On November 1, 2011 the St. Louis County Board authorized the Land and Minerals Department to appraise and offer for sale into private ownership all of the county's 278 shoreland leases (County Board Resolution No. 559, November 1, 2011). The current leaseholder has the first right to purchase the land at market value or to continue the annual lease (not to exceed the lifetime of the leaseholder). If the current leaseholder does not wish to purchase or continue the lease the land will be sold at public auction, with the value of any improvements paid to the leaseholder.
The Minnesota Legislature has authorized this sale in the 2012 Minnesota Session Laws, Chapter 236, Sec. 28.
For zoning information, please contact the St. Louis County Planning and Community Development Department at 218-725-5000 (Duluth) or 218-749-7103 (Virginia).
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Shoreland Lease Sales Program
Update: May 2015
Minnesota Session Laws 2012, Chapter 236, Section 28 authorizes St. Louis County to sell, at its sole discretion, tax forfeited shoreland lots that are currently leased. In anticipation of future requests and inquiries regarding the transfer, purchase and continued leasing of shoreland lots, the Land & Minerals Department has developed the following set of operational directives, presented here in the form of Frequently Asked Questions. The Land & Minerals Department is currently in the process of recording the land surveys as they are completed and approved by the County Surveyor. Sale of lease lots cannot occur until there is a recorded lot. Additionally, the Department is imposing easements where applicable, which must also be recorded before sale of lot can occur.
The majority of shoreland leases have a Primary and Joint lessee who are "Joint Tenants." Both will be served with the notice of appraised value. Shoreland leases have been prioritized for survey, appraisal and sale by the Land Commissioner. Appraisals will be mailed to the leaseholders when the surveys have received final approval.
The following questions and answers are provided for general information only and may not be completely accurate in every circumstance, and may not be complete or applicable to all situations or persons and does not purport to be legal advice. These questions and answers are not intended to be legally binding on the County in a particular case. Furthermore, the information provided in this FAQ section does not purport to address all matters relevant to the shoreland lease lot sale process and does not purport to present any one matter in its entirety.
The information provided in the FAQ section is not intended to be and does not purport to constitute a sufficient basis for purchasers or potential purchasers to determine whether to purchase a lease lot. Each user of this FAQ section is solely and independently responsible for investigating the facts relevant to their particular circumstances, including all matters addressed in the FAQ section, and for determining what other sources of information to consult in relation to shoreland lease lots sales. The County is not responsible for identifying, evaluating or bringing to the attention of any purchaser or potential purchaser, information or changes to FAQ’s. Questions regarding legal rights and obligations should be addressed to a private lawyer.
Frequently Asked Questions:
1) When will I receive the appraisal for the land and my personal property (leasehold improvements)?
Appraisals will go out by lake as surveys are approved and recorded. Appraised values and purchase agreements will be presented by mail from Hanft Fride Law Firm. We do not know exactly when your lake’s values will be sent. As a leaseholder, if you choose to purchase, you only have to purchase the LAND. The improvements appraisal is relevant if you choose NOT to purchase the land, as it determines the amount a purchaser at a subsequent public auction would have to pay to you for the value of your improvements. Leaseholder improvements include the cabin and any other structures, wells and septic systems on the designated lot.
2) What are my options after receiving the appraised values and purchase agreement?
You have three options: (1) to buy the lot; (2) to continue leasing, but only for the lifetime of the current lessee(s); or (3) to relinquish and your lease will be terminated and the lot will be sold at public auction.
3) When do I need to decide whether to buy my leased lot or continue leasing with the county?
If you choose to purchase the land, you must pay the appraised value of the land in cash within 180 days from the date of mailing of the appraised values and purchase agreement. However, we request a response within 90 days to allow time for closing. If you choose to continue leasing, you must submit an executed leasing agreement within 180 days from the date of mailing of the appraised values.
4) If I change my mind and decide not to purchase after submitting my earnest money, do I get my earnest money back?
No. However, there may be an extenuating circumstances and a request for a refund setting forth the extenuating circumstances must be made in writing and may be approved by the county. Such a case would be handled individually based on its unique circumstances and variables.
5) What if I disagree with the appraised value of the land?
The legislation does not provide for a challenge to the land value appraisal, since the land belongs to the state of Minnesota. Pursuant to the legislation, the county has selected appraisers who meet the appraisal standards established by the federal Farmers Home Administration or the federal Veterans Administration, and are licensed under Minnesota Statutes, section 82B.03.
6) If I disagree with the appraised value of my improvements can I hire my own appraiser?
Yes, but, the appraiser you choose must also meet the qualifications described in the legislation and you must give notice of your intent to object within 10 days from the date of mailing of the appraised value. Your improvements reappraisal must then be delivered to the Land and Minerals Department within 60 days from the date of mailing of the original appraised value. The leaseholder is responsible for the cost of the second appraisal. If necessary, the legislation also allows for a third appraisal in order to come to a final agreement on the value of the improvements. The cost of this third appraisal must be paid equally by the county and the leaseholder. The improvements owned by the leaseholder have been appraised separately from the land.
7) Will all parcel corners be monumented as part of the survey process?
With the exception of the parcels for Leases L03850055 and L03850056, all parcel corners will be monumented. The preliminary survey work has been completed, which includes all required corner certificates and preliminary plats submitted to the county by April 11, 2014. Surveyors will place additional monumentation after the plats have received final approval from the County Surveyor.
8) If I choose to purchase, what access guarantees will I have.
St. Louis County makes no representations, warranties, nor guarantee with respect to access to state tax forfeited lands sold.
9) If I choose to purchase the lot, how will the lot be conveyed?
Upon payment of the purchase price, the county will make application to the State of Minnesota, Department of Revenue for a State Deed which shall be sent by the state directly to the county for recording.
10) If I choose to purchase, do I still need to pay my 2015 lease fee?
Yes. Your 2015 lease fee will be pro-rated and included in your closing costs.
11) What is the cost of the new lease fee if I decide to continue my lease with the county?
The annual lease fee for those opting to continue in the leasing program will be the sum of the current lease fee rate (adjusted by the Consumer Price Index) and the estimated property taxes based on the assessed fair market value of the land, as if it had been returned to private ownership. The assessed value is calculated by the County Assessor’s Office to determine the tax rate. If you continue to lease, the increase will be in effect for 2016.
12) Can I continue to lease now, but also have the option to terminate my lease in 5, 10 or even 15 years?
Yes. However, you will NOT have the option to purchase at that time. The option to purchase is a one-time offer provided by the special legislation. If you decide to terminate the lease in the future, it will be sold at public auction.
13) Is it true that if I choose to continue my lease with the county, the lease will end with my death and cannot be passed on to a family member?
Yes. The option to continue the lease is available only to leaseholders whose names appeared on the lease on or before April 27, 2012 (the date the legislation was signed), or to leaseholders who made a written request for a transfer on or before April 27, 2012, which was subsequently approved. The lease will remain in effect only until the death of the named leaseholder at that time. If there is more than one leaseholder (e.g. spouses as joint tenants), the lease will terminate upon the death of the later of the two.
14) If I continue to lease, and I later decide to terminate the lease, what happens to the cabin and other buildings?
The shoreland lease sales legislation expires on April 29, 2017. Before that date, the disposition of improvements will be handled pursuant to the legislation which is summarized in number 16 below. On and after April 29, 2017, the management of all continuing leases and disposition of improvements will revert to the lease practices prescribed in your revised lease agreements. Those who continue to lease will sign a new lease agreement with terms and conditions set by the county board. The county board will have a new policy in place by 2016.
15) If I continue to lease, do I still have to request building permits/firewood permits, etc.?
It is expected the lease will be subject to the new terms and regulations put in place as determined by the County Board in 2016. You will still have to request building authorizations, firewood permits and dead and downed tree removal permits. Leaseholders will be required to sign a new lease agreement containing revised language pursuant to the shoreland lease legislation. 16) If I decide NOT to purchase the lot, and the lot is then offered at a public auction, what is the starting minimum bid? When will I be reimbursed for my improvements? The appraised value of the lot is the minimum bid price. Only the lot will be sold at public auction (and not the improvements). As a condition of the sale, payment for the appraised value of your leasehold improvements must be made within 15 days of the auction by the winning bidder. We do not know at this time when the auction(s) will be held. 17) If I decide NOT to purchase the lot, and the lot is offered for sale at public auction but doesn’t sell immediately, what happens to my lease and improvements? First, you may continue to lease for the duration of 2015 if the lot does not sell. If you choose to occupy the lease through December 31, 2015, you will pay your annual fee as usual. If you choose NOT to continue to lease and/or vacate the lease mid-year, your lease fee will be pro-rated accordingly.
If the lot has been offered for sale at one public auction, but does not sell, the lot may be made available for purchase through an “over-the-counter” sale from the Land & Minerals Department, at the appraised price. If the lot does not sell in this manner, it may again be offered at an upcoming land sale auction. If your improvements remain on the lot at that time, you will be reimbursed for them at the time of sale.
18) If I decide NOT to purchase the lot, but the property with my improvements doesn’t sell in the first auction, how do I handle insurance on my improvements and routine maintenance?
Continuation of insurance on the structures is at the discretion of the lessee, as it is currently. Lessees will be allowed to perform maintenance upon prior knowledge and written authorization of the Land & Minerals Department.
For additional information, please contact the St. Louis County Land & Minerals Department at 218-726-2606 in Duluth or 218-742-9898 in Virginia, or online at firstname.lastname@example.org.