MORTGAGES AND DEEDS OF TRUST TO SECURE LOANS TO INDIANS

Sec.

121.61 Approval of mortgages and deeds of trust.

AUTHORITY: The provisions of this Part 121 issued under R.S. 161; 5 U.S.C. 22. Interpret or apply sec. 7, 32 Stat. 275, 34 Stat. 1018, sec. 1, 35 Stat. 444, sec. 1, 2, 36 Stat. 855, as amended, 856, as amended, sec. 17, 40 Stat. 579, 62 Stat. 236, sec. 2, 40 Stat. 606, 69 Stat. 666; 25 U.S.C. 379, 405, 404, 372, 373, 483, 355, unless otherwise noted.

CROSS REFERENCES: For further regulations pertaining to the sale of irrigable lands, see Parts 129, 128 and § 211.4 of this chapter. For Indian money regulations, see Parts 104, 101, 107, 105, and 102 of this chapter. For regulations pertaining to the determination of heirs and approval of wills, see Part 15 and §§ 11.30-11.32C of this chapter.

PATENTS IN FEE

§ 121.1 Application for patent in fee.

Any Indian 21 years of age or over may apply for a patent in fee for land, the title to which is held in trust for said Indian by the United States. The application shall be made on a form approved by the Commissioner of Indain Affairs and shall be completed and filed with the Superintendent or other officer in charge of the Indian agency or other local facility having administrative jurisdiction over the land.

[22 F.R. 10559, Dec. 24, 1957]

§ 121.2 Issuance of patents in fee.

(a) The Secretary of the Interior may, in his discretion, and pursuant to the Acts of February 8, 1887, as amended (24 Stat. 388, as amended; 25 U.S.C. 349); June 25, 1910, as amended (36 Stat. 855, as amended; 25 U.S.C. 372); and May 14, 1948 (62 Stat. 236; 25 U.S.C. 483), and pursuant to other authorizing Acts, issue patents in fee to Indians applying therefor in accordance with § 121.1. A patent in fee will be issued pursuant to this paragraph if it is determined that the applicant is competent and capable of managing his or her own affairs. At the time of the issuance of a patent in fee, an inventory of the estate covered thereby shall be delivered to the patentee. If an application is denied, the applicant shall be so notified in writing.

(b) The Secretary will, pursuant to the act of March 1, 1907 (34 Stat. 1015, 1034), issue a patent in fee to any adult mixed-blood Indian owning land within the White Earth Reservation in the State

of Minnesota upon application being made by such Indian, and without regard to the applicant's competency and ability to manage his or her own affairs.

(c) Whenever the Secretary determines that land, or any interest therein, held in trust for an Indian by the United States, has been acquired through inheritance or devise by (1) a non-Indian or (2) an alien Indian or an Indian who has become an alien subsequent to the time of such acquisition, the Secretary may issue a patent in fee for the land or interest therein to such non-Indian or alien Indian, without regard to such person's competency and ability to manage his or her own affairs, and regardless of whether such person has applied for a patent in fee.

[22 F.R. 10559, Dec. 24, 1957, as amended at 24 F.R. 7100, Sept. 2, 1959]

§ 121.2a Information regarding status of applications for patents in fee.

The status of applications by Indians for patents in fee shall be disclosed to employees of the Department whose duties require that such information be disclosed to them and to the applicant, or his attorney, upon request. This information will also be made available to members of Congress who present requests therefor from the applicant. Such information will be made available to all other persons, upon request, fifteen (15) days after the fee patent has been issued by the Bureau of Land Management, or after the application has been rejected and the applicant notified, if such be the case.

[25 F.R. 7264, July 30, 1960]

CERTIFICATES OF COMPETENCY

SOURCE: §§ 121.3 to 121.7 appear at 22 F.R. 10559, Dec. 24, 1957.

§ 121.3 Applications for certificates of

competency.

Applications on Form 5-105, modified for certificates of competency authorized by section 1 of the act of June 25, 1910 (36 Stat. 855, 48 Stat. 647; 25 U.S.C. 372), shall be filed with the Indian superintendent having jurisdiction over the land from which the allottee or heirs seek to have all restrictions removed. When the land is not located within the territorial limits of an Indian reservation the allottee or heirs may petition the most convenient superintendent or other officer in charge of an Indian agency or Indian tribe or such other public officer of the

United States as may be designated by the Secretary of the Interior, who shall take like action as if the lands were within the territorial limits of an Indian reservation.

§ 121.4 Superintendent's report on certificates of competency.

Reports on application for certificates of competency should be on Form 5-110f and should be accompanied by the recommendation of the tribal council. The issuance of a certificate of competency is discretionary with the Secretary of the Interior. Such a certificate will not be issued unless it can be affirmatively shown that its issuance will not affect unfavorably the consolidation and use by the Indians of restricted Indian lands. The provisions of the act of June 25, 1910, apply only to Indians or their heirs to whom a patent in fee containing restrictions on alienation has been issued. § 121.5 Certificates of competency to certain Osage adults.

Applications for certificates of competency by adult members of the Osage Tribe of one-half or more Indian blood shall be on the form1 prescribed by the Secretary of the Interior. Upon the finding by the Secretary or by his duly authorized representative that an applicant who has filed an application on the prescribed form with the superintendent of the Osage Agency is capable of managing his or her own affairs and transacting his or her own business, a certificate of competency may be granted removing the restrictions against alienation of all restricted property, except Osage headright interests, of the applicant.

CROSS REFERENCE: For regulations pertaining to the issuance of certificates of competency to adult Osage Indians of less than one-half Indian blood, see Part 123 of this chapter.

§ 121.7 Issuance of certificates of competency.

When the Secretary of the Interior finds that the applicant is capable of transacting his or her own affairs and transacting his or her own business, the restrictions may be removed and a certificate of competency issued, to be effective 30 days from the date of its issuance. The issuance of a certificate of competency is discretionary with the Secretary of the Interior. Such a certificate will not be issued unless it be affirmatively shown that its issuance will not affect unfavorably the consolidation and use by the Indians of restricted Indian lands.

PARTITIONS OF INHERITED ALLOTMENTS

§ 121.8 Applications for partitions.

In case the trust land of a deceased allottee is susceptible of partition among the heirs, the Secretary of the Interior may make such partition and issue new patents to the several heirs for the portions selected by them. If the allotment is held under a restricted fee title (as distinguished from a trust title) partition may be made by approved deeds among the heirs. Petitions for partition should be made upon Form 5-1107.

(Sec. 1, 39 Stat. 127; 25 U.S.C. 378) [22 F.R. 10559, Dec. 24, 1957]

CROSS REFERENCE: For regulations pertaining to the determination of heirs and approval of wills, see Part 15 and §§ 11.3011.32C of this chapter.

SALES AND EXCHANGES OF INDIVIDUALLY OWNED TRUST OR RESTRICTED LAND, EXCLUSIVE OF FIVE CIVILIZED TRIBES LAND SOURCE: §§ 121.9 to 121.22 appear at 24 F.R. 7100, Sept. 2, 1959.

§ 121.9 Authority.

(a) Pursuant to the Acts of May 27, 1902 (32 Stat. 275; 25 U.S.C. 379); March 1, 1907 (34 Stat. 1018; 25 U.S.C. 405); May 29, 1908 (35 Stat. 444; 25 U.S.C. 404); and May 14, 1948 (62 Stat. 236; 25 U.S.C. 483), and pursuant to other authorizing Acts, the following classes of land may be sold or exchanged by the Indian owner(s) with the approval of the Secretary of the Interior:

(1) Allotted land, and devised and inherited interests therein;

(2) Land acquired by purchase, exchange or gift, and devised and inherited interests therein, held under an instrument of conveyance which recites either

that title is in the United States in trust for the Indian or that the land shall not be sold or alienated without the consent or approval of the Superintendent, the Commissioner of Indian Affairs, the Secretary of the Interior, or other official of the Federal Government.

(b) Pursuant to the Act of June 25, 1910 (36 Stat. 855; 25 U.S.C. 372), as amended, in certain circumstances the Secretary of the Interior or his duly authorized representative may sell interests in trust allotments acquired by Indians through inheritance or devise. § 121.10 Statutory prohibitions.

Trust or restricted Indian lands, or any interest therein, may not be conveyed without the approval of the Secretary of the Interior or his authorized representative (see 25 U.S.C. 348, in adddition to Acts cited above). Moreover, inducing an Indian to execute any instrument purporting to convey any trust or restricted land or interest therein, or the offering of any such instrument for record, is prohibited and criminal penalties may be incurred. (See 25 U.S.C. 202.)

Petitions for the sale of trust or restricted land shall be filed on approved forms with the Superintendent or other officer in charge of the Indian Agency or other local facility having administrative jurisdiction over the land. Sales will be authorized only if, after careful examination of the circumstances in each case, a sale appears to be clearly justified in the light of the long-range best interests of the owner(s). Written notice of the approval of petitions for sale of land shall be given to the tribe, occupying the reservation where the land is located, a sufficient time in advance of public advertising to reasonably enable the tribal authorities to consider the possibility of tribal interest in the land being sold. Such notice need not be given where a tribe has, by appropriate resolution, expressed a lack of interest in acquiring land on the reservation. § 121.12 Appraisal.

Prior to making or approving a sale, exchange, or gift of trust or restricted land, an appraisal shall be made indicating the fair market value of such land. If the highest bid received at an advertised sale is less than the appraised value, the bid may be accepted with the consent

Upon approval of an application for an advertised sale, notice of the sale will be published not less than 30 days prior to the date fixed for the sale, unless a shorter period is authorized. Notice of sale will state the terms, conditions, and method of sale; and will include the date, hour, and place of sale; description of the tract or tracts; a list of all reservations to which title will be subject; where and how bids shall be submitted; and a statement warning all bidders against violation of the provisions of 18 U.S.C. 1860, prohibiting unlawful combination or intimidation of bidders. With the consent of the owner(s), the notice may afford to the tribe, to members of such tribe, or to any reasonably defined class of Indians, a right to meet the high bid. § 121.14

Bids.

Advertised sales may be made under sealed bid or under sealed bid followed by an oral auction. The notice of sale (§ 121.13) shall state the method of bidding. Sealed bids may be submitted either by mail or personally by the principal or an agent, and in either event, will be considered only if received by the officer in charge prior to the hour fixed for the sale. Sealed bids must be enclosed in a sealed envelope, and must be

accompanied by a certified check,

cashier's check, money order, or United States Treasury Check, payable to the Bureau of Indian Affairs, for not less than 10 percent of the amount of the bid. The sealed envelope must be marked as prescribed in the notice of sale. The sealed envelopes will be publicly opened by the officer in charge only at the time fixed for the sale. The bids will be announced and will be appropriately recorded. The advertisement will provide for an oral auction to follow the opening of sealed bids in all cases in which a preference right to meet the high bid has not been granted to a tribe seeking such a right, provided the tribe is not the high bidder in such cases. The auction will be held provided one or more acceptable sealed bids are received. The auction shall be limited to bidders who, in their sealed bids offer 75 percent or more of the appraised

value of the land. The provision for holding an oral auction is based on a policy which recognizes that in many instances a tribe has a valid interest in acquiring lands of individual Indians which are offered for sale and which is designed to provide an additional opportunity to Indian tribes to acquire the lands. In furtherance of this policy, it will not be required that the sealed bid of the tribe amount to 75 percent or more of the appraised value of the land, in order for the tribe to be eligible to participate in the oral auction. At the conclusion of the auction, the highest bidder shall be required to increase his § 121.15 Action at close of bidding. deposit to not less than 10 percent of the amount of his bid.

The officer in charge of the sale shall publicly announce the highest bid, and the deposit submitted by the unsuccessful bidders shall be returned immediately to them. The deposit submitted by the successful bidder shall be held in special deposits. The awarding of bid shall be made by the Area Director, who shall appropriately notify the successful bidder and require the deposit of the remainder of the purchase price within 30 days from the date of notification. Upon a showing of cause, the Area Director may, in his discretion, extend the time for payment of the balance due. The issuance of patent or delivery of deed to the purchaser will not be authorized until the balance has been paid. If the remainder of the bid is not paid within the time allowed, the bid will be rejected and the bidder's deposit will be forfeited to the use of the owner(s) of the land. § 121.16 Rejection of bids; disapproval of sale.

The officer in charge of the sale shall have the right to reject any and all bids prior to award. The Secretary of the Interior reserves the right to reject any bid at any time prior to the issuance of patent or approval of deed, when he shall have determined such action to be in the best interests of the Indian owner(s). § 121.17 Bidding by employees.

Except as authorized by the provisions of § 251.5 of this chapter, no person employed in Indian affairs shall directly or indirectly bid, or make or prepare any bid, or assist any bidder in preparing his bid. Sales between Indians, either of whom is an employee of the United States

Government, are governed by the provisions of § 251.5 of this chapter (see 25 U.S.C. 68 and 441).

§ 121.18 Negotiated sales.

(a) The following types of conveyances may be negotiated: (1) A sale to another Indian, an Indian tribe, or a conveyance to a member of the Indian's immediate family pursuant to the provisions of paragraph (b) of this section; (2) the United States or an agency thereof, or a state or local government or agency thereof, or such other sale as may be for a public purpose; (3) a sale to a non-Indian when the Secretary determines that it is impractical to advertise; (4) an exchange; (5) temporary easements for rights of way not to exceed fifty years. Except as provided in paragraphs (b) and (c) of this section, the consideration for a negotiated sale shall be not less than the appraised value of the land. The consideration for an exchange shall be either land, or a combination of land and money or other thing of value, the fair market value of which is not less than the appraised value of the trust or restricted land.

(b) An Indian owner of trust or restricted land may, with the approval of the Secretary, convey land to a member of his or her immediate family for a consideration less than that prescribed in paragraph (a) of this section, or for no consideration. For purposes of this section, immediate family is defined as the Indian's spouse, brothers and sisters, lineal ancestors of Indian blood, and lineal descendants.

(c) Indian owners of trust or restricted land may, with the approval of the Secretary, convey land to any Indian who is a co-owner of the land for a consideration less than that prescribed in paragraph (a) of this section, or for no consideration. If more than one of the Indian co-owners wish to buy the land, and if the owners agree, all such. coowners interested will submit sealed bids. With the consent of the owners, the award will be made to the highest such bidder.

§ 121.19 Deferred payment sales.

When the Indian owner and purchaser desire, a sale may be made or approved on the deferred payment plan. The terms of the sale will be incorporated in a Memorandum of Sale which shall constitute a contract for delivery of title upon payment in full of the amount of

the agreed consideration. The deed executed by the grantor or grantors will be held by the Superintendent and will be delivered only upon full compliance with the terms of the sale. If conveyance of title is to be made by fee patent, request therefor will be made only upon full compliance with the terms of the sale. If the purchaser, whether Indian or non-Indian, is to take title in a nontrust and unrestricted status, the purchaser shall pay not less than 25 percent of the purchase price in advance, and shall execute notes on Form 5-110g for the balance payable in three equal payments on or before 1, 2, and 3 years after date. If the purchaser is an individual Indian or Indian tribe, and if the purchaser is to take title in a trust or restricted status, the purchaser shall pay not less than 10 percent of the purchase price in advance; terms for the payment of the remaining installments are within the discretion of the Secretary of the Interior. If the purchaser on any deferred payment plan makes default in the first or subsequent payments, all payments, including interest, previously made will be forfeited to the Indian owner.

§ 121.20

Cost of conveyances; payment.

In all cases involving the sale of restricted allotted Indian lands, either on a cash basis or on deferred payments, the purchasers will be required to deposit with the Superintendent, in addition to the consideration for the land, the sum of $22.50, such amount to be paid when the purchaser is notified that he is the successful bidder. Such fees should not be included in checks covering payment for the land, out collected separately and deposited to the credit of the United States as general fund receipts, except when the expenses of the work are paid from Indian tribal funds, in which event they shall be credited to such funds. This fee is collected for the purpose of paying, at least in part, for the work incident to the sale as required by the Act of February 14, 1920, as amended by the Act of March 1, 1933 (47 Stat. 1417; 25 U.S.C. 413). The fee may be reduced to a lesser amount than $22.50 or to a nominal amount if the circumstances justify such reduction in the discretion of the Secretary of the Interior. When the purchaser is an Indian tribe which bears all or any part of the expenses of the