. See § 448.1, The Code 1979. In the situation you posed, the landowner is not the holder of a tax sale certificate. Consequently, upon the proper exercise of the right of redemption by the landowner, the county auditor and treasurer need only comply with the provisions of § 447.5.