House Study Bill 172 - IntroducedA Bill ForAn Act 1relating to abandoned structures and abatement of public
2nuisances.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1   Section 1.  Section 631.1, Code 2019, is amended by adding
2the following new subsection:
3   NEW SUBSECTION.  10.  The district court sitting in small
4claims has concurrent jurisdiction for administrative warrant
5applications pursuant to section 657A.1A, subsection 2.
6   Sec. 2.  Section 655A.6, Code 2019, is amended to read as
7follows:
   8655A.6  Rejection of notice.
   91.  If either the mortgagor, or successor in interest of
10record including a contract purchaser, within thirty days of
11service of the notice pursuant to section 655A.3, files with
12the recorder of the county where the mortgaged property is
13located, a rejection of the notice reasonably identifying
14the notice which is rejected together with proofs of service
15required under section 655A.4 that the rejection has been
16served on the mortgagee, the notice served upon the mortgagor
17pursuant to section 655A.3 is of no force or effect.
   182.  Rejection of notice pursuant to subsection 1 shall not be
19available to a mortgagor, or successor in interest of record
20including a contract purchaser, of a mortgaged property that a
21court of competent jurisdiction determined has been abandoned
22pursuant to section 657A.2, on or after the date as determined
23in section 657A.2, subsection 5.
24   Sec. 3.  Section 657A.1, subsections 1 and 3, Code 2019, are
25amended to read as follows:
   261.  “Abandoned” or “abandonment” means that a building has
27remained
 is vacant and has been in violation of the housing
28code or building code of the city in which the property is
29located or the housing code or building code applicable in the
30county in which the property is located if outside the limits
31of a city for a period of six consecutive months.
   323.  “Building” means a building or structure, including a
33mobile or manufactured home which has been converted to real
34estate pursuant to section 435.26,
located in a city or outside
35the limits of a city in a county, which is used or intended
-1-1to be used for commercial or industrial purposes or which
2is used or intended to be used for residential purposes and
3includes a building or structure in which some floors may be
4used for retail stores, shops, salesrooms, markets, or similar
5commercial uses, or for offices, banks, civic administration
6activities, professional services, or similar business or civic
7uses, and other floors are used, designed, or intended to be
8used for residential purposes.
9   Sec. 4.  Section 657A.1, Code 2019, is amended by adding the
10following new subsection:
11   NEW SUBSECTION.  8.  “Responsible building official” or
12“official” means the person appointed by the city or, if the
13building is outside the limits of a city, the county, to
14enforce its building codes and regulations in general or to
15enforce this chapter in particular.
16   Sec. 5.  NEW SECTION.  657A.1A  Preliminary inspection of
17building.
   181.  No sooner than one hundred thirty-five days after a
19property has become vacant, a person, other than a governmental
20entity, may request that the responsible building official
21inspect the property and certify that a property is both
22abandoned and in need of abatement. The responsible building
23official may also initiate an inspection on the official’s own
24initiative.
   252.  If the responsible building official finds from an
26exterior view of the property, in addition to any other
27credible information that the official may have, that there
28is reasonable cause to believe that the property is abandoned
29and in need of abatement, the official shall schedule a date
30and time for an inspection of the property by the official.
31The person requesting the inspection shall provide written
32notice of the scheduled inspection by first class mail and
33certified mail to the owner and all interested persons at
34least twenty days before the inspection. The notice must
35state the date, time, and place of the inspection and state
-2-1that unless the owner appears at the inspection to allow the
2responsible building official access to the interior of the
3property, the official, accompanied by the person serving
4notice and any interested persons appearing for the inspection,
5may enter the property to determine whether the property is
6abandoned and in need of abatement and, if so, to estimate
7the costs of abatement. The official may enter the property
8for an inspection, along with the person serving notice and
9any interested persons, if the owner is not present for the
10inspection. Upon request, the inspection may be rescheduled
11as needed. The responsible building official may make an
12application for an administrative warrant pursuant to section
13808.14 if necessary to conduct an inspection pursuant to this
14section.
   153.  The responsible building official’s findings shall
16be in writing with copies provided to the person requesting
17the inspection, the owner, and all interested parties. The
18governmental entity employing the responsible building official
19may establish and charge a fee to cover the reasonable costs
20of the inspection, which shall be added to costs in an action
21under this chapter.
   224.  Evidence that financial obligations in respect to a
23building, including but not limited to payments of a mortgage,
24bills, or property taxes, are currently met does not rebut a
25finding of abandonment if the property is substantially in need
26of abatement in an action filed under section 657A.2.
27   Sec. 6.  Section 657A.2, Code 2019, is amended by striking
28the section and inserting in lieu thereof the following:
   29657A.2  Petition.
   301.  No sooner than the latter of thirty days after provision
31of the responsible building official’s findings under section
32657A.1A and six months after a building has become abandoned,
33a petition for abatement under this chapter may be filed in
34the district court of the county in which the property is
35located by the city in which the property is located, by the
-3-1county if the property is located outside the limits of a city,
2by a neighboring landowner, or by a duly organized nonprofit
3corporation which has as one of its goals the improvement of
4housing conditions in the county or city in which the property
5in question is located. The petition shall not demand a
6personal judgment against any party, but shall concern only
7the interests in the property. A petition for abatement filed
8under this chapter shall include the legal description of
9the real property upon which the public nuisance is located
10unless the public nuisance is not situated on or confined to
11a parcel of real property, or is portable or capable of being
12removed from the real property. Service shall be made on all
13interested persons by personal service or by both certified
14mail and first class mail, or if service cannot be made by
15either method, by posting the notice in a conspicuous place on
16the building and by publication. Service may also be made as
17provided in section 654.4A.
   182.  If entering judgment, the court shall determine any
19issues at law, including issues relating to title, raised by
20the plaintiff or by a party in interest who has filed a motion
21or answer.
   223.  In any evidentiary hearing or motion in a proceeding
23under this chapter, the written findings of the responsible
24building official relating to the condition of the building and
25other matters within the scope of this chapter, if provided
26at least ten days before the hearing to all persons not in
27default, shall be accepted as evidence without prejudice to the
28right of any party to require the personal testimony of the
29responsible building official at the hearing.
   304.  If the court finds at a hearing pursuant to this section
31that the building is abandoned or is a public nuisance, the
32court may issue an injunction requiring the owner to correct
33any conditions that make such building a public nuisance, or
34issue another order that the court deems appropriate to address
35the public nuisance.
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   15.  If the court finds at a hearing pursuant to this
2section that the building is abandoned, unless the court
3order establishes otherwise, the property shall be deemed
4continuously abandoned from the date the action is indexed
5pursuant to section 617.10, subsection 1.
   66.  A property shall not be claimed as homestead pursuant to
7chapter 561 on or after the date determined in subsection 5.
   87.  In a proceeding under this chapter, if the court
9determines the building is not abandoned or is not a public
10nuisance, the court shall dismiss the petition and may require
11the petitioner to pay an interested party’s reasonable attorney
12fees, unless the interested party received proper notice and
13did not appear for an inspection pursuant to section 657A.1A.
14   Sec. 7.  Section 657A.3, Code 2019, is amended to read as
15follows:
   16657A.3  Interested persons — opportunity to abate public
17nuisance.
   181.  Before appointing a receiver to perform work or to
19furnish material to abate a public nuisance under this chapter,
20the court shall conduct a hearing at which the court shall
21offer mortgagees of record, lienholders of record, or other
22known interested persons in the order of priority of interest
23in title, the opportunity to undertake the work and to furnish
24the materials necessary to abate the public nuisance. The
25
 establish a date before which interested persons may file with
26the
court shall require the person selected to demonstrate
27the
 written proof of intent and ability to promptly undertake
28promptly the work required and to post security for the
29performance of the work. If no such written proof is filed
30by that date, the court may appoint a receiver pursuant to
31subsection 3.

   322.  All amounts expended by the person toward abating the
33public nuisance are a lien on the property if the expenditures
34were are approved in advance by the a judge and if the person
35desires the lien. The Unless an interested person has a
-5-1contract with the owner providing for a different interest
2rate, the
lien shall bear interest at the rate provided for
3judgments pursuant to section 535.3, and shall be payable upon
4terms approved by the judge. If a certified copy of the a
5 court order that approved approving the expenses and the terms
6of payment for the lien, and a description of the property
7in question, are filed for of record within thirty days of
8the date of issuance of the order in the office of the county
9recorder of the county in which the property is located, the
10lien has the same priority as the mortgage of a receiver as
11provided in section 657A.7.
   122.    3.  If the court determines by the date established
13in subsection 1 or
at the a hearing conducted pursuant
14to subsection 1,
 on the sufficiency of a timely filed
15rehabilitation plan
that no interested person can undertake the
16work and furnish the materials required to abate the public
17nuisance, or if the court determines at any time after the
18hearing that an interested person who is undertaking corrective
19work pursuant to this section cannot or will not proceed, or
20has not proceeded with due diligence, the court may appoint a
21receiver to take possession and control of the property. The
22receiver shall be appointed in the manner provided in section
23657A.4.
   244.  If the building is a historic building or is located in
25a designated historic district, the court shall give preference
26to an economically feasible rehabilitation plan that preserves
27the historical nature of the building.
   285.  Unless a receiver’s mortgage provides for periodic
29payments, a notice, in lieu of the notice pursuant to section
30654.2D, shall also be served by ordinary or electronic mail
31informing all interested persons of the date certain for the
32maturity of the mortgage note, or the event triggering maturity
33of the mortgage note, and that on maturity the receiver’s
34mortgage loan will be payable in full and the mortgagee may
35then commence foreclosure without further notice. A notice
-6-1pursuant to section 654.4B shall also be served by ordinary or
2electronic mail on the owner of record of the property. The
3mortgagee shall not commence foreclosure of the mortgage until
4sixty calendar days have passed since the date of service of a
5notice under this subsection.
6   Sec. 8.  Section 657A.4, Code 2019, is amended to read as
7follows:
   8657A.4  Appointment of receiver.
   9After conducting If after expiration of a date established
10pursuant to section 657A.3, subsection 1, or
a hearing
11pursuant to section 657A.3, the court may appoint a receiver
12to take possession and control of the property in question.
13A person shall not be appointed as a receiver unless the
14person has first provided the court with a viable financial
15and construction plan for the rehabilitation of the property
16in question and has demonstrated the capacity and expertise
17to perform the required work in a satisfactory manner. The
18appointed receiver may be a financial institution that
19possesses an interest of record in the property, a nonprofit
20corporation that is duly organized and exists for the primary
21purpose of improving housing conditions in the county or city
22in which the property in question is located, or any person
23deemed qualified by the court. No part of the net earnings of a
24nonprofit corporation serving as a receiver under this section
25shall benefit a private shareholder or individual. Membership
26on the board of trustees of a nonprofit corporation does not
27constitute the holding of a public office or employment and is
28not an interest, either direct or indirect, in a contract or
29expenditure of money by a city or county. No member of a board
30of trustees of a nonprofit corporation appointed as receiver
31is disqualified from holding public office or employment, nor
32is a member required to forfeit public office or employment by
33reason of the membership on the board of trustees.
34   Sec. 9.  Section 657A.6, unnumbered paragraph 1, Code 2019,
35is amended to read as follows:
-7-   1Before proceeding with the receiver’s duties, a receiver
2appointed by the court shall post a bond in an amount
3designated by the court. A receiver shall be immune from
4liability for any act or omission arising from a good faith
5effort to comply with court-ordered duties pursuant to
6this section.
The court may empower the receiver to do the
7following:
8   Sec. 10.  Section 657A.6, subsection 9, Code 2019, is amended
9to read as follows:
   109.  Issue notes and secure the notes by mortgages bearing
11interest at the rate provided for judgments pursuant to
12section 535.3, and any terms and conditions as approved by
13the court. The court may provide for a higher interest rate
14if the receiver has established to the satisfaction of the
15court that the receiver has sought financing from individuals
16and institutions willing to lend money for rehabilitation
17of property and that the terms proposed by the receiver are
18reasonable.
When transferred by the receiver in return for
19valuable consideration in including money, material, labor,
20or services, the notes issued by the receiver are freely
21transferable. If the receiver has notice that the mortgagee
22of the receiver’s mortgage is contemplating a transfer of the
23mortgage, the receiver shall disclose such to the court in the
24application for approval of the mortgage.

25   Sec. 11.  Section 657A.7, subsection 1, Code 2019, is amended
26to read as follows:
   271.  If the receiver’s mortgage is filed for of record in
28the office of the county recorder of the county in which the
29property is located within sixty days of the issuance of a
30secured note, the receiver’s mortgage is a first lien upon the
31property and is superior to claims of the receiver and to all
32prior or subsequent liens and encumbrances except taxes and
33assessments, including taxes and assessments advanced by any
34mortgagee in the twelve-month period immediately preceding the
35date a petition is filed pursuant to section 657A.2
. Priority
-8-1among the receiver’s mortgages is determined by the order in
2which the mortgages are recorded.
3   Sec. 12.  Section 657A.7, Code 2019, is amended by adding the
4following new subsection:
5   NEW SUBSECTION.  3.  If a mortgagee of the receiver’s
6mortgage begins foreclosure procedures pursuant to chapter 655A
7and an interested party desires to pay off the mortgage loan,
8the interested party shall also pay the mortgagee’s reasonable
9costs and attorney fees.
10   Sec. 13.  Section 657A.8, Code 2019, is amended to read as
11follows:
   12657A.8  Assessment of costs.
   13The court may assess the costs and expenses set out in
14section 657A.6, subsection 2, and may approve receiver’s fees
15to the extent that the fees are not covered by the income
16from the property. The receiver shall pay the costs and
17reasonable attorney fees of a plaintiff who requested an
18inspection pursuant to 657A.1A unless an interested party
19not in default who appeared for the inspection objects to
20the fees and costs in whole or in part. The court shall
21determine the merits of such objection. If the court finds
22that a neighboring landowner has pursued an action pursuant to
23this chapter in bad faith, the court may assess attorney fees
24against the neighboring landowner and may bar such neighboring
25landowner from filing future actions under this chapter. If a
26foreclosure of the receiver’s mortgage pursuant to chapter 655A
27is contemplated, the court may retain jurisdiction to determine
28the amount of attorney fees payable under 657A.7, subsection 3.

29   Sec. 14.  Section 657A.10A, subsection 1, paragraph a, Code
302019, is amended to read as follows:
   31a.  In lieu of the procedures in sections 657A.2 657A.1A
32 through 657A.10 and 657A.10B, a city in which an abandoned
33building is located may petition the court to enter judgment
34awarding title to the abandoned property to the city. A
35petition filed under this section shall include the legal
-9-1description of the abandoned property. If more than one
2abandoned building is located on a parcel of real estate, the
3city may combine the actions into one petition. The owner of
4the building and grounds, mortgagees of record, lienholders
5of record, or other known persons who hold an interest in the
6property shall be named as respondents on the petition.
7   Sec. 15.  NEW SECTION.  657A.10B  Applicability.
   8The provisions of sections 657A.1A through 657A.10 shall
9only apply to cities and counties that have, by ordinance,
10provided that the provisions shall apply.
11   Sec. 16.  CODE EDITOR DIRECTIVE.
   121.  The Code editor is directed to renumber section 657A.10B,
13as enacted in this Act, as section 657A.10A, and to renumber
14section 657A.10A as section 657A.10B.
   152.  The Code editor shall correct internal references in the
16Code and in any enacted legislation as necessary due to the
17enactment of this section.
18EXPLANATION
19The inclusion of this explanation does not constitute agreement with
20the explanation’s substance by the members of the general assembly.
   21This bill changes certain procedures relating to abandoned
22structures and abatement.
   23The current definition of “abandoned” or “abandonment”
24requires a property to have been in violation of a housing or
25building code for at least six months. The bill removes the
26time element from the definition and states that evidence of
27financial obligations in respect to the building does not rebut
28a finding of abandonment if the property is substantially in
29need of abatement. The bill requires a property to remain
30vacant for 135 days before a person may request a responsible
31building official to inspect a building to determine whether
32it is abandoned and in need of abatement. Responsible
33building official is defined in the bill. The bill allows the
34responsible building inspector to make an application to the
35court for an administrative warrant if necessary to conduct an
-10-1inspection of a building.
   2The term “building” currently includes buildings and
3structures only. The bill adds mobile and manufactured homes
4that have become real property pursuant to Code section 435.26.
   5Current law relies on the current definition of “abandoned”
6to start the clock for when a person may file a petition
7for abatement. A hearing is required to determine if the
8building is abandoned or is a public nuisance. Currently, a
9petitioner must make service on the building owner in one of
10three methods. The bill requires a property to remain vacant
11for at least 135 days before a person may file a petition for
12abatement. The bill does not allow for a personal judgment
13against any party and requires the petition to be solely
14against the interested persons’ interest in the property. The
15bill includes additional methods of service. The bill allows a
16responsible building official’s written inspection report to be
17accepted as evidence in an evidentiary hearing or motion in a
18proceeding under Code chapter 657A under certain circumstances.
   19The bill provides that if a court finds that a building is
20abandoned, unless the court order establishes otherwise, the
21property is deemed continuously abandoned from the date the
22action is indexed pursuant to Code section 617.10. A property
23cannot be claimed as homestead, and a mortgagor, or successor
24in interest of record, cannot reject a nonjudicial foreclosure
25written notice served on the mortgagor, or successor in
26interest, after such date.
   27Current law allows an owner to collect reasonable attorney
28fees actually incurred from a petitioner if the court finds
29that the building in question is not abandoned or a public
30nuisance. The bill allows the court to require the petitioner
31to pay an interested party’s reasonable attorney fees unless
32the interested party was properly noticed and did not appear
33for an inspection pursuant to Code section 657A.1A.
   34Current law requires the court to conduct a hearing to offer
35mortgagees of record, lienholders of record, or other known
-11-1interested persons the opportunity to abate a public nuisance.
2The bill eliminates such hearing and creates a new process for
3interested persons to demonstrate their intent and ability to
4abate the nuisance and act as a receiver. If the building
5is a historic building or located in a historic district,
6the court shall give preference to an economically feasible
7rehabilitation plan that preserves the historical nature of the
8building.
   9Current law allows a court to empower a receiver to issue
10notes and secure the notes by mortgage bearing interest at
11the statutory rate and any terms and conditions approved by
12the court. The bill allows the court to provide for a higher
13interest rate. If the receiver contemplates a transfer of the
14note and mortgage, at the time that the receiver seeks court
15authorization of the contemplated transfer, the receiver must
16disclose to the mortgagee the contemplated transfer in the
17receiver’s application for approval of the mortgage. The bill
18provides immunity from liability for a receiver acting in good
19faith to fulfill the receiver’s court-appointed duties.
   20The bill makes an interested party responsible for paying
21the mortgagee’s reasonable costs and attorney fees if the
22interested party pays off the receiver’s mortgage loan.
   23The bill requires a receiver to pay a plaintiff’s reasonable
24attorney fees in most situations, but provides that a
25neighboring landowner who pursued an action in bad faith may
26be liable for attorney fees. The court may bar such landowner
27from filing further actions under Code chapter 657A.
   28The bill provides that Code sections 657A.1A through 657A.10
29shall only apply to cities and counties that adopt such by
30ordinance.
   31The bill directs the Code editor to renumber new Code section
32657A.10B as new Code section 657A.10A, and to renumber current
33Code section 657A.10A as new Code section 657A.10B, and to
34correct internal Code references as necessary.
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