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Advanced Mineral Conveyancing and Title Issues - Part 2

Laura Lindley, Sarah Sorum, Advanced Mineral Title Examination – Oil, Gas, and Mining

I. Tax Sales and Titles Derived through Tax Deeds

A. Introduction

The title examiner will frequently encounter a tax sale followed by issuance of a tax deed to a new owner by the authorized county official, particularly during the dust bowl and Depression years.1 Many commentators have noted the inherent uncertainty of title derived through a tax deed.2 Courts historically have viewed any kind of forfeiture with disfavor. The fact that a tax sale proceeding is, in most states, an in rem proceeding and the taxpayer may receive notice only through publication, seems to have contributed to a tendency by courts to find reasons to protect the dispossessed taxpayer. The North Dakota title standard on tax titles provides an excellent summary of the lack of title security associated with title derived through a tax deed:

There is no way of knowing what the courts will consider to be a jurisdictional defect [in the tax sale proceeding], but historically they have been exceedingly stringent in requiring exact and precise compliance with all of the statutory steps in the tax sales (now tax lien foreclosure) proceedings. Moreover, NDCC 57-45-11--which has generated a great deal of case law--specifically authorizes a quiet title action by an interested party against the tax deed grantee of the county, which seemingly indicates a legislative lack of confidence in t