April 21, 1983

Ms. Joan P. Baker 
Hand County State's Attorney 
Box 91 
Miller, South Dakota 57362

Official Opinion No. 83-20

Special Assessment Lien

Dear Ms. Baker:

You have requested an official opinion based on the following factual situation:

FACTS: 

On January 1, 1965, the City levied special assessments for the construction of curb and gutter on a certain parcel of land in the City.  The special assessments were payable in five installments from 1965 to 1969.  No assessment certificates were issued to the contractor; instead the cost of the curb and gutter was paid by the City's general obligations fund. 

The curb and gutter assessments were not paid nor were the real estate taxes paid on said parcel for a period of six years (1964 to 1969).  The County took tax deed to the parcel in 1970. 

On May 17, 1971, Hand County sold the said property to Buyer I for delinquent real estate taxes only.  The curb and gutter assessments were not paid.  On July 6, 1971, Hand County confirmed the sale (which was for the appraised value) and executed a Quit Claim Deed to Buyer I. Buyer I's estate sold the parcel to Buyer II on November 12, 1981.

Based on these facts you have asked the following questions:

QUESTIONS: 

1.  Is the City's special assessment lien barred or is the present owner of record (Buyer II) or anyone else now required to satisfy the special  assessment lien? 

2.  If the City's special assessment lien is not barred and assuming that the City is not empowered to compromise on the principal installments assessed against said property, then is the City empowered to compromise on the interest and penalty assessed against said lien?

Although the curb and gutter special assessments cover the period of time from 1964 to 1969 the applicable law is that which was in effect when the county took tax deed to the land in 1970.

At that time the statue, so far as applicable here, provided, after requiring that the proceeds be applied first to the payment of expenses and then to the principal and interest of taxes and finally to past due installments of special assessments: 

'. . . if no balance remains for said third purpose, such past due installments of special assessments shall, nevertheless, be cancelled on the books of the county treasurer and he shall notify the city auditor of the fact of such tax sale and such cancellation of past due installments.'

The rights of the parties are determined at the time when the tax deed was taken and when the sale was made in 1971.  See State ex rel Waldo v. Flypaa, 54 N.W. 599 (S.D. 1893).  Inasmuch as there were no proceeds left to pay the special assessment liens when the county took its tax deed and proceeded to sell the land, the treasurer was required to cancel such assessments and notify  the city auditor.

In view of this the answer to Question 1 is the city special assessment liens were cancelled in 1970 and thus are barred.

Question 2 is not applicable.

Respectfully submitted,

Mark V. Meierhenry
Attorney General