Introduced Version, House Bill 1066

Introduced Version

HOUSE BILL No. 1066

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DIGEST OF INTRODUCED BILL

Citations Affected: IC 32-29; IC 32-30; IC 36-1-6-1.5; IC 36-7.

Synopsis: Abandoned housing. Requires a person who purchases property at a foreclosure sale to record the deed within 60 days. With respect to mortgaged real property that the mortgagor surrenders in writing to the court or to a mortgagee, provides that 30 days after the date on which the mortgagor surrenders real property the mortgagee is responsible for ensuring that the property does not violate local ordinances or nuisance, unsafe building, and vacant and abandoned structures statutes. Specifies that the mortgagee is personally liable for ensuring that the property complies with local ordinances or nuisance, unsafe building, and vacant and abandoned structures statutes, and provides that the mortgagee may be liable for additional civil penalties as determined by the appropriate local legislative body. Requires a mortgagee to whom property has been surrendered to record the mortgagee's interest in the property not later than 60 days after receipt. Provides that a mortgagee has the authority to enter onto real property in order to carry out its responsibilities.

Effective: July 1, 2011.

January 5, 2011, read first time and referred to Committee on Judiciary.

Introduced

First Regular Session 117th General Assembly (2011)

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HOUSE BILL No. 1066

A BILL FOR AN ACT to amend the Indiana Code concerning property and to make an appropriation.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 32-29-7-10; (11)IN1066.1.1. -->     SECTION 1. IC 32-29-7-10, AS AMENDED BY P.L.105-2009, SECTION 17, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 10. (a) Immediately after a foreclosure sale under this chapter, the sheriff shall:
        (1) execute and deliver to the purchaser; and
        (2) except as provided in subsection (b), record with the recorder of the county in which the premises are located;
a deed of conveyance for the premises, which must be valid to convey all the right, title, and interest held or claimed by all of the parties to the action and all persons claiming under them. The sheriff shall file a return with the clerk of the court.
    (b) The sheriff is not required to record the deed of conveyance for the premises under subsection (a)(2) if the mortgage involved in the foreclosure action resulting in the foreclosure sale under this chapter was insured by the United States Department of Housing and Urban Development.
     (c) This section does not apply if the mortgage involved in the

foreclosure action resulting in the foreclosure sale under this chapter was insured by the United States Department of Housing and Urban Development. Not later than sixty (60) days after the date on which a purchaser receives a deed of conveyance for the premises, the purchaser shall record the deed with the county recorder.
(d) A purchaser who fails to record a deed under subsection (c) may be liable for additional civil penalties if the county legislative body has established a civil penalty for failure to comply with subsection (c). A civil penalty collected under this subsection shall be deposited in the county general fund and shall be appropriated to the county treasurer for purposes relating to abandoned property.

SOURCE: IC 32-29-12; (11)IN1066.1.2. -->     SECTION 2. IC 32-29-12 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]:
     Chapter 12. Effect of Surrender in Bankruptcy
    Sec. 1. (a) This chapter applies only to mortgaged real property that the mortgagor surrenders in writing to the court or to a mortgagee as a part of or while in bankruptcy proceedings.
    (b) This chapter does not apply to mortgaged real property that the mortgagor surrenders to the court or to a mortgagee as a part of or while in bankruptcy proceedings while the real property is occupied by the mortgagor or a tenant.
    Sec. 2. (a) Thirty (30) days after the date on which a mortgagor surrenders real property to which this chapter applies, the mortgagee of the property is responsible for:
        (1) abating a nuisance under IC 32-30-6;
        (2) abating an indecent nuisance under IC 32-30-7;
        (3) abating a drug nuisance under IC 32-30-8;
        (4) bringing the property into compliance with an ordinance under IC 36-1-6;
        (5) complying with IC 36-7-9; and
        (6) abating unsafe conditions under IC 36-7-36.
    (b) If the real property has one (1) or more mortgagees, each mortgagee is jointly and severally liable for abatement expenses.
    (c) Liability for abatement expenses under this chapter is personal liability.
    (d) A mortgagee has the authority to enter onto real property described in this chapter to carry out its responsibilities under this section.
     Sec. 3. A mortgagee shall properly record the mortgagee's

interest in the property with the county recorder not later than sixty (60) days after the property is surrendered under this chapter.
    Sec. 4. (a) A mortgagee who fails to carry out the mortgagee's responsibilities under this chapter may be liable for additional civil penalties as determined by the:
        (1) legislative body of the unit having responsibility for enforcing the items described in section 2 of this chapter, for noncompliance with an item described in section 2 of this chapter; or
        (2) county legislative body for failure to record a deed as required by section 3 of this chapter. A civil penalty collected under this subdivision shall be deposited in the county general fund and shall be appropriated to the county treasurer for purposes relating to abandoned property.
     (b) A mortgagee is personally liable for a civil penalty imposed under this section.

SOURCE: IC 32-29-13; (11)IN1066.1.3. -->     SECTION 3. IC 32-29-13 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]:
     Chapter 13. Surrender of Property to a Mortgagee
    Sec. 1. (a) This chapter applies only to mortgaged real property that the mortgagor surrenders to a mortgagee in accordance with section 2 of this chapter.
    (b) This chapter does not apply to mortgaged real property:
        (1) that the mortgagor surrenders to the court or to a mortgagee as a part of or while in bankruptcy proceedings; or
        (2) while the real property is occupied by the mortgagor or a tenant.
     Sec. 2. A mortgagor may surrender mortgaged property to a mortgagor as follows:
        (1) The mortgagor transmits to the mortgagee by certified mail, return receipt requested:
            (A) written notice of the mortgagor's intent to surrender the mortgaged property; and
            (B) a valid quitclaim deed transferring the mortgaged property to the mortgagee.
         (2) The mortgagor transmits a copy of the notice of intent to surrender the property and a copy of the quitclaim deed to the county auditor.
    Sec. 3. (a) Thirty (30) days after the date on which a mortgagor surrenders real property to which this chapter applies in

accordance with section 2 of this chapter, the mortgagee of the property is responsible for:
        (1) abating a nuisance under IC 32-30-6;
        (2) abating an indecent nuisance under IC 32-30-7;
        (3) abating a drug nuisance under IC 32-30-8;
        (4) bringing the property into compliance with an ordinance under IC 36-1-6;
        (5) complying with IC 36-7-9; and
        (6) abating unsafe conditions under IC 36-7-36.
    (b) If the real property has one (1) or more mortgagees, each mortgagee is jointly and severally liable for abatement expenses.
    (c) Liability for abatement expenses under this chapter is personal liability.
    (d) A mortgagee has the authority to enter onto real property described in this chapter to carry out its responsibilities under this section.
    Sec. 4. A mortgagee shall properly record the quitclaim deed received under section 2 of this chapter with the county recorder not later than sixty (60) days after receipt of the quitclaim deed.
    Sec. 5. (a) A mortgagee who fails to carry out the mortgagee's responsibilities under this chapter may be liable for additional civil penalties as determined by the:
        (1) legislative body of the unit having responsibility for enforcing the items described in section 3 of this chapter, for noncompliance with an item described in section 3 of this chapter; or
        (2) county legislative body for failure to record a deed as required by section 4 of this chapter. A civil penalty collected under this subdivision shall be deposited in the county general fund and shall be appropriated to the county treasurer for purposes relating to abandoned property.
    (b) A mortgagee is personally liable for a civil penalty imposed under this section.

SOURCE: IC 32-30-8-5; (11)IN1066.1.5. -->     SECTION 5. IC 32-30-8-5 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 5. (a) A person initiating an action under this chapter to abate a nuisance existing on a property shall, at least forty-five (45) days before filing the action, provide notice to:
        (1) each tenant of the property; and
        (2) the owner of record, including a mortgagee responsible for the property under IC 32-29-12-2 or IC 32-29-13-3;
that a nuisance exists on the property.
    (b) The notice required under this section must specify the following:
        (1) The date and time the nuisance was first discovered.
        (2) The location on the property where the nuisance is allegedly occurring.
    (c) The notice must be:
        (1) hand delivered; or
        (2) sent by certified mail;
to each tenant and the owner of record.
    (d) A person initiating an action to abate a nuisance under this chapter shall:
        (1) when notice is provided under this section, produce all evidence in the person's possession or control of the existence of the nuisance; and
        (2) if requested by the owner, assist the owner in the production of witness and physical evidence.

SOURCE: IC 36-7-9-2; (11)IN1066.1.7. -->     SECTION 7. IC 36-7-9-2, AS AMENDED BY P.L.73-2010, SECTION 10, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 2. As used in this chapter:
    "Community organization" means a citizen's group, neighborhood association, neighborhood development corporation, or similar organization that:
        (1) has specific geographic boundaries defined in its bylaws or articles of incorporation and contains at least forty (40) households within those boundaries;
        (2) is a nonprofit corporation that is representative of at least twenty-five (25) households or twenty percent (20%) of the

households in the community, whichever is less;
        (3) is operated primarily for the promotion of social welfare and general neighborhood improvement and enhancement;
        (4) has been incorporated for at least two (2) years; and
        (5) is exempt from taxation under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code.
    "Continuous enforcement order" means an order that:
        (1) is issued for compliance or abatement and that remains in full force and effect on a property without further requirements to seek additional:
            (A) compliance and abatement authority; or
            (B) orders for the same or similar violations;
        (2) authorizes specific ongoing compliance and enforcement activities if a property requires reinspection or additional periodic abatement;
        (3) can be enforced, including assessment of fees and costs, without the need for additional notice or hearing; and
        (4) authorizes the enforcement authority to assess and collect ongoing costs for continuous enforcement order activities from any party that is subject to the enforcement authority's order.
    "Department" refers to the executive department authorized by ordinance to administer this chapter. In a consolidated city, this department is the department of metropolitan development, subject to IC 36-3-4-23.
    "Enforcement authority" refers to the chief administrative officer of the department, except in a consolidated city. In a consolidated city, the division of development services is the enforcement authority, subject to IC 36-3-4-23.
    "Hearing authority" refers to a person or persons designated as such by the executive of a city or county, or by the legislative body of a town. However, in a consolidated city, the director of the department or a person designated by the director is the hearing authority. An employee of the enforcement authority may not be designated as the hearing authority.
    "Known or recorded fee interest, life estate interest, or equitable interest of a contract purchaser" means any fee interest, life estate interest, or equitable interest of a contract purchaser held by a person whose identity and address may be determined from:
        (1) an instrument recorded in the recorder's office of the county where the unsafe premises is located;
        (2) written information or actual knowledge received by the department (or, in the case of a consolidated city, the enforcement

authority); or
        (3) a review of department (or, in the case of a consolidated city, the enforcement authority) records that is sufficient to identify information that is reasonably ascertainable.
    "Known or recorded substantial property interest" means any right in real property, including a fee interest, a life estate interest, a future interest, a mortgage interest, a lien as evidenced by a certificate of sale issued under IC 6-1.1-24, or an equitable interest of a contract purchaser, that:
        (1) may be affected in a substantial way by actions authorized by this chapter; and
        (2) is held by a person whose identity and address may be determined from:
            (A) an instrument recorded in:
                (i) the recorder's office of the county where the unsafe premises is located; or
                (ii) the office of the county auditor of the county where the unsafe premises are located in the case of a lien evidenced by a certificate of sale issued under IC 6-1.1-24;
            (B) written information or actual knowledge received by the department (or, in the case of a consolidated city, the enforcement authority); or
            (C) a review of department (or, in the case of a consolidated city, the enforcement authority) records that is sufficient to identify information that is reasonably ascertainable.
     "Owner" includes a mortgagee responsible for the property under IC 32-29-12-2 or IC 32-29-13-3.
    "Substantial property interest" means any right in real property that may be affected in a substantial way by actions authorized by this chapter, including a fee interest, a life estate interest, a future interest, a mortgage interest, or an equitable interest of a contract purchaser.

SOURCE: IC 36-7-36-1; (11)IN1066.1.8. -->     SECTION 8. IC 36-7-36-1, AS ADDED BY P.L.88-2009, SECTION 15, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 1. As used in this chapter, "abandoned structure" means any of the following:
        (1) Commercial real property or a vacant structure on commercial real property that is used or was previously used for industrial or commercial purposes, and:
            (A) that the owner of the property or structure has declared in writing to be abandoned; or
            (B) for which the owner of the property or structure has been given a written order by an enforcement authority to

rehabilitate or demolish, and the owner:
                (i) has not applied for a permit to rehabilitate or demolish the property or structure; or
                (ii) applied for and was granted a permit, but rehabilitation or demolition work has not commenced on the property or structure within thirty (30) days after the date the permit was granted.
        (2) Real property that has not been used for a legal purpose for at least six (6) consecutive months and:
            (A) in the judgment of an enforcement authority, is in need of completion, rehabilitation, or repair, and completion, rehabilitation, or repair work has not taken place on the property for at least six (6) consecutive months;
            (B) on which at least one (1) installment of property taxes is delinquent; or
            (C) that has been declared a public nuisance by a hearing authority.
        (3) Real property that has been declared in writing to be abandoned by the owner, including an estate or a trust that possesses the property.
        (4) Vacant real property on which a municipal lien has remained unpaid for at least one (1) year.
         (5) Mortgaged real property that has been surrendered in bankruptcy as described in IC 32-29-12-1 and that is not occupied by the mortgagor or a tenant.