37-241. Terms of sale of state land; payment; interest rate

A. The terms of sale of state land are as follows:

1. At least ten percent, but not more than twenty-five percent, of the appraised value, as stated in the auction notice, which shall be applied to principal, together with the required fees prescribed pursuant to section 37-107, shall be paid by cashier's check or any other form of payment approved by the commissioner on announcement of the successful bidder.

2. If the amount bid for the land exceeds the appraised value, further payment shall be made within thirty days so that the total amount paid, including the amount paid on the date of sale, equals the percentage of the bid, as stated in the auction notice, which shall be allocated to principal, together with the required fees prescribed under section 37-107.

B. On payment of the amounts provided in subsection A of this section, on compliance by the purchaser with the requirements of this article and on payment of the fees under section 37-107, a certificate of purchase shall issue as provided in section 37-244. On full payment for the entire tract of land sold within thirty days after the auction, the department shall issue a patent as provided in section 37-251.

C. If the purchaser fails to complete the payment of the percentage of the bid stated in the auction notice, together with the fees required pursuant to section 37-107, or to enter into a contract of sale within the time provided in the certificate of purchase offered by the department:

1. The purchaser forfeits all amounts paid, including:

(a) All payments made on the purchase price, which shall be deemed to be rental for the land.

(b) All amounts paid under section 37-107.

2. The commissioner may declare that the bid placed before the final bid accepted is the highest bid and that bidder has five business days after notification by the department to pay by cashier's check or any other form of payment approved by the commissioner all amounts due under this section and section 37-107.

D. The balance of the purchase price is payable as follows:

1. The commissioner shall establish before the notice of sale the length of the term over which the balance shall be paid and whether a variable or fixed interest rate is appropriate or whether the entire balance without interest is due and payable within thirty days after the auction. This determination shall be based on the nature of the land being sold and general market conditions in effect at the time.

2. After establishing the length of the term and whether a fixed or variable rate is appropriate, the commissioner shall notify the state treasurer to establish the interest rate after consideration of local prevailing prime interest rates and mortgage rates and the maximum amount of interest set by statute by this state, if any.

3. If a variable rate is established, the interest rate charged a purchaser may vary from year to year. The department shall annually notify each purchaser of the interest rate specified by the state treasurer to be paid by the purchaser for the following year and the total amount of interest payable the following year with the purchaser's annual payment.

E. The commissioner shall establish before the notice of sale the length of the term over which the balance shall be paid. The term shall not exceed twenty-five years.

F. The length of term and interest rate and whether the rate is variable or fixed shall be considered terms of the sale to be included in the notice required by section 37-237.

G. The purchaser may discharge the entire debt at any time and be entitled to a patent for the land if the purchaser pays the entire purchase price, together with the applicable fees, and demonstrates that all terms and conditions of the certificate of purchase have been satisfied.