S.F. _____ Section 1. Section 657A.1, subsections 1 and 3, Code 2018, 1 are amended to read as follows: 2 1. “Abandoned” or “abandonment” means that a building has 3 remained is vacant and has been in violation of the housing 4 code or building code of the city in which the property is 5 located or the housing code or building code applicable in the 6 county in which the property is located if outside the limits 7 of a city for a period of six consecutive months . 8 3. “Building” means a building or structure , including a 9 mobile or manufactured home which has been converted to real 10 estate pursuant to section 435.26, located in a city or outside 11 the limits of a city in a county, which is used or intended 12 to be used for commercial or industrial purposes or which 13 is used or intended to be used for residential purposes and 14 includes a building or structure in which some floors may be 15 used for retail stores, shops, salesrooms, markets, or similar 16 commercial uses, or for offices, banks, civic administration 17 activities, professional services, or similar business or civic 18 uses, and other floors are used, designed, or intended to be 19 used for residential purposes. 20 Sec. 2. Section 657A.1, Code 2018, is amended by adding the 21 following new subsection: 22 NEW SUBSECTION . 8. “Responsible building official” or 23 “official” means the person appointed by the city or, if the 24 building is outside the limits of a city, the county to enforce 25 its building codes and regulations in general or to enforce 26 this chapter in particular. 27 Sec. 3. NEW SECTION . 657A.1A Preliminary inspection of 28 building. 29 1. No sooner than one hundred thirty-five days after a 30 property has become vacant, a person, other than a governmental 31 entity, may request that the responsible building official 32 inspect the property and certify that a property is both 33 abandoned and in need of abatement. The responsible building 34 official may also initiate an inspection on the official’s own 35 -1- LSB 5481XC (7) 87 js/rj 1/ 11

S.F. _____ initiative. 1 2. If the responsible building official finds from an 2 exterior view of the property, in addition to any other 3 credible information that the official may have, that there is 4 reasonable cause to believe that the property is abandoned and 5 in need of abatement, the official shall schedule a date and 6 time for an inspection of the property by the official. The 7 person requesting the inspection shall provide written notice 8 of the scheduled inspection to the owner and all interested 9 persons at least twenty days before the inspection. The 10 official may enter the property for an inspection, along with 11 the person serving notice and any interested persons, if the 12 owner is not present for the inspection. The notice must 13 state the date, time, and place of the inspection and state 14 that unless the owner appears at the inspection to allow the 15 responsible building official access to the interior of the 16 property, the official, accompanied by the person serving 17 notice and any interested persons appearing for the inspection, 18 may enter the property to determine whether the property is 19 abandoned and in need of abatement and, if so, to estimate 20 the costs of abatement. Upon request, the inspection may be 21 rescheduled as needed. 22 3. The responsible building official’s findings shall 23 be in writing with copies provided to the person requesting 24 the inspection, the owner, and all interested parties. The 25 government entity employing the responsible building official 26 may establish and charge a fee to cover the reasonable costs 27 of the inspection, which shall be added to costs in an action 28 under this chapter. 29 4. Evidence that financial obligations in respect to a 30 building, including but not limited to payments of a mortgage, 31 bills, or property taxes, are currently met does not rebut a 32 finding of abandonment if the property is substantially in need 33 of abatement in an action filed under section 657A.2. 34 Sec. 4. Section 657A.2, Code 2018, is amended by striking 35 -2- LSB 5481XC (7) 87 js/rj 2/ 11

S.F. _____ the section and inserting in lieu thereof the following: 1 657A.2 Petition. 2 1. No sooner than the latter of thirty days after provision 3 of the responsible building official’s findings under section 4 657A.1A and six months after a building has become abandoned, 5 a petition for abatement under this chapter may be filed in 6 the district court of the county in which the property is 7 located, by the city in which the property is located, by the 8 county if the property is located outside the limits of a city, 9 by a neighboring landowner, or by a duly organized nonprofit 10 corporation which has as one of its goals the improvement of 11 housing conditions in the county or city in which the property 12 in question is located. The petition shall not demand a 13 personal judgment against any party, but shall concern only 14 the interests in the property. A petition for abatement filed 15 under this chapter shall include the legal description of the 16 real property upon which the nuisance or dangerous or unsafe 17 condition is located unless the nuisance or dangerous or unsafe 18 condition is not situated on or confined to a parcel of real 19 property or is portable or capable of being removed from the 20 real property. Service shall be made on all interested persons 21 by personal service or by both certified mail and first class 22 mail, or if service cannot be made by either method, by posting 23 the notice in a conspicuous place on the building and by 24 publication. Service may also be made as provided in section 25 654.4A. 26 2. When entering a default judgment, the court shall 27 determine any issues at law, including issues relating to 28 title, raised by plaintiff or by a party in interest who has 29 filed a motion or answer. 30 3. In any evidentiary hearing or motion in a proceeding 31 under this chapter, the written findings of the responsible 32 building official relating to the condition of the building and 33 other matters within the scope of this chapter, if provided 34 to all persons not in default at least ten days before the 35 -3- LSB 5481XC (7) 87 js/rj 3/ 11

S.F. _____ hearing, shall be accepted as evidence without prejudice to the 1 right of any party to require the personal testimony of the 2 official at the hearing. 3 4. In a proceeding under this chapter, if the court 4 determines the building is not abandoned or is not in a 5 dangerous or unsafe condition, the court shall dismiss the 6 petition and may require the petitioner to pay an interested 7 party’s reasonable attorney fees actually incurred, unless the 8 interested party did not appear for an inspection held under 9 section 657A.1A. 10 Sec. 5. Section 657A.3, Code 2018, is amended to read as 11 follows: 12 657A.3 Interested persons —— opportunity to abate public 13 nuisance. 14 1. Before appointing a receiver to perform work or to 15 furnish material to abate a public nuisance under this chapter , 16 the court shall conduct a hearing at which the court shall 17 offer mortgagees of record, lienholders of record, or other 18 known interested persons in the order of priority of interest 19 in title, the opportunity to undertake the work and to furnish 20 the materials necessary to abate the public nuisance. The 21 establish a date before which interested persons may file with 22 the court shall require the person selected to demonstrate the 23 written proof of intent and ability to undertake promptly the 24 work required and to post security for the performance of the 25 work. If no such written proof is filed by that date, the court 26 may appoint a receiver pursuant to subsection 3. 27 2. All amounts expended by the person toward abating the 28 public nuisance are a lien on the property if the expenditures 29 were approved in advance by the judge and if the person desires 30 the lien. The Unless an interested person has a contract with 31 the owner providing for a different interest rate, the lien 32 shall bear interest at the rate provided for judgments pursuant 33 to section 535.3 , and shall be payable upon terms approved 34 by the judge. If a certified copy of the court order that 35 -4- LSB 5481XC (7) 87 js/rj 4/ 11

S.F. _____ approved the expenses and the terms of payment for the lien, 1 and a description of the property in question are filed for 2 record within thirty days of the date of issuance of the order 3 in the office of the county recorder of the county in which 4 the property is located, the lien has the same priority as the 5 mortgage of a receiver as provided in section 657A.7 . 6 2. 3. If the court determines by the date established 7 in subsection 1 or at the a hearing conducted pursuant 8 to subsection 1 , on the sufficiency of a timely filed 9 rehabilitation plan that no interested person can undertake the 10 work and furnish the materials required to abate the public 11 nuisance, or if the court determines at any time after the 12 hearing that an interested person who is undertaking corrective 13 work pursuant to this section cannot or will not proceed, or 14 has not proceeded with due diligence, the court may appoint a 15 receiver to take possession and control of the property. The 16 receiver shall be appointed in the manner provided in section 17 657A.4 . 18 4. If the building is a historic building or is located in 19 a designated historic district, the court shall give preference 20 to an economically feasible rehabilitation plan, other than to 21 a rehabilitation plan proposed in good faith by the owner, that 22 preserves the historical nature of the building. 23 5. Unless a receiver’s mortgage provides for periodic 24 payments, a notice, in lieu of the notice provided for in 25 section 654.2D, shall also be served by ordinary or electronic 26 mail informing all interested persons of the date certain for 27 the maturity of the mortgage note, or the event triggering 28 maturity of the mortgage note, that, on maturity, the 29 receiver’s mortgage loan will be payable in full and that the 30 mortgagee may then commence foreclosure without further notice. 31 A notice under section 654.4B shall also be served similarly 32 on the owner of record of the property. The mortgagee shall 33 not commence foreclosure of the mortgage until sixty days have 34 passed since the service of notices under this subsection. 35 -5- LSB 5481XC (7) 87 js/rj 5/ 11

S.F. _____ Sec. 6. Section 657A.4, Code 2018, is amended to read as 1 follows: 2 657A.4 Appointment of receiver. 3 After conducting If after expiration of a date established 4 in section 657A.3, subsection 1, or a hearing pursuant to 5 section 657A.3 , the court may appoint a receiver to take 6 possession and control of the property in question. A 7 person shall not be appointed as a receiver unless the person 8 has first provided the court with a viable financial and 9 construction plan for the rehabilitation of the property in 10 question and has demonstrated the capacity and expertise to 11 perform the required work in a satisfactory manner. The 12 appointed receiver may be a financial institution that 13 possesses an interest of record in the property, a nonprofit 14 corporation that is duly organized and exists for the primary 15 purpose of improving housing conditions in the county or city 16 in which the property in question is located, or any person 17 deemed qualified by the court. No part of the net earnings of a 18 nonprofit corporation serving as a receiver under this section 19 shall benefit a private shareholder or individual. Membership 20 on the board of trustees of a nonprofit corporation does not 21 constitute the holding of a public office or employment and is 22 not an interest, either direct or indirect, in a contract or 23 expenditure of money by a city or county. No member of a board 24 of trustees of a nonprofit corporation appointed as receiver 25 is disqualified from holding public office or employment, nor 26 is a member required to forfeit public office or employment by 27 reason of the membership on the board of trustees. 28 Sec. 7. Section 657A.6, subsection 9, Code 2018, is amended 29 to read as follows: 30 9. Issue notes and secure the notes by mortgages bearing 31 interest at the rate provided for judgments pursuant to section 32 535.3 , and terms and conditions as approved by the court. The 33 court may provide for a higher interest rate if the receiver 34 has established to the satisfaction of the court that the 35 -6- LSB 5481XC (7) 87 js/rj 6/ 11

S.F. _____ receiver has sought financing from persons and institutions 1 willing to lend money for rehabilitation of property and that 2 the terms proposed by the receiver are reasonable and the best 3 reasonably available. When transferred by the receiver in 4 return for valuable consideration in money, material, labor, 5 or services, the notes issued by the receiver are freely 6 transferable. If the receiver contemplates a transfer of 7 its note and mortgage, with or without recourse, at the time 8 the receiver seeks court authorization of the contemplated 9 transfer, the receiver shall disclose to the mortgagee the 10 contemplated transfer in the application for approval of the 11 mortgage. 12 Sec. 8. Section 657A.7, Code 2018, is amended by adding the 13 following new subsection: 14 NEW SUBSECTION . 3. If the mortgagee of the receiver’s 15 mortgage begins foreclosure procedures pursuant to chapter 655A 16 and an interested party desires to pay off the mortgage loan, 17 the interested party shall also pay the mortgagee’s reasonable 18 costs and attorney fees. 19 Sec. 9. Section 657A.8, Code 2018, is amended to read as 20 follows: 21 657A.8 Assessment of costs. 22 The court may assess the costs and expenses set out in 23 section 657A.6, subsection 2 , and may approve receiver’s fees 24 to the extent that the fees are not covered by the income 25 from the property. The receiver shall pay the costs and 26 reasonable attorney fees of a plaintiff who requested an 27 inspection under section 657A.1A unless an interested party 28 not in default who appeared for the inspection justifiably 29 objects to the fees and costs in whole or in part. The court 30 shall determine the merits of such an objection. If the court 31 finds that a neighboring landowner has pursued an action under 32 this chapter in bad faith, the court may assess attorney fees 33 against the neighboring landowner and may bar the neighboring 34 landowner from filing future actions under this chapter. If a 35 -7- LSB 5481XC (7) 87 js/rj 7/ 11

S.F. _____ foreclosure of the receiver’s mortgage pursuant to chapter 655A 1 is contemplated, the court may retain jurisdiction to determine 2 the amount of attorney fees payable under 657A.7, subsection 3. 3 Sec. 10. Section 657A.10A, subsection 1, paragraph a, Code 4 2018, is amended to read as follows: 5 a. In lieu of the procedures in sections 657A.2 657A.1A 6 through 657A.10 and 657A.10B , a city in which an abandoned 7 building is located may petition the court to enter judgment 8 awarding title to the abandoned property to the city. A 9 petition filed under this section shall include the legal 10 description of the abandoned property. If more than one 11 abandoned building is located on a parcel of real estate, the 12 city may combine the actions into one petition. The owner of 13 the building and grounds, mortgagees of record, lienholders 14 of record, or other known persons who hold an interest in the 15 property shall be named as respondents on the petition. 16 Sec. 11. NEW SECTION . 657A.10B Applicability. 17 The provisions of sections 657A.1A through 657A.10 shall 18 only apply to cities and counties that have, by ordinance, 19 provided that the provisions shall apply. 20 Sec. 12. CODE EDITOR DIRECTIVE. 21 1. The Code editor is directed to renumber section 657A.10B, 22 as enacted in this Act, as section 657A.10A, and to renumber 23 section 657A.10A as section 657A.10B. 24 2. The Code editor shall correct internal references in the 25 Code and in any enacted legislation as necessary due to the 26 enactment of this section. 27 EXPLANATION 28 The inclusion of this explanation does not constitute agreement with 29 the explanation’s substance by the members of the general assembly. 30 This bill changes certain procedures relating to abandoned 31 structures and abatement. 32 The current definition of “abandoned” or “abandonment” 33 requires a property to have been in violation for at least six 34 months. The bill removes the time element from the definition 35 -8- LSB 5481XC (7) 87 js/rj 8/ 11

S.F. _____ and states that evidence of financial obligations in respect 1 to the building does not rebut a finding of abandonment if the 2 property substantially needs abatement. The bill requires a 3 property to remain vacant for 135 days before a person may 4 request the responsible building official to inspect a building 5 to determine whether it is abandoned. 6 The term “building” currently includes buildings and 7 structures only. The bill adds mobile and manufactured homes 8 that have become real property pursuant to Code section 435.26. 9 The bill adds to Code section 657A.1 the term “responsible 10 building official”. 11 Current law relies on the current definition of “abandoned”, 12 which requires that a building remain vacant or in violation 13 of a housing or building code for a period of six months, 14 to start the clock for when a person may file a petition 15 for abatement and includes a hearing to determine whether 16 the building is abandoned or in an unsafe and dangerous 17 condition and whether the building is a public nuisance. A 18 petitioner must make service on the owner in one of three 19 methods. The bill requires a property to remain vacant for 20 at least 135 days before a person may file a petition for 21 abatement. The bill does not allow for personal judgments 22 against any party, but requires the petition to be solely 23 against the interested persons’ interest in the property. The 24 bill includes additional methods of service. The bill removes 25 the application for an injunction and the subsequent hearing. 26 The bill allows the responsible building official to provide 27 findings for evidence in an evidentiary hearing or motion in a 28 proceeding under Code chapter 657A under certain circumstances. 29 Current law allows only an owner to collect reasonable 30 attorney fees actually incurred from the petitioner if the 31 court finds that the building in question is not abandoned 32 or in an unsafe or dangerous condition. The bill allows 33 the court to require the petitioner to pay an interested 34 party’s reasonable attorney fees actually incurred unless the 35 -9- LSB 5481XC (7) 87 js/rj 9/ 11

S.F. _____ interested party did not appear for an inspection pursuant to 1 Code section 657A.1A. 2 Current law requires the court to conduct a hearing at 3 which the court shall offer mortgagees of record, lienholders 4 of record, or other known interested persons in the order of 5 priority of interest in title the opportunity to abate a public 6 nuisance. The bill removes this hearing and creates a new 7 process for interested persons to demonstrate their intent and 8 ability to abate the nuisance and act as the receiver. If 9 the building is a historic building or located in a historic 10 district, the court shall give preference to an economically 11 feasible rehabilitation plan, other than a plan proposed in 12 good faith by the owner, that preserves the historical nature 13 of the building. 14 Current law allows a court to empower a receiver to issue 15 notes and secure the notes by mortgage bearing interest at 16 the rate provided for judgments pursuant to Code section 17 535.3 and terms and conditions approved by the court. The 18 bill allows the court to provide for a higher interest rate 19 than that provided in Code section 535.3 if it meets certain 20 conditions. If the receiver contemplates a transfer of the 21 note and mortgage at the time that the receiver seeks court 22 authorization of the contemplated transfer, the receiver shall 23 disclose to the mortgagee the contemplated transfer in the 24 receiver’s application for approval of the mortgage. 25 The bill makes the interested party responsible for paying 26 the mortgagee’s reasonable costs and attorney fees when the 27 interested party pays off the receiver’s mortgage loan. 28 Current law does not require the receiver to pay the 29 reasonable attorney fees for a plaintiff who requested an 30 inspection under Code section 567A.1A. The bill makes the 31 receiver responsible for the plaintiff’s reasonable attorney 32 fees in most situations, but creates scenarios that could make 33 a neighboring landowner who pursued the action in bad faith 34 liable for attorney fees. The court may bar that landowner 35 -10- LSB 5481XC (7) 87 js/rj 10/ 11

S.F. _____ from making further claims under Code chapter 657A. 1 The bill provides that Code sections 657A.1A through 657A.10 2 apply to only those cities and counties that choose to apply 3 these Code sections by adoption through ordinance. 4 The bill directs the Code editor to renumber new Code section 5 657A.10B as new Code section 657A.10A and to renumber current 6 Code section 657A.10A as new Code section 657A.10B and to 7 correct internal references as necessary. 8 -11- LSB 5481XC (7) 87 js/rj 11/ 11