A Confession of Judgment contract is a formal payment plan in which the owner of a property with delinquent taxes pays off the taxes in yearly installments (either a five or ten-year payment plan, as determined by the county auditor).
Requirements for eligibility to enter into a Confession of Judgment are:
- You must be the Owner, Lender (Mortgagee), Buyer (under a contract-for-deed agreement), or someone holding a Life Estate on the property
- The property must meet the eligibility requirements established by Minnesota Statutes 273.13 and 279.37.
Requirements that must be met to keep the contract valid are:
- 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 is to be paid annually on or before December 31 of each year.
The annual Confession of Judgment payment includes a monthly interest charge, calculated on the unpaid balance, to be paid with each installment. There is also an $8 fee for each full or partial release of judgment.
NOTE: 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 cancellation. This means that your property will most likely Forfeit to the State of Minnesota.
Confessing Judgment: The Process
The process of confessing judgment on a property is relatively simple.
- The property owner or eligible person files a request with the county auditor to confess judgment on a property (you must have delinquent property taxes, though, to request a Confession of Judgment).
- 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).
How do I know whether my property is eligible for the five or the ten-year payment plan?
Property types vary in eligibility based on their usage class, which is established by Minnesota Statutes 273.13 and 279.37. Please note, however, that a property must have an estimated market value of $500,000 or less to be eligible for the five-year plan.
Certain types of property are NOT ELIGIBLE for any type of Confession of Judgment. These types are:
- Commercial/industrial properties with market values over $500,000
- Public utilities with market values over $500,000
- "Employment property" located in competitive cities/zones or border cities
- Land containing un-mined iron ore and/or low-recovery iron ore
- All other property not included in the five or ten-year categories
- Vacant land
How much is the fee to process a Confession of Judgment?
Ramsey County's fee is $100.