Limitations Upon Real Estate Ownership.

  1. Law
  2. Oklahoma Statutes
  3. Corporations
  4. Limitations Upon Real Estate Ownership.

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LIMITATIONS UPON REAL ESTATE OWNERSHIP

A. No corporation of any sort, whether coming within the general scope of the Oklahoma General Corporation Act or not, except as provided for in this section, shall own, hold, or take any real estate located in this state outside of any incorporated city or town, or any addition thereto.

B. The provisions of the Oklahoma General Corporation Act shall not be construed to prohibit the owning, holding or taking of: 1. Such real estate as is necessary and proper for carrying on the business for which any corporation has been lawfully formed or domesticated in this state;

2. Naked title to real estate by any trust company, as trustee, to be held solely as security for indebtedness pursuant to such trust or as trustee of an express or testamentary trust for the benefit of natural persons;

3. Any real estate mortgage held by any corporation to secure any loan or debt; 4. Any real estate acquired by any corporation upon the foreclosure of any real estate mortgage held by such corporation or acquired in the collection of any loan or debt due such corporation, except as provided for in subsection C of this section; or

5. Any real estate acquired by any corporation for lease or sale to any other corporation, if such latter corporation could have legally acquired the same in the first instance.

C. Any real estate located in this state outside of any incorporated city or town, or any addition thereto, acquired by any corporation by mortgage foreclosure or in collection of debt as provided for in paragraph 4 of subsection B of this section, shall be sold and disposed of within seven (7) years from such acquisition.

D. The provisions of subsections A through C of this section shall not apply to religious, educational, charitable or scientific corporations, owning or holding taxable property.

E. 1. Any person who takes or holds any real estate for the use or benefit of any corporation with the intent of evading the provisions of this section, shall, upon conviction, be deemed guilty of a misdemeanor and punished by a fine of not less than Fifty Dollars ($50.00) nor more than Five Hundred Dollars ($500.00) or by imprisonment in the county jail for a term not less than thirty (30) days nor more than six (6) months, or by both such fine and imprisonment.

2. Any corporation that fails or refuses to file a statement as required by the provisions of subsection F of this section shall, upon conviction, be deemed guilty of a misdemeanor and punished by a fine not exceeding One Thousand Dollars ($1,000.00).

F. 1. On or before the first day of April of each year, every corporation holding any real estate in contravention of the provisions of this section shall file in the office of the county clerk of each county where such real estate is located, a statement in duplicate containing the legal description of each tract, piece, or parcel of real estate so owned or acquired, the date of the acquisition of each tract, piece, or parcel, the amount of the last preceding assessed valuation thereof and the purpose and method of the acquisition thereof. The statement shall be verified by the oath of an officer or duly appointed agent of the corporation.

2. The county clerk shall keep a permanent index and record of each statement filed by corporations pursuant to the provisions of this subsection in a permanent record book, which shall be in the form prescribed by the State Auditor and Inspector. One copy of each statement so filed shall be retained as a part of the permanent records of the office of the county clerk.

3. Within thirty (30) days after the statement provided for in paragraph 1 of this subsection is filed, the county clerk shall deliver the other duplicate to the district attorney of such county. G. 1. Any corporation owning or holding any real estate in violation of the provisions of subsections A through E of this section, in addition to other penalties provided for in the Oklahoma General Corporation Act, shall be required to pay, for each year, or fraction thereof, during which such title or interest is thus unlawfully owned or held, the following penalties:

  • a.For the first year, one percent (1%) of the assessed value of such real estate unlawfully owned or held;
  • b.For the second year, two percent (2%) thereof;
  • c.For the third year, three percent (3%) thereof;
  • d.For the fourth year, four percent (4%) thereof;
  • e.For the fifth year, five percent (5%) thereof;
  • f.For the sixth year, six percent (6%) thereof; and
  • g.For each year thereafter, six percent (6%) thereof.

2. Provided, however, that no corporation shall be subject to more than one penalty, for each calendar year, for each tract, piece or parcel of real estate thus held in violation of the provisions of this section, but the penalties provided for in paragraph 1 of this subsection shall be cumulative.

3. In determining the penalty under this subsection, the assessed value of the real estate fixed for the purpose of levying ad valorem taxes, which last shall have become due and payable preceding the date of the accrual of such penalty, shall be taken.

4. The penalties, upon collection, shall be immediately paid over to the Commissioners of the Land Office for credit to the permanent school fund of this state created pursuant to Section 2 of Article XI of the Oklahoma Constitution.

5. The state shall have a lien against any piece, parcel or tract of real estate to secure the payment of all penalties, interest, and fees accruing from such unlawful owning or holding of any such real estate; provided, that such lien shall not attach thereto, or in any way affect the title thereof, until an action to subject such real estate to such lien and a foreclosure thereof has been instituted in the district court of the county where such real estate is located. Filing of such action shall be notice lis pendens and anyone thereafter acquiring any such real estate shall take it subject to such lien.

H. 1. Whenever the district attorney of any county has reason to believe that any real estate located in such county is owned or held by a corporation in violation of the provisions of this section, the district attorney shall give written notice to such corporation that:

  • a.it is subject to the penalties provided for in this section;
  • b.such penalties must be paid to the district attorney within thirty (30) days from the date of such notice; and
  • c.there is additionally due and payable to the district attorney a collection fee equal to fifteen percent (15%) of the total penalties collected as to any tract, piece or parcel of real estate which is unlawfully owned or held. If the institution of an action is necessary to procure a judgment for the collection of such penalties, the collection fee shall be increased to twenty-five percent (25%) of the penalty recovered, and in no event less than One Hundred Dollars ($100.00). Such fee shall be retained by the district attorney as remuneration for services rendered in collecting such penalties, which shall be in addition to any compensation otherwise provided for by law.

2. In the event such penalty shall not be paid within thirty (30) days from the date of such notice, the district attorney shall institute an action in the name of the state in the district court of the county where such real estate is located for the recovery of the penalties, together with interest thereon at the rate of ten percent (10%) per annum from the date of such notice, the collection fee provided for in paragraph 1 of this subsection, all costs of the action, and for a further judgment establishing and foreclosing any lien created pursuant to the provisions of paragraph 5 of subsection G of this section, unless the real estate which is alleged to have been unlawfully owned or held, is disposed of prior to the commencement of the action.

  • a.The petition in such case shall set forth:
    • (1)a description of the real estate which is alleged to have been unlawfully owned or held;
    • (2)the names, as defendants, of the corporation and all persons alleged to be unlawfully holding the real estate;
    • (3)if the establishment and foreclosure of a lien upon such real estate is sought in the action, the names as defendants, of all persons claiming real estate, including all tenants and persons in actual possession thereof; and
    • (4)the facts and circumstances in consequence of which it is alleged that such real estate is owned or held in violation of the provisions of this section.
  • b.The filing of such petition, and all other procedures relating thereto, in all respects shall be governed by and subject to the same laws as in other civil actions.
  • c.If the state recovers a judgment against such corporation in such action, the judgment shall include and be entered for:
    • (1)the amount of the penalties for which the corporation is found liable pursuant to the provisions of this section;
    • (2)interest on such penalties at the rate of ten percent (10%) per annum from the date such penalties become due and receivable pursuant to the written notice provided for in paragraph 1 of this subsection;
    • (3)a collection fee of twenty-five percent (25%) of such penalties recovered, which fee shall not be less than One Hundred Dollars ($100.00);
    • (4)the entire costs of the action; and
    • (5)if the establishment and foreclosure of a lien upon the real estate is prayed for in the petition, a decree establishing such lien upon such real estate and an order of foreclosure.
  • d.Upon the judgment becoming final, an execution shall issue for the collection thereof.

Added by Laws 1986, c. 292, § 20, eff. Nov. 1, 1986.


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