A Confession of Judgment contract is a formal payment plan where the property owner pays off delinquent taxes in yearly installments (either a five- or 10-year payment plan, as determined by the county auditor).
Eligibility requirements
- You must be the owner, lender (mortgagee), buyer (under a contract-for-deed agreement), POA, or someone holding a life estate on the property.
- Property types vary in eligibility based on their usage class. The property must meet the eligibility requirements established by Minnesota Statutes 273.13 and 279.37.
- There is a $100 processing fee for each contract.
Contract requirements
- Current taxes must be paid each year before they become delinquent (taxes become delinquent on the first business day in January of the year following that in which they are due).
- The installment, with interest, is to be paid annually on or before December 31 of each year.
The annual Confession of Judgment payment includes a yearly interest charge (10% for homestead property, 8% for all others), calculated on the unpaid balance, to be paid with each installment. Failure to make the annual installment payment plus the accrued interest and cost, and/or failure to pay the current tax, will default the Confession of Judgment and subject it to cancelation. This means that your property may be subject to forfeiture to the State of Minnesota.
Process
- The county auditor determines the eligibility of the party proposing to confess judgment, establishes whether their property is eligible for the five or ten-year payment plan, and prepares the written contract for the Confession of Judgment.
- The property owner and/or taxpayer signs the written contract, thereby agreeing to pay all the delinquent taxes over the time agreed upon.
Limitations
The property owner and/or taxpayer are not allowed to make more than two Confessions of Judgment on the same piece of property for any amount of delinquent taxes (as mandated by Minnesota Statute 279.37, subd. 10).
Types of property not eligible:
- "Employment property" located in competitive cities/zones or border cities.
- Land containing unmined iron ore and/or low-recovery iron ore.
- All other property not included in the five or ten-year categories.
- Vacant land.