A confession of judgment is a payment plan that enables you to pay delinquent taxes over time. All unpaid taxes, penalties, special assessments, costs and accumulated interest are combined into a single sum under a 5-year or 10-year plan.
A special interest rate exists for properties with a homestead classification (assessed at 10 percent annually or 0.8333 percent monthly). Payment plans for all other property classifications accrue interest at a per annum rate of 8 percent (assessed at 0.6667 percent monthly).
To establish a confession of judgment, you must pay 10 or 20 percent of the total delinquent tax amount upfront (see eligibility section for details) and a set-up fee. Upon receipt of the final installment, title to the property is deemed free and clear of the delinquent tax lien.
Eligibility
The legal right to confess judgment is restricted to the following parties (Minnesota Statute 279.37):
- Property owner
- Lender under a mortgage agreement
- Buyer under a contract for deed
- A party holding a life estate
- A power of attorney
| N/A | 10-year plan | 5-year plan |
| Eligible property classifications | All property except commercial and industrial, public utility, public utility machinery, unmined iron ore, low recovery iron ore.
| Commercial/industrial and public utility property, with the approval of the county auditor.
|
| Down payment amount | 10 percent of the total delinquent tax amount.
| 20 percent of the total delinquent tax amount and all special assessments. |
| Number of installments | Nine annual payments of 10 percent of the total delinquent tax amount and accumulated interest.
| Four annual payments of 20 percent of the total delinquent tax amount and accumulated interest.
|
If confessing judgment after May 15, you must pay the first half of current year property taxes if they haven't already been paid. If confessing judgment after Oct. 15, you must pay first half, second half or both amounts if they are still due.
Getting started
Complete the following steps to successfully establish a confession of judgment contract:
- Schedule a time to visit the Dakota County Administration Center (please contact Deanna Gunderson at 651-438-4576 to reserve an appointment). We will provide you with an installment estimate that includes the down payment amount and set up fees.
- Present a valid form of identification (i.e., unexpired driver's license, state ID, or passport).
- Bring secured funds, such as cash, cashier's checks or money orders, to cover the initial down payment, set up fee, and current year taxes (if paying after a due date).
- If you need to pay all or a portion of current year taxes, you must pay that amount with a separate check.
- The payment plan is active once we verify your identity, process the fees, and witness you sign the official contract.
Payment information
You are responsible for fulfilling two debt obligations each year.
First, you must pay your annual contract installment by Dec. 31. Partial payments are applied to accrued interest first and the principal balance second. Any payment in excess of the current principal is applied to subsequent installments. Interest will continue accruing on the unpaid delinquent tax amount.
Second, you must pay current year taxes by Dec. 31. Failure to pay by the established due date will result in a monthly penalty application. If you have not paid the annual installment, current year taxes, or neglect both amounts, you will receive a notice by Nov. 30 that details the total amount due by Dec. 31.
Default on payments
A default occurs when you fail to pay an annual installment, current year taxes, or disregard both obligations. You have 60 days from Dec. 31 to pay the late installment balance and any new delinquent taxes.
Dakota County will mail a notice to confessors in default status that describes all unpaid debts and the impending contract cancellation. If it remains unpaid after the 60-day grace period, the contract is officially annulled, and some confessors may lose legal ownership of their property through tax forfeiture proceedings.
According to Minnesota Statute 279.37, you can offer a second confession of judgment on the same delinquent tax amount. Dakota County will refuse additional confessions after you exhaust both attempts.
If you have questions about a confession of judgment, contact Dakota County Property Taxation and Records at 651-438-4576 or taxation@co.dakota.mn.us.