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(1) The department shall compile sales information from RTCs. The department shall review sales evidenced by an RTC to determine whether a sale was a valid, arm's-length transaction. For the purposes of this rule, "valid, arm's-length transaction" means a sale of real estate not affected by unreasonable or unusual personal influence or control, as defined in literature prepared by the international association of assessing officers.

(2) Unless there is convincing evidence to the contrary, the following sales transactions shall be considered non-arm's-length transactions:

(a) a sale of agricultural or timber land;

(b) a sale in which the purchaser or seller is the United States of America, a state, a county, a municipality, or an instrumentality, agency, or political subdivision thereof, or a public utility;

(c) a sale that is recorded to confirm, correct, modify, or supplement a previously recorded instrument;

(d) a sale pursuant to a court decree;

(e) a sale pursuant to a merger, consolidation, or reorganization of a corporation, partnership, or other business entity;

(f) a sale between affiliated corporations or between shareholders and the corporation;

(g) a sale of a decedent's estate;

(h) a sale constituting a gift;

(i) a sale between a husband and wife or a parent and child or other family member with only nominal actual consideration;

(j) a sale transferring property to the same party or parties;

(k) a sale of delinquent taxes, sheriff's sale, bankruptcy sale, mortgage foreclosure, or premature liquidation of property;

(l) a sale made in contemplation of death;

(m) a sale of tax-exempt property; and

(n) royalty interest or an assignment of interest.

(3) The department shall consider the following sales in distressed markets if the following foreclosure related transactions comprise more than 20 percent of sales in a specific market area for model calibration and ratio studies, in accordance with the International Association of Assessing Officers (IAAO) standards:

(a) Real Estate Owned (REO) sales involving financial institutions as seller if:

(i) represented and marketed as an REO listing with a real estate listing service;

(ii) exposed for sale in the open market for a reasonable amount of time; and

(iii) verified as an REO sale.

(iv) the sales comprise more than 20 percent of sales in a specific market area; and

(v) changes in property characteristics are accounted for in model calibration and ratio studies.

(b) auction sales if:

(i) the auction was well advertised;

(ii) the auction was well attended;

(iii) the seller had a minimum bid or the right of refusal on all bids; and

(iv) the sales are not from absolute auctions that do not have a low bid clause or right of refusal and are advertised as such type of auctions.

(c) short sales if:

(i) represented and marketed as a short sale with a real estate listing service;

(ii) exposed for sale in the open market for a reasonable amount of time; and

(iii) verified as a short sale.

(4) The following sales will not be considered in distressed markets:

(a) vandalized property; and

(b) forced sales resulting from a judicial order, i.e., when the seller is either a sheriff, receiver, or other court officer.

(5) The department may verify sales information by submitting to the parties participating in a sale transaction the sale verification form. Completion of the sales verification form may be accomplished during on-site discussions with the buyer or seller, or through telephone conversation or written correspondence with the buyer or seller, or their representatives. Additionally, the department may secure information from the lending institution involved in the sale for purposes of verifying the terms and conditions of the sale

History: 15-1-201, MCA; IMP, 15-7-111, MCA; NEW, 1990 MAR p. 596, Eff. 3/30/90; AMD, 1993 MAR p. 3060, Eff. 12/24/93; AMD, 2002 MAR p. 3723, Eff. 12/27/02; AMD, 2011 MAR p. 2673, Eff. 12/9/11.

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