SF 2189 (LSB 5181SV (1) 83)

SENATE FILE 2189

BY  COMMITTEE ON JUDICIARY

(SUCCESSOR TO SSB 3095)

A BILL FOR

An Act relating to judgment liens on homesteads.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 624.23, subsection 2, Code 2009, is amended to read as follows:
   2.  a.  Judgment liens described in subsection 1 do not remain a lien upon attach to real estate of the defendant, platted occupied as a homestead pursuant to section 561.4, chapter 561, except as provided in section 561.21 or if the real estate claimed as a homestead exceeds the limitations prescribed in sections 561.1 through 561.3.
   b.  A claim of lien against real estate claimed as a homestead is barred unless execution is levied within thirty days of the time the defendant, or the defendant’s agent, or a person with an interest in the real estate has served written demand on the owner of the judgment. The demand shall state that the lien and all benefits derived from the lien as to the real estate platted as alleged to be or to have been a homestead shall be forfeited unless the owner of the judgment levies execution against that real estate within thirty days from the date of service of the demand.  The demand shall contain an affidavit setting forth facts indicating why the judgment is not believed to be a lien against the real estate. A warranty of title by a former occupying homeowner in a conveyance for value constitutes a claim of exemption against all judgments against the current homeowner or the current homeowner’s spouse not specifically exempted in the conveyance. Written demand shall be served in any manner authorized for service of original notice under the Iowa rules of civil procedure or in a manner provided in section 654.4A, subsections 1 through 3. A copy of the written demand and proof of service of the written demand shall be recorded filed in the office of the county recorder of the county where the real estate platted as a homestead is located court file of the case in which the judgment giving rise to the alleged lien was entered.
   c.  A party serving a written demand under this subsection may obtain an immediate court order releasing the claimed lien by posting with the clerk of court a cash bond in an amount of at least one hundred twenty-five percent of the outstanding balance owed on the judgment. A copy of the court order shall be served along with a written demand under this subsection. Thereafter, any execution on the judgment shall be against the bond, subject to all claims and defenses which the moving party had against the execution against the real estate, including but not limited to a lack of equity in the property to support the lien in its proper priority. The bond shall be released by the clerk of court upon demand of its principal or surety if no execution is ordered on the judgment within thirty days of completion of service of the written demand under this subsection.
EXPLANATION
   This bill specifies that a judgment lien does not attach to real estate claimed as a homestead except as provided in Code section 561.21 (certain prior debts, certain debts created by written contract, certain home improvement debts, and if there is no survivor or issue, certain debts to which the homestead might have been subject to if it had never been held as a homestead) or if the real estate claimed as a homestead exceeds the physical limitations prescribed in Code sections 561.1 through 561.3.
   The bill provides that a warranty of title by a former occupying homeowner in a conveyance for value constitutes a claim of exemption against all judgments against the current homeowner or the current homeowner’s spouse not specifically exempted in the conveyance.
   The bill provides that a claim of lien against a homestead is barred unless execution is levied within 30 days of the time the defendant, the defendant’s agent, or a person with an interest in the real estate has served written demand on the owner of the judgment accompanied by an affidavit setting forth facts indicating why the judgment is not believed to be a lien against the real estate. The written demand shall be served in any manner authorized for service of original notice under the Iowa rules of civil procedure or in a manner provided in Code section 654.4A, subsections 1 through 3 (service of process procedures relating to in rem relief).
   The bill provides that a party serving a written demand under the bill may obtain an immediate court order releasing the claimed lien by posting a cash bond in an amount of at least 125 percent of the outstanding balance owed on the judgment. Thereafter, any execution on the judgment shall be against the bond, subject to all claims and defenses which the moving party had against the execution against the real estate, including but not limited to a lack of equity in the property to support the lien in its proper priority. The bill requires the bond to be released by the clerk of court upon demand of the bond’s principal or surety if no execution is ordered on the judgment within 30 days of completion of service of the written demand under the bill.