N.D. Cent. Code § 10-06.1-24

10-06.1-24. Enforcement - Penalty

1. a. The recorder shall mail or deliver a copy of every instrument filed or recorded,

within thirty days after the instrument is recorded, to the attorney general if the

instrument documents evidence of a lease agreement or purchase agreement

pursuant to subsection 6 or 7 or if the instrument conveys the title to farmland or

ranchland to a corporation or limited liability company.

b. The attorney general shall commence an action in the district court of the county

in which the substantial portion of farmland or ranchland used in violation of this

chapter is situated if the attorney general has reason to believe that any person is

violating this chapter. The attorney general shall file for record with the recorder of

each county in which any portion of the land is located a notice of the pendency

of the action.

c. If the court finds that the farmland or ranchland is being held in violation of this

chapter, or that a corporation or limited liability company is engaging in the

business of farming or ranching in violation of this chapter, the court shall enter

an order pursuant to the court's findings of fact and conclusions of law. The

attorney general shall file the order for record with the recorder of each county in

which any portion of the land is located. Thereafter, the corporation or limited

liability company shall, within the time set by the court not to exceed one year

from the date of the court's final order, divest itself of the farmland or ranchland

owned or leased by it in violation of this chapter, and cease engaging in the

business of farming or ranching.

d. Except as otherwise provided in subsection 10, any corporation or limited liability

company that fails to comply with the court's order is subject to a civil penalty not

to exceed twenty-five thousand dollars and may be dissolved or terminated by the

secretary of state.

2. The divestment period is deemed to be a covenant running with the title to the

farmland or ranchland against any corporate or limited liability company grantee,

corporate or limited liability company successor, or corporation or limited liability

company assignee of the corporation or limited liability company not authorized to

engage in the business of farming or ranching under this chapter.

3. Any farmland or ranchland not divested within the divestment period prescribed must

be sold at public sale in the manner prescribed by law for the foreclosure of real estate

mortgage by action. In addition, any prospective or threatened violation may be

enjoined by an action brought by the attorney general in the manner provided by law,

including enjoining the corporation or limited liability company from completing

performance on the remainder of any leasehold which is in violation of this chapter.

4. Subject to the divestiture requirements of subsections 5, 6, and 7, a corporation or

limited liability company may acquire farmland or ranchland as security for

indebtedness, by process of law in the collection of debts, or by any procedure for the

enforcement of a lien or claim thereon, whether created by mortgage or otherwise.

5. Unless retention of the farmland or ranchland is permitted under subsection 6 or 7, all

farmland or ranchland acquired as security for indebtedness, in the collection of debts,

or by the enforcement of a lien or claim shall be disposed of within three years after

acquiring ownership, if the acquisition would otherwise violate this chapter.

6. The disposition requirement does not apply to a corporation or limited liability company

that has acquired title to the farmland or ranchland through the process of foreclosure

of a mortgage, or a deed from a mortgagor instead of a foreclosure, if, by the

expiration of one month after what is or what would have been the redemption period

of the mortgage if the mortgage had been foreclosed, that corporation or limited
ent does not apply to a corporation or limited liability company

that has acquired title to the farmland or ranchland through the process of foreclosure

of a mortgage, or a deed from a mortgagor instead of a foreclosure, if, by the

expiration of one month after what is or what would have been the redemption period

of the mortgage if the mortgage had been foreclosed, that corporation or limited

liability company leases to the prior mortgagor from whom it was acquired, with an

option to purchase, and if documents evidencing the lease agreement have been filed

with the recorder of each county in which the land is located. A copy of a notice of

lease is sufficient evidence. The exemption in this subsection applies for only five

years and then only if the property has been appraised in accordance with

subsection 8. The annual lease payments required of the tenant may not exceed

seven percent of the appraised value.

7. The disposition requirement does not apply to a corporation or limited liability company

that has acquired title to the farmland or ranchland through the process of foreclosure

of a mortgage, or a deed from the mortgagor instead of foreclosure, if, by the

expiration of one month after what is or what would have been the redemption period

of the mortgage if the mortgage had been foreclosed, that corporation or limited

liability company contracts for the sale of the land to the prior mortgagor from whom it

was acquired, and if documents evidencing the purchase agreement have been filed

with the recorder of each county in which the land is located. A copy of a notice of the

contract for deed is sufficient evidence. An exemption under this subsection is valid

only if an appraisal has been made in accordance with subsection 8, and if it is valid,

the exemption is unlimited in duration. The sale price may not exceed the price

determined by the appraisers.

8. If an appraisal is required, the appraisal must be made by three independent

appraisers, one selected by the corporation or limited liability company, one selected

by the prior mortgagor, and the third selected by the first two appraisers.

9. If a corporation or limited liability company holds farmland or ranchland pending

divestiture, and the holding is not otherwise regulated under this section, the land must

be leased to persons actually engaged in the business of farming or ranching and a

disposal may not be to a corporation or limited liability company unless ownership by

that corporation or limited liability company is authorized under this chapter.

10. The civil penalty for a violation of section 10-06.1-10 may not exceed one hundred

thousand dollars.

11. Except as provided in subsection 10, any corporation or limited liability company

continuing to violate this chapter is subject to a civil penalty not to exceed twenty-five

thousand dollars and may be dissolved or terminated by the attorney general in

accordance with the laws of this state.