37-289. Procedure on cancellation of lease; notice, default, hearing and appeal

A. Before any lease is canceled, the commissioner shall take the following steps:

1. Notice of default shall be sent by certified mail to the lessee and to any parties who have registered with the department as mortgagees or other lienholders of the lessee's interest. The notice shall inform the lessee and registered mortgagees and lienholders of the specific nature of any default and their right to cure any curable default.

2. For leases of ten years or less, the lessee and registered mortgagees and lienholders have thirty days from receipt of notice of default in which to cure any default involving failure to pay rent, taxes or other assessments, and forty-five days from the receipt of notice to cure any other curable default.

3. For leases of more than ten years, the lessee and registered mortgagees and lienholders have sixty days from receipt of notice of default in which to cure any curable default.

4. As a condition of curing a default, the commissioner may require the lessee and registered mortgagees and lienholders to waive any right to cure future defaults of the same type. A waiver of the right to cure is valid only until the expiration of the current lease.

B. If the default is not cured within the applicable time period, the commissioner may make an order canceling the lease, and if it appears that the lease was procured through fraud, deceit or wilful misrepresentation, the improvements on the land shall be forfeited to the state. If the lease is canceled for any other reason, the lessee shall be permitted to remove the lessee's improvements at any time within sixty days after the date of cancellation.

C. In the event of cancellation the commissioner shall make a formal order canceling the lease, and a copy of the order shall be mailed to the last known post office address of the lessee and registered mortgagees and lienholders.

D. The lessee and registered mortgagees or other lienholders may appeal a cancellation order pursuant to title 41, chapter 6, article 10. If no appeal is made within the prescribed time or if no notice is filed with the department pursuant to section 37-255, subsection C, the order shall become final and the lease shall be canceled on the records of the department.