Senate File 93 - Reprinted SENATE FILE 93 BY LOFGREN (As Amended and Passed by the Senate March 19, 2019 ) A BILL FOR An Act relating to abandoned structures and abatement of public 1 nuisances. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 SF 93 (13) 88 ko/jh/jh
S.F. 93 Section 1. Section 631.1, Code 2019, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 10. The district court sitting in small 3 claims has concurrent jurisdiction for administrative warrant 4 applications pursuant to section 657A.1A, subsection 2. 5 Sec. 2. Section 655A.6, Code 2019, is amended to read as 6 follows: 7 655A.6 Rejection of notice. 8 1. If either the mortgagor, or successor in interest of 9 record including a contract purchaser, within thirty days of 10 service of the notice pursuant to section 655A.3 , files with 11 the recorder of the county where the mortgaged property is 12 located, a rejection of the notice reasonably identifying 13 the notice which is rejected together with proofs of service 14 required under section 655A.4 that the rejection has been 15 served on the mortgagee, the notice served upon the mortgagor 16 pursuant to section 655A.3 is of no force or effect. 17 2. Rejection of notice pursuant to subsection 1 shall not be 18 available to a mortgagor, or successor in interest of record 19 including a contract purchaser, of a mortgaged property that a 20 court of competent jurisdiction determined has been abandoned 21 pursuant to section 657A.2, on or after the date as determined 22 in section 657A.2, subsection 5. 23 Sec. 3. Section 657A.1, subsections 1 and 3, Code 2019, are 24 amended to read as follows: 25 1. “Abandoned” or “abandonment” means that a building has 26 remained is vacant , or is occupied only by trespassers, and has 27 been in violation of the housing code or building code of the 28 city in which the property is located or the housing code or 29 building code applicable in the county in which the property 30 is located if outside the limits of a city for a period of six 31 consecutive months . 32 3. “Building” means a building or structure , excluding a 33 mobile home, a modular home, and a manufactured home as defined 34 in section 435.1, unless the mobile home or manufactured 35 -1- SF 93 (13) 88 ko/jh/jh 1/ 11
S.F. 93 home has been converted to real estate pursuant to section 1 435.26, located in a city or outside the limits of a city in 2 a county, which is used or intended to be used for commercial 3 or industrial purposes or which is used or intended to be 4 used for residential purposes and includes a building or 5 structure in which some floors may be used for retail stores, 6 shops, salesrooms, markets, or similar commercial uses, or for 7 offices, banks, civic administration activities, professional 8 services, or similar business or civic uses, and other floors 9 are used, designed, or intended to be used for residential 10 purposes. 11 Sec. 4. Section 657A.1, Code 2019, is amended by adding the 12 following new subsection: 13 NEW SUBSECTION . 8. “Responsible building official” or 14 “official” means the person appointed by the city or, if the 15 building is outside the limits of a city, the county, to 16 enforce its building codes and regulations in general or to 17 enforce this chapter in particular. 18 Sec. 5. NEW SECTION . 657A.1A Preliminary inspection of 19 building. 20 1. No sooner than one hundred thirty-five days after a 21 property has become vacant, a person, other than a governmental 22 entity, may request that the responsible building official 23 inspect the property and certify that a property is both 24 abandoned and in need of abatement. The responsible building 25 official may also initiate an inspection on the official’s own 26 initiative at any time. 27 2. If the responsible building official finds from an 28 exterior view of the property, in addition to any other 29 credible information that the official may have, that there 30 is reasonable cause to believe that the property is abandoned 31 and in need of abatement, the official shall schedule a date 32 and time for an inspection of the property by the official. 33 The person requesting the inspection shall provide written 34 notice of the scheduled inspection by first class mail and 35 -2- SF 93 (13) 88 ko/jh/jh 2/ 11
S.F. 93 certified mail to the owner and all interested persons at 1 least twenty days before the inspection. The notice must 2 state the date, time, and place of the inspection and state 3 that unless the owner appears at the inspection to allow the 4 responsible building official access to the interior of the 5 property, the official, accompanied by the person serving 6 notice and any interested persons appearing for the inspection, 7 may enter the property to determine whether the property is 8 abandoned and in need of abatement and, if so, to estimate 9 the costs of abatement. The official may enter the property 10 for an inspection, along with the person serving notice and 11 any interested persons, if the owner is not present for the 12 inspection. Upon request, the inspection may be rescheduled 13 as needed. The responsible building official must obtain an 14 administrative search warrant pursuant to section 808.14 to 15 enter any building to conduct an inspection pursuant to this 16 section. 17 3. The responsible building official’s findings shall 18 be in writing with copies provided to the person requesting 19 the inspection, the owner, and all interested parties. The 20 governmental entity employing the responsible building official 21 may establish and charge a fee to cover the reasonable costs 22 of the inspection, which shall be added to costs in an action 23 under this chapter. 24 4. Evidence that financial obligations in respect to a 25 building, including but not limited to payments of a mortgage, 26 bills, or property taxes, are currently met does not rebut a 27 finding of abandonment if the property is substantially in need 28 of abatement in an action filed under section 657A.2. 29 Sec. 6. Section 657A.2, Code 2019, is amended by striking 30 the section and inserting in lieu thereof the following: 31 657A.2 Petition. 32 1. No sooner than the latter of thirty days after provision 33 of the responsible building official’s findings under section 34 657A.1A and six months after a building has become abandoned, 35 -3- SF 93 (13) 88 ko/jh/jh 3/ 11
S.F. 93 a petition for abatement under this chapter may be filed in 1 the district court of the county in which the property is 2 located by the city in which the property is located, by the 3 county if the property is located outside the limits of a city, 4 by a neighboring landowner, or by a duly organized nonprofit 5 corporation which has as one of its goals the improvement of 6 housing conditions in the county or city in which the property 7 in question is located. The petition shall not demand a 8 personal judgment against any party, but shall concern only 9 the interests in the property. A petition for abatement filed 10 under this chapter shall include the legal description of 11 the real property upon which the public nuisance is located 12 unless the public nuisance is not situated on or confined to 13 a parcel of real property, or is portable or capable of being 14 removed from the real property. Service shall be made on all 15 interested persons by personal service or, if personal service 16 cannot be made, by certified mail and first class mail to the 17 last known address of record of the interested person and by 18 posting the notice in a conspicuous place on the building, 19 or by publication. The last known address of record for the 20 property owner shall be the address of record with the county 21 treasurer of the county where the property is located. Service 22 may also be made as provided in section 654.4A. 23 2. If entering judgment, the court shall determine any 24 issues at law, including issues relating to title, raised by 25 the plaintiff or by a party in interest who has filed a motion 26 or answer. 27 3. In any evidentiary hearing or motion in a proceeding 28 under this chapter, the written findings of the responsible 29 building official relating to the condition of the building and 30 other matters within the scope of this chapter, if provided 31 at least ten days before the hearing to all persons not in 32 default, shall be accepted as evidence without prejudice to the 33 right of any party to require the personal testimony of the 34 responsible building official at the hearing. 35 -4- SF 93 (13) 88 ko/jh/jh 4/ 11
S.F. 93 4. If the court finds at a hearing pursuant to this section 1 that the building is abandoned or is a public nuisance, the 2 court may issue an injunction requiring the owner to correct 3 any conditions that make such building a public nuisance, or 4 issue another order that the court deems appropriate to address 5 the public nuisance. 6 5. If the court finds at a hearing pursuant to this 7 section that the building is abandoned, unless the court 8 order establishes otherwise, the property shall be deemed 9 continuously abandoned from the date the action is indexed 10 pursuant to section 617.10, subsection 1. 11 6. A property shall not be claimed as homestead pursuant to 12 chapter 561 on or after the date determined in subsection 5. 13 7. In a proceeding under this section, if the court 14 determines the building is not abandoned, the court shall 15 dismiss the petition and may require the petitioner to pay an 16 interested party’s reasonable attorney fees. An owner of the 17 property who failed to appear for an inspection pursuant to 18 section 657A.1A shall not be awarded attorney fees under this 19 section. 20 8. If a party to the action holds an interest in the 21 property as a nominee, a fiduciary, or another representative 22 capacity for a third party, or an underlying loan on the 23 property is guaranteed by a third party, the party to the 24 action may apply to the court for a stay of action, as it 25 affects the party’s interest, for a reasonable time to allow 26 the party to obtain the appropriate authority, information, or 27 instructions from or on behalf of the beneficiary or guarantor 28 as related to the property interest or underlying loan. 29 Sec. 7. Section 657A.3, Code 2019, is amended to read as 30 follows: 31 657A.3 Interested persons —— opportunity to abate public 32 nuisance. 33 1. Before appointing a receiver to perform work or to 34 furnish material to abate a public nuisance under this chapter , 35 -5- SF 93 (13) 88 ko/jh/jh 5/ 11
S.F. 93 the court shall conduct a hearing at which the court shall 1 offer mortgagees of record, lienholders of record, or other 2 known interested persons in the order of priority of interest 3 in title, the opportunity to undertake the work and to furnish 4 the materials necessary to abate the public nuisance. The 5 establish a date before which interested persons may file with 6 the court shall require the person selected to demonstrate 7 the written proof of intent and ability to promptly undertake 8 promptly the work required and to post security for the 9 performance of the work. If no such written proof is filed 10 by that date, the court may appoint a receiver pursuant to 11 subsection 3. 12 2. All amounts expended by the person toward abating the 13 public nuisance are a lien on the property if the expenditures 14 were are approved in advance by the a judge and if the person 15 desires the lien. The Unless an interested person has a 16 contract with the owner providing for a different interest 17 rate, the lien shall bear interest at the rate provided for 18 judgments pursuant to section 535.3 , and shall be payable upon 19 terms approved by the judge. If a certified copy of the a 20 court order that approved approving the expenses and the terms 21 of payment for the lien, and a description of the property 22 in question , are filed for of record within thirty days of 23 the date of issuance of the order in the office of the county 24 recorder of the county in which the property is located, the 25 lien has the same priority as the mortgage of a receiver as 26 provided in section 657A.7 . 27 2. 3. If the court determines by the date established 28 in subsection 1 or at the a hearing conducted pursuant 29 to subsection 1 , on the sufficiency of a timely filed 30 rehabilitation plan that no interested person can undertake the 31 work and furnish the materials required to abate the public 32 nuisance, or if the court determines at any time after the 33 hearing that an interested person who is undertaking corrective 34 work pursuant to this section cannot or will not proceed, or 35 -6- SF 93 (13) 88 ko/jh/jh 6/ 11
S.F. 93 has not proceeded with due diligence, the court may appoint a 1 receiver to take possession and control of the property. The 2 receiver shall be appointed in the manner provided in section 3 657A.4 . 4 4. If the building is a historic building or is located in 5 a designated historic district, the court shall give preference 6 to an economically feasible rehabilitation plan that preserves 7 the historical nature of the building. 8 5. Unless a receiver’s mortgage provides for periodic 9 payments, a notice, in lieu of the notice pursuant to section 10 654.2D, shall also be served by ordinary or electronic mail 11 informing all interested persons of the date certain for the 12 maturity of the mortgage note, or the event triggering maturity 13 of the mortgage note, and that on maturity the receiver’s 14 mortgage loan will be payable in full and the mortgagee may 15 then commence foreclosure without further notice. A notice 16 pursuant to section 654.4B shall also be served by ordinary or 17 electronic mail on the owner of record of the property. The 18 mortgagee shall not commence foreclosure of the mortgage until 19 sixty calendar days have passed since the date of service of a 20 notice under this subsection. 21 Sec. 8. Section 657A.4, Code 2019, is amended to read as 22 follows: 23 657A.4 Appointment of receiver. 24 After conducting If after expiration of a date established 25 pursuant to section 657A.3, subsection 1, or a hearing 26 pursuant to section 657A.3 , the court may appoint a receiver 27 to take possession and control of the property in question. 28 A person shall not be appointed as a receiver unless the 29 person has first provided the court with a viable financial 30 and construction plan for the rehabilitation of the property 31 in question and has demonstrated the capacity and expertise 32 to perform the required work in a satisfactory manner. The 33 appointed receiver may be a financial institution that 34 possesses an interest of record in the property, a nonprofit 35 -7- SF 93 (13) 88 ko/jh/jh 7/ 11
S.F. 93 corporation that is duly organized and exists for the primary 1 purpose of improving housing conditions in the county or city 2 in which the property in question is located, or any person 3 deemed qualified by the court. No part of the net earnings of a 4 nonprofit corporation serving as a receiver under this section 5 shall benefit a private shareholder or individual. Membership 6 on the board of trustees of a nonprofit corporation does not 7 constitute the holding of a public office or employment and is 8 not an interest, either direct or indirect, in a contract or 9 expenditure of money by a city or county. No member of a board 10 of trustees of a nonprofit corporation appointed as receiver 11 is disqualified from holding public office or employment, nor 12 is a member required to forfeit public office or employment by 13 reason of the membership on the board of trustees. 14 Sec. 9. Section 657A.6, subsection 9, Code 2019, is amended 15 to read as follows: 16 9. Issue notes and secure the notes by mortgages bearing 17 interest at the rate provided for judgments pursuant to 18 section 535.3 , and any terms and conditions as approved by 19 the court. The court may provide for a higher interest rate 20 if the receiver has established to the satisfaction of the 21 court that the receiver has sought financing from individuals 22 and institutions willing to lend money for rehabilitation 23 of property and that the terms proposed by the receiver are 24 reasonable. When transferred by the receiver in return for 25 valuable consideration in including money, material, labor, 26 or services, the notes issued by the receiver are freely 27 transferable. If the receiver has notice that the mortgagee 28 of the receiver’s mortgage is contemplating a transfer of the 29 mortgage, the receiver shall disclose such to the court in the 30 application for approval of the mortgage. 31 Sec. 10. NEW SECTION . 657A.6A Receiver —— prohibited acts. 32 Notwithstanding section 657A.10, it shall be unlawful, and a 33 receiver may be held liable for actual damages as determined 34 by a court, for entering a residential property that is not 35 -8- SF 93 (13) 88 ko/jh/jh 8/ 11
S.F. 93 abandoned for the purpose of forcing, intimidating, harassing, 1 or coercing a lawful occupant of the property to vacate in 2 order to render the property vacant and abandoned, and it shall 3 be unlawful to otherwise force, intimidate, harass, or coerce 4 a lawful occupant of a residential property to vacate so the 5 property may be deemed vacant and abandoned. A receiver who 6 peacefully enters a property for the purpose of rendering the 7 property vacant and abandoned shall be immune from liability 8 if the receiver makes a good-faith effort to comply with this 9 chapter and all terms of any applicable mortgage, lease, or 10 other agreement related to the occupancy of the building. 11 Sec. 11. Section 657A.7, subsection 1, Code 2019, is amended 12 to read as follows: 13 1. If the receiver’s mortgage is filed for of record in 14 the office of the county recorder of the county in which the 15 property is located within sixty days of the issuance of a 16 secured note, the receiver’s mortgage is a first lien upon the 17 property and is superior to claims of the receiver and to all 18 prior or subsequent liens and encumbrances except taxes and 19 assessments , including taxes and assessments advanced by any 20 mortgagee in the twelve-month period immediately preceding the 21 date a petition is filed pursuant to section 657A.2 . Priority 22 among the receiver’s mortgages is determined by the order in 23 which the mortgages are recorded. 24 Sec. 12. Section 657A.7, Code 2019, is amended by adding the 25 following new subsection: 26 NEW SUBSECTION . 3. If a mortgagee of the receiver’s 27 mortgage begins foreclosure procedures pursuant to chapter 655A 28 and an interested party desires to pay off the mortgage loan, 29 the interested party shall also pay the mortgagee’s reasonable 30 costs and attorney fees. 31 Sec. 13. Section 657A.8, Code 2019, is amended to read as 32 follows: 33 657A.8 Assessment of costs. 34 The court may assess the costs and expenses set out in 35 -9- SF 93 (13) 88 ko/jh/jh 9/ 11
S.F. 93 section 657A.6, subsection 2 , and may approve receiver’s fees 1 to the extent that the fees are not covered by the income 2 from the property. The receiver shall pay the costs and 3 reasonable attorney fees of a plaintiff who requested an 4 inspection pursuant to section 657A.1A unless an interested 5 party not in default who appeared for the inspection objects 6 to the fees and costs in whole or in part. The court shall 7 determine the merits of such objection. If the court finds 8 that a neighboring landowner has pursued an action pursuant to 9 this chapter in bad faith, the court may assess attorney fees 10 against the neighboring landowner and may bar such neighboring 11 landowner from filing future actions under this chapter. If a 12 foreclosure of the receiver’s mortgage pursuant to chapter 655A 13 is contemplated, the court may retain jurisdiction to determine 14 the amount of attorney fees payable under section 657A.7, 15 subsection 3. 16 Sec. 14. Section 657A.10A, subsection 1, paragraph a, Code 17 2019, is amended to read as follows: 18 a. In lieu of the procedures in sections 657A.2 657A.1A 19 through 657A.10 and 657A.10B , a city in which an abandoned a 20 building that has been abandoned for at least six consecutive 21 months is located may petition the court to enter judgment 22 awarding title to the abandoned property to the city. A 23 petition filed under this section shall include the legal 24 description of the abandoned property. If more than one 25 abandoned building is located on a parcel of real estate, the 26 city may combine the actions into one petition. The owner of 27 the building and grounds, mortgagees of record, lienholders 28 of record, or other known persons who hold an interest in the 29 property shall be named as respondents on the petition. 30 Sec. 15. NEW SECTION . 657A.10B Applicability. 31 The provisions of sections 657A.1A through 657A.10 shall 32 only apply to cities and counties that have, by ordinance, 33 provided that the provisions shall apply. 34 Sec. 16. NEW SECTION . 657A.10C Petition for injunction. 35 -10- SF 93 (13) 88 ko/jh/jh 10/ 11
S.F. 93 As an alternative to the remedies under this chapter, a 1 city, or a county if a property that is alleged to be a public 2 nuisance is located outside the limits of a city, may petition 3 the court for an injunction that requires the owner of the 4 property to correct or eliminate the condition or violation 5 causing the public nuisance. Service of the original notice 6 shall be made as provided in section 657A.2, subsection 1. 7 Sec. 17. CODE EDITOR DIRECTIVE. 8 1. The Code editor is directed to renumber section 657A.10B, 9 as enacted in this Act, as section 657A.10A, and to renumber 10 section 657A.10A as section 657A.10B. 11 2. The Code editor shall correct internal references in the 12 Code and in any enacted legislation as necessary due to the 13 enactment of this section. 14 -11- SF 93 (13) 88 ko/jh/jh 11/ 11