Every year, thousands of Arkansas properties end up in tax delinquency. Many of these parcels are eventually sold by the Commissioner of State Lands (COSL) to recover unpaid real estate taxes. For bargain hunters, these auctions can seem like a goldmine. But what looks like a deal on paper often carries hidden costs—and legal risks—that make it anything but a bargain.
At Gramling Law Firm, we help buyers understand what they’re really getting when they purchase tax-delinquent property. If you’re considering a COSL purchase, here’s what you need to know before you bid.
What Is a COSL Sale?
When real estate taxes go unpaid for several years, the county certifies the property to the State. The Commissioner of State Lands then offers the parcel for sale—either at a public auction or through online bidding. The goal is to collect the back taxes and return the property to productive use.
The winning bidder receives a limited warranty deed—but that’s just the beginning of the story.
What Makes These Sales Risky?
You Don’t Get Clear Title
The deed from the COSL is not a general warranty deed. It comes without title insurance and without a guarantee that the property is free from liens, encroachments, or ownership disputes.
To truly secure your ownership, you’ll likely need to file a quiet title lawsuit—a legal action to clear defects and make the title marketable.
The Sale Can Be Set Aside
If the original owner or any lienholder wasn’t properly notified of the sale, they can come back and challenge the transfer, even years later. Improper notice is one of the most common reasons tax sales are invalidated in Arkansas.
You Might Inherit Hidden Liabilities
Federal tax liens, environmental violations, easements, and utility bills may survive the sale. COSL deeds do not always extinguish these encumbrances, and clearing them can be expensive—or impossible.
What’s Actually for Sale?
Some COSL parcels are abandoned homes. Some are landlocked patches in the woods. Others are strips of unusable land between commercial properties. What they often have in common is that they were let go for a reason.
You’re not just bidding on the back taxes—you’re inheriting whatever problems caused the previous owner to walk away.
How to Protect Yourself
- Run a title search before you bid. Know who owned it, who may still have a claim, and whether it’s encumbered.
- Budget for a quiet title action. This is often necessary to secure financing, resell, or build.
- Visit the property in person. Many parcels are landlocked or unbuildable. Google Maps alone won’t cut it.
- Consult an experienced real estate attorney. Especially before investing significant money or planning development.
Final Thought: Know What You’re Buying
Buying from the Commissioner of State Lands isn’t necessarily a bad idea—but it isn’t always a good one either. These sales are buyer beware in the purest sense of the term. What seems like a cheap path to real estate ownership may be a costly legal quagmire.
At Gramling Law Firm, we represent buyers in:
- Quiet title actions
- Redemption and possession disputes
- Pre-bid title research
- Clearing title for resale or development
If you’re considering a COSL property—or already own one and don’t know what to do next—we’re here to help you move forward with clarity and confidence.