HB 1343 — Summary
Purpose
- To amend North Dakota law governing the homestead exemption and homestead declarations and to establish the priority of tax liens for unpaid property taxes and special assessments over most other liens on real property.
Key provisions
- Homestead exemption (NDCC 47-18-01)
- Confirms the homestead consists of the land and dwelling where the claimant resides, with appurtenances and improvements.
- Caps the total homestead value exempt from judgment lien, execution, or forced sale at $150,000 (measured “over and above liens or encumbrances”), except when the claimed exemption arises from property taxes or special assessments—then the homestead equals the total value of the property.
- When homestead is subject to execution (NDCC 47-18-04)
- Clarifies categories of debts for which a homestead may be levied (e.g., mortgages executed by owner(s); mechanics’ liens; purchase-money debts; taxes and special assessments).
- Provides that if, after appraisal, the homestead’s value exceeds $150,000 above existing liens and encumbrances, the homestead may be reached to the extent of that excess (excluding taxes and special assessments except as noted).
- Declaration of homestead (NDCC 47-18-18)
- Requires a claimant to execute and acknowledge a written declaration of homestead (same formality as a real property grant) and file it for record.
- States that a homestead claim by a debtor who received a discharge (bankruptcy?) is itself a declaration of homestead.
- Filing a certified copy of a discharge with legal description in the county recorder’s office constitutes notice that the property is a homestead.
- A declaration under this section is executed under penalty of perjury.
- Tax-lien contents (NDCC 57-28-03)
- Expands required contents of a notice of tax lien foreclosure to include information related to the homestead exemption in chapter 47-18 and the process to claim property as a homestead.
- New lien-priority section (new to chapter 57-28)
- Establishes that a lien for unpaid property taxes or special assessments has priority over any judgment, mortgage, or other lien or claim entered against the real property, except for liens under NDCC §35-34-02.1.
- Specifies that a property tax lien has priority over a lien for special assessments.
Who would be affected
- Homeowners / homestead claimants — changes to the statutory cap ($150,000) and procedures for declaring homestead; added notice protections in tax lien filings.
- Mortgage lenders and other secured creditors — tax liens will be statutorily prioritized ahead of most mortgages and judgments (potentially affecting lending risk and title priority).
- Counties and taxing authorities — strengthened priority of tax liens and a required disclosure (homestead information) on foreclosure notices may improve tax collection/enforcement.
- Judgment creditors and holders of special assessment liens — potential reduction in priority relative to property tax liens.
Procedural / timeline notes
- Introduced: (per provided information) Nov. 15, 2024.
- Status (as provided): Reached second reading but failed to pass — yeas 25, nays 62.
- Companion bill: SB 1519.
- Effective date: Not specified in the text provided.
Practical impact
- Gives property tax liens stronger statutory priority over most other claims, which can protect local tax revenue but may alter creditor priorities and market perceptions of mortgage and judgment security on real property.
- Requires tax-lien notices to inform owners about homestead protections, potentially increasing homeowner awareness and claims.
