12 U.S.C. § 2219a

Right of first refusal

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(a) General rule

Agricultural real estate that is acquired by an institution of the System as a result of a loan foreclosure or a voluntary conveyance by a borrower (hereinafter in this section referred to as the “previous owner”) who, as determined by the institution, does not have the financial resources to avoid foreclosure (hereinafter in this section referred to as “acquired real estate”) shall be subject to the right of first refusal of the previous owner to repurchase or lease the property, as provided in this section.

(b) Application of right of first refusal to sale of property(1) Election to sell and notificationWithin 15 days after an institution of the System first elects to sell acquired real estate, or any portion of such real estate, the institution shall notify the previous owner by certified mail of the owner’s right—(A) to purchase the property at the appraised fair market value of the property, as established by an accredited appraiser; or(B) to offer to purchase the property at a price less than the appraised value.(2) Eligibility to purchase

To be eligible to purchase the property under paragraph (1), the previous owner must, within 30 days after receiving the notice required by such paragraph, submit an offer to purchase the property.

(3) Mandatory sale

An institution of the System receiving an offer from the previous owner to purchase the property at the appraised value shall, within 15 days after the receipt of such offer, accept such offer and sell the property to the previous owner.

(4) Permissive sale

An institution of the System receiving an offer from the previous owner to purchase the property at a price less than the appraised value may accept such offer and sell the property to the previous owner. Notice shall be provided to the previous owner of the acceptance or rejection of such offer within 15 days after the receipt of such offer.

(5) Rejection of offer of previous owner(A) Duties of institutionAn institution of the System that rejects an offer from the previous owner to purchase the property at a price less than the appraised value may not sell the property to any other person—(i) at a price equal to, or less than, that offered by the previous owner; or(ii) on different terms and conditions than those that were extended to the previous owner,without first affording the previous owner an opportunity to purchase the property at such price or under such terms and conditions.(B) Notice

Notice of the opportunity in subparagraph (A) shall be provided to the previous owner by certified mail, and the previous owner shall have 15 days in which to submit an offer to purchase the property at such price or under such terms and conditions.

(c) Application of right of first refusal to leasing of property(1) Election to lease and notificationWithin 15 days after an institution of the System first elects to lease acquired real estate, or any portion of such real estate, the institution shall notify the previous owner by certified mail of the owner’s right—(A) to lease the property at a rate equivalent to the appraised rental value of the property, as established by an accredited appraiser; or(B) to offer to lease the property at a rate that is less than the appraised rental value of the property.(2) Eligibility to lease

To be eligible to lease the property under paragraph (1), the previous owner must, within 15 days after receiving the notice required by such paragraph, submit an offer to lease the property.

(3) Mandatory leaseAn institution of the System receiving an offer from the previous owner to lease the property at a rate equivalent to the appraised rental value of the property shall, within 15 days after the receipt of such offer, accept such offer and lease the property to the previous owner unless the institution determines that the previous owner—(A) does not have the resources available to conduct a successful farming or ranching operation; or(B) cannot meet all of the payments, terms, and conditions of such lease.(4) Permissive lease

An institution of the System receiving an offer from the previous owner to lease the property at a rate that is less than the appraised rental value of the property may accept such offer and lease the property to the previous owner.

(5) Notice to previous owner

An institution of the System receiving an offer from the previous owner to lease the property at a rate less than the appraised rental value of the property shall notify the previous owner of its acceptance or rejection of the offer within 15 days after the receipt of such offer.

(6) Rejection of offer of previous owner(A) Duties of institutionAn institution of the System rejecting an offer from the previous owner to lease the property at a rate less than the appraised rental value of the property may not lease the property to any other person—(i) at a rate equal to or less than that offered by the previous owner; or(ii) on different terms and conditions than those that were extended to the previous owner,without first affording the previous owner an opportunity to lease the property at such rate or under such terms and conditions.(B) Notice

Notice of the opportunity described in subparagraph (A) shall be given to the previous owner by certified mail, and the previous owner shall have 15 days after the receipt of such notice in which to agree to lease the property at such rate or under such terms and conditions.

(d) Public offerings(1) Notification of previous owner

If an institution of the System elects to sell or lease acquired property or a portion thereof through a public auction, competitive bidding process, or other similar public offering, the institution shall notify the previous owner, by certified mail, of the availability of the property. Such notice shall contain the minimum amount, if any, required to qualify a bid as acceptable to the institution and any terms and conditions to which such sale or lease will be subject.

(2) Priority

If two or more qualified bids in the same amount are received by the institution under paragraph (1), such bids are the highest received, and one of the qualified bids is offered by the previous owner, the institution shall accept the offer by the previous owner.

(3) Nondiscrimination

No institution of the System may discriminate against a previous owner in any public auction, competitive bidding process, or other similar public offering of property acquired by the institution from such person.

(e) Term or condition

For the purposes of this section, financing by a System institution shall not be considered to be a term or condition of a sale of acquired real estate.

(f) Financing

Notwithstanding any other provision of this section, a System institution shall not be required to provide financing to the previous owner in connection with the sale of acquired real estate.

(g) Mailing of notice

Notwithstanding any other provision of this section, each certified mail notice requirement in this section shall be fully satisfied by mailing one certified mail notice to the last known address of the previous owner.

(h) State laws

The rights provided in this section shall not diminish any such right of first refusal under the law of the State in which the property is located.

(i) Applicability

This section shall not apply to a bank for cooperatives.

(Pub. L. 92–181, title IV, § 4.36, as added Pub. L. 99–205, title III, § 306, Dec. 23, 1985, 99 Stat. 1709; amended Pub. L. 100–233, title I, § 108, Jan. 6, 1988, 101 Stat. 1582; Pub. L. 100–399, title I, § 104, Aug. 17, 1988, 102 Stat. 990.)Editorial NotesAmendments

1988—Pub. L. 100–233 amended section generally. Prior to amendment, section read as follows: “No institution of the Farm Credit System shall sell any real property that previously served as security for a loan in a tract larger than a normal family size farm in the vicinity of the property for less than the amount it can receive from the Capital Corporation.”

Subsec. (b)(2). Pub. L. 100–399, § 104(a), substituted “30” for “15”.

Subsec. (b)(3). Pub. L. 100–399, § 104(b), substituted “15” for “30”.

Subsec. (g). Pub. L. 100–399, § 104(c), substituted “previous owner” for “former borrower”.

Statutory Notes and Related SubsidiariesEffective Date of 1988 Amendment

Amendment by Pub. L. 100–399 effective as if enacted immediately after enactment of Pub. L. 100–233, which was approved Jan. 6, 1988, see section 1001(a) of Pub. L. 100–399, set out as a note under section 2002 of this title.

Effective Date

Section effective thirty days after Dec. 23, 1985, see section 401 of Pub. L. 99–205, set out as an Effective Date of 1985 Amendment note under section 2001 of this title.

Notes of Decisions

Cited in 36 cases, 1988–2015 · leading case: Farm Credit Bank of St. Paul v. Halverson (In Re Solberg), 125 B.R. 1010 (Bankr. D. Minn. 1991).

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Farm Credit Bank of St. Paul v. Halverson (In Re Solberg), 125 B.R. 1010 (Bankr. D. Minn. 1991). · cites it 12× “12 U.S.C. § 2219a: Federal-Law Right of First Refusal.”

Cupples Bros., Cupples Farms, a P'ship, Gracie M. Cupples, Horace E. Cupples, Jr. v. Fed. Land Bank of St. Louis, 951 F.2d 883 (8th Cir. 1992). · cites it 9× “They also assert that they should be allowed to reacquire their farmlands under their right of first refusal, 12 U.S.C. § 2219a(b) (1988), or by participating in the public offering pursuant to 12 U.”

Wiener v. Farm Credit Bank of St. Louis, 759 F. Supp. 510 (E.D. Ark. 1991). · cites it 9× “Eastern and Garrott argued in the Rule 60(b)(5) Motion that the right of first refusal contained in the Agricultural Credit Act of 1987, 12 U.S.C. § 2219a (Act), required that they be given relief from the prior judgment of this Court.”

Ranch v. Farm Credit Bank of Omaha, 472 N.W.2d 704 (Neb. 1991). · cites it 3× “Pursuantto 12 U.S.C. § 2219a (1988) of the Agricultural Credit Act of 1987 (Act), FCB sent Logan notice of its right of first *816 refusal along with a purchase agreement containing the terms which FCB would accept.”

Jarrett Ranches, Inc. v. Farm Credit Banks of Omaha (In Re Jarrett Ranches, Inc.), 107 B.R. 969 (Bankr. D.S.D. 1989). · cites it 7× “All claimed violations fall under § 108 of the Act, codified at 12 U.S.C. § 2219a. FCBO answered Jarretts’ complaint on May 1, 1989.”

Bennett v. Genoa Ag Ctr., Inc. (In Re Bennett), 154 B.R. 126 (Bankr. N.D.N.Y. 1992). · cites it 5× “Plaintiffs seek actual and punitive damages against Farm Credit for denying Debtor the right of redemption at the time of the foreclosure sale, in violation of 12 U.S.C. § 2219a. *131 9. Plaintiffs seek treble damages against Genoa, the Sharps and the Van Benschotens for various…”

Knepper v. Monticello State Bank, 450 N.W.2d 833 (Iowa 1990). · cites it 2× “1989) (considering 12 U.S.C. § 2219a). See also Colo.Rev.Stat.”

Agribank FCB v. Cross Timbers Ranch, Inc., 919 S.W.2d 263 (Mo. Ct. App. 1996). · cites it 3× “Cross Timbers argues that under the provisions of 12 U.S.C.A. § 2219a[a], it was entitled to a first right of refusal to buy back the foreclosed property within 15 days after the lender first elects to sell the acquired real estate to a third party.”

Crowell v. Delafield Farmers Mut. Fire Ins. Co., 463 N.W.2d 737 (Minn. 1990). · cites it 3× “6 (1990) and 12 U.S.C. § 2219a (1989). It was the usual practice of the bank to permit a farmer to remain on the farm if there was no third-party offer to purchase or rent.”

Allison v. Agribank, Fcb, 949 S.W.2d 182 (Mo. Ct. App. 1997). · cites it 2× “Under the terms of that plan, AgriBank was authorized to foreclose. Once AgriBank undertook foreclosure, on May 21, 1992, the foregoing new Chapter 12 proceeding was initiated in the Western District of Missouri.”

Leckband v. Naylor, 715 F. Supp. 1451 (D. Minnesota 1988). · cites it 2× “Plaintiff has moved for a declaration of his right of first refusal under 12 U.S.C. § 2219a(b) prior to public sale of his former farmland and for a permanent injunction against defendant Federal Land Bank of St.”

Rural Water Sys. 1 v. City of Sioux Ctr., 29 F. Supp. 2d 975 (N.D. Iowa 1998). · cites it 2× “The provision of the 1989 ACA in question in Payne was 12 U.S.C. § 2219a, which provides that where agricultural real estate is acquired by a federal institution as a result of a loan foreclosure, the land is subject to a right of first refusal of the previous owner to…”

Show all 36 citing cases →

— 12 U.S.C. § 2219a(a) — 9 cases

Allison v. Agribank, Fcb, 949 S.W.2d 182 (Mo. Ct. App. 1997). “Under the terms of that plan, AgriBank was authorized to foreclose. Once AgriBank undertook foreclosure, on May 21, 1992, the foregoing new Chapter 12 proceeding was initiated in the Western District of Missouri.”

Agribank FCB v. Cross Timbers Ranch, Inc., 919 S.W.2d 263 (Mo. Ct. App. 1996). “Cross Timbers argues that under the provisions of 12 U.S.C.A. § 2219a[a], it was entitled to a first right of refusal to buy back the foreclosed property within 15 days after the lender first elects to sell the acquired real estate to a third party.”

Wiener v. E. Arkansas Planting Co., 975 F.2d 1350 (8th Cir. 1992).

Wagner v. Pennwest Farm Credit, ACA, 109 F.3d 909 (3rd Cir. 1997).

Payne v. Fed. Land Bank of Columbia, 916 F.2d 179 (4th Cir. 1990).

— 12 U.S.C. § 2219a(b) — 6 cases

Farm Credit Bank of St. Paul v. Halverson (In Re Solberg), 125 B.R. 1010 (Bankr. D. Minn. 1991). “12 U.S.C. § 2219a: Federal-Law Right of First Refusal.”

Cupples Bros., Cupples Farms, a P'ship, Gracie M. Cupples, Horace E. Cupples, Jr. v. Fed. Land Bank of St. Louis, 951 F.2d 883 (8th Cir. 1992). “They also assert that they should be allowed to reacquire their farmlands under their right of first refusal, 12 U.S.C. § 2219a(b) (1988), or by participating in the public offering pursuant to 12 U.”

Leckband v. Naylor, 715 F. Supp. 1451 (D. Minnesota 1988). “Plaintiff has moved for a declaration of his right of first refusal under 12 U.S.C. § 2219a(b) prior to public sale of his former farmland and for a permanent injunction against defendant Federal Land Bank of St.”

Jarrett Ranches, Inc. v. Farm Credit Banks of Omaha (In Re Jarrett Ranches, Inc.), 107 B.R. 969 (Bankr. D.S.D. 1989). “All claimed violations fall under § 108 of the Act, codified at 12 U.S.C. § 2219a. FCBO answered Jarretts’ complaint on May 1, 1989.”

Jarrett Ranches, Inc. v. Farm Credit Banks of Omaha (In re Jarrett Ranches, Inc.), 107 B.R. 963 (Bankr. D.S.D. 1989).

— 12 U.S.C. § 2219a(b)(1) — 1 case

— 12 U.S.C. § 2219a(b)(2) — 1 case

Farm Credit Bank of St. Paul v. Halverson (In Re Solberg), 125 B.R. 1010 (Bankr. D. Minn. 1991). “12 U.S.C. § 2219a: Federal-Law Right of First Refusal.”

— 12 U.S.C. § 2219a(b)(3) — 2 cases

Wagner v. Pennwest Farm Credit, ACA, 109 F.3d 909 (3rd Cir. 1997).

Meredith v. Fed. Land Bank of St. Louis, 690 F. Supp. 786 (E.D. Ark. 1988).

— 12 U.S.C. § 2219a(b)(4) — 1 case

Wagner v. Pennwest Farm Credit, ACA, 109 F.3d 909 (3rd Cir. 1997).

— 12 U.S.C. § 2219a(b)(5) — 2 cases

— 12 U.S.C. § 2219a(b)(l) — 3 cases

K Lazy K Ranch, Inc. v. Farm Credit Bank of Omaha, 127 B.R. 1014 (D.S.D. 1991).

Wagner v. Pennwest Farm Credit, ACA, 109 F.3d 909 (3rd Cir. 1997).

Linrud v. Anderson, 487 N.W.2d 613 (N.D. 1992).

— 12 U.S.C. § 2219a(b)(l)(A) — 1 case

K Lazy K Ranch, Inc. v. Farm Credit Bank of Omaha, 127 B.R. 1014 (D.S.D. 1991).

— 12 U.S.C. § 2219a(c) — 1 case

Ranch v. Farm Credit Bank of Omaha, 472 N.W.2d 704 (Neb. 1991). “Pursuantto 12 U.S.C. § 2219a (1988) of the Agricultural Credit Act of 1987 (Act), FCB sent Logan notice of its right of first *816 refusal along with a purchase agreement containing the terms which FCB would accept.”

— 12 U.S.C. § 2219a(c)(3)(A) — 1 case

Meredith v. Fed. Land Bank of St. Louis, 690 F. Supp. 786 (E.D. Ark. 1988).

— 12 U.S.C. § 2219a(c)(6) — 1 case

Meredith v. Fed. Land Bank of St. Louis, 690 F. Supp. 786 (E.D. Ark. 1988).

— 12 U.S.C. § 2219a(c)(l) — 3 cases

Griffin v. Fed. Land Bank of Wichita, 708 F. Supp. 313 (D. Kan. 1989).

Fed. Land Bank of Wichita v. B.A.V., Inc., 809 P.2d 1110 (Colo. Ct. App. 1991).

Meredith v. Fed. Land Bank of St. Louis, 690 F. Supp. 786 (E.D. Ark. 1988).

— 12 U.S.C. § 2219a(d) — 6 cases

Farm Credit Bank of St. Paul v. Halverson (In Re Solberg), 125 B.R. 1010 (Bankr. D. Minn. 1991). “12 U.S.C. § 2219a: Federal-Law Right of First Refusal.”

Meredith v. Fed. Land Bank of St. Louis, 690 F. Supp. 786 (E.D. Ark. 1988).

Farm Credit Bank of Spokane v. Coleman (In Re Coleman), 125 B.R. 621 (Bankr. D. Mont. 1991).

— 12 U.S.C. § 2219a(d)(1) — 1 case

Meredith v. Fed. Land Bank of St. Louis, 690 F. Supp. 786 (E.D. Ark. 1988).

— 12 U.S.C. § 2219a(d)(2) — 1 case

Meredith v. Fed. Land Bank of St. Louis, 690 F. Supp. 786 (E.D. Ark. 1988).

— 12 U.S.C. § 2219a(d)(l) — 2 cases

Wagner v. Pennwest Farm Credit, ACA, 109 F.3d 909 (3rd Cir. 1997).

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