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STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
HOUSE BILL 2423 By: Nichols
AS INTRODUCED
An Act relating to cities and towns; defining terms;
providing applicability to all municipalities;
providing does not apply to owner oc cupied property;
providing that any fees, penalties and abatement
costs imposed against property for violations of a
municipality's housing and building codes may be
enforced in rem as a lien; providing that
municipalities may proceed with judicial in rem
foreclosures of municipal code liens by an enactment
of an ordinance or resolution of the governing
authority of the municipality in which the real
property is located; providing requirements for a
municipal ordinance authorizing liens and
foreclosures pursuant to this act; providing this act
does not constitute an action for personal liability
for the municipal code liens against the owner or
owners of the real property; providing that the
rights and remedies set forth in this act are
available solely to t he governmental entities
authorized by law to enforce municipal ordinances;
providing that a municipality that seeks to enforce a
municipal code lien through the sale of real property
shall utilize the judicial in rem proceedings of this
act as the sole remedy; providing that enforcement
proceedings may be initiated only by the
municipality; providing timeframe for filing a
petition for judicial in rem foreclosure for a
municipal code lien; providing requirements for
filling a petition for judicial in rem f oreclosure
when the property is subject to unpaid taxes;
providing notice requirements needed prior to a
judicial in rem foreclosure; and providing an
effective date.
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BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 22-140 of Title 11, unless there
is created a duplication in numbering, reads as follows:
As used in this act, the following words and phrases shall have
the following meanings:
1. "Code Enforcement Director " is an employee of the
municipality who is tasked by the municipal governing body with the
enforcement of state law or local ordinances related to the
condition of real property within the j urisdiction of the
municipality;
2. "Interest Party" means:
a. the person who last appears as owner of the real
property in the county records,
b. the current mortgagee of record of the property or
assignee of record of the mortgagee,
c. the current holder of a beneficial int erest in a deed
of trust recorded against the real property,
d. a tax certificate holder, or
e. any party having an interest in the real property, or
in any part thereof, legal or equitable, in severalty
or as tenant in common, whose identity and address es
are reasonably ascertainable from the records of the
municipality or records maintained in the county
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records or as revealed by a full title search,
consisting of (fifty) 50 years or more;
An Interested Party shall not include the holder of the benefit
of an easement which burdens the real property, the holder of the
benefit or burden of a real covenant which burdens the real
property, or the holder of the benefit of a utility easement which
burdens the real property.
3. "Minimum Bid Price" means the price that the Redemption
Amount;
4. "Municipal Code Lien" means any lien that has been levied
against real property by a municipality that is the result of the
non-payment of any fine, penalty, abatement cost, or enforcement
cost incurred by a municipality related to the enforcement of state
or local housing and building codes. Such lien shall include only
those liens which arise out of a failure to comply with any law of
the State of Oklahoma , or from the failure to comply with a
municipality's ordinance or resolutions;
A municipal code lien shall not include any lien that has
previously been certified to the tax collector of the county for
inclusion on the property tax bill associated with the real
property.
5. "Municipal Code Lien Payoff " means the principal amount of a
municipal code lien, interest accrued at the rate of seven and one -
half percent per annum from the date the municipal code lien was
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filed in the office of county clerk, any fees or costs incurred in
the collection of such a lien under thi s act including, without
limitations, the cost of title examinations and publication of
notices, and any other penalties allowable under either the laws of
the state of Oklahoma or under an ordinance or resolut ion enacted by
the municipality;
6. "Owner Occupied" means real property that is lawfully
occupied as a principal residence that is any of the following:
a. a homestead as described in Section 2888 of Title 68
of the Oklahoma Statutes ,
b. exempt from ad valorem taxation under Sections 2904
through 2911 of Title 68 of the Oklahoma Sta tutes, and
c. eligible for the designations listed in sub divisions a
or b, but which has not yet been granted such
designation and which is lawfully occupied by the
family of a deceased individual;
7. "Redemption Amount" means the sum of:
a. the full amount of the municipal code lien payoff for
each municipal code lien on which the municipality is
seeking to foreclose under this act, and
b. any tax payoff that may be applicable to the property
on which municipality is seek ing to foreclose under
this act.
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8. "Taxes" means those taxes assessed against real property by
either by the State of Oklahoma, the county in which the real
property is situated, or the mu nicipality that are delinquent , as of
the date a proceeding under this act is commenced or at any time
before final resolution of the same, and shall also include any
taxes assessed against real property that are unpaid from any
previous year and any amounts required for redemption. As provided
in Section 3103 of Title 68 of the Oklahoma Statues , a lien for
Taxes shall be superior to all other liens, including municipal code
liens;
9. "Tax Certificate Holder " means any of the following:
a. a tax sale purchaser that holds a certificate of
purchase,
b. the state, where it has accepted and recorded a
certificate of purchase obtained at a tax sale,
c. any party to which a certificate of purchase obtained
at a tax sale has been assigned to, or
d. the purchaser or assignee of a tax lien certificate;
10. "Tax Payoff" means any all amounts necessary to satisfy any
claims for delinquent taxes assessed against the real property on
which the municipality is seeking to foreclosure under this act.
Those amounts shall include:
a. if the taxes associated with the property are
delinquent, but the property has not yet been sold for
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taxes, then the full amount of delinquent taxes,
costs, fees and charges due to the county tax
collector,
b. if the property has been sold for taxes to either the
state or to a party other than the state, the n those
amounts required for , and
c. if a tax lien has been sold by a county, then the
amount required for redemption .
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 22-141 of Title 11, unless there
is created a duplication in numbering, reads as follows:
1. The provisions of this act shall apply to any municipal
governing body that adopts the provisions of this act to be
applicable to the collection of municipal code liens as to real
property, other than owner occupie d property, in the municipality;
and
2. The provisions of this act shall not a pply to owner occupied
property;
SECTION 3. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 22-142 of Title 11, unless there
is created a duplication in numbering, reads as follows:
Notwithstanding any law to the contrary, any fees, penalties and
abatement costs imposed against property other than Owner Occupied
real property for violations of a municipality's housing and
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building codes adopted pursuant to the statutes of the state of
Oklahoma, may be enforced in rem as a lien in accordance with this
act.
Every municipal code lien, as defined in this act, shall be
superior to all other liens, exc ept those liens for taxes described
or referenced in Section 3103 of Title 68 of the Oklahoma Statues.
SECTION 4. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 22-143 of Title 11, unless there
is created a duplication in numbering, reads as follows:
A. Any municipality to which this act applies may proceed with
judicial in rem foreclosures of municipal code liens in accordance
with the provisions of this act by enactment of an ordinance or
resolution of the governing authority of the municipality in which
the real property is located which ordinance or resolution shall be
sufficient authority for use of this act by the municipality to
enforce its municipal code liens.
B. The ordinance of a municipal ity authorizing and approving
the use of this act shall include all the following matters:
1. The initial effective date for application of these
procedures;
2. If the municipality elects not to apply these procedures to
all real properties as of the sam e future date, then the phase -in of
these procedures over a period of time and the manner of
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determination of which real properties are subject in whi ch sequence
to these procedures;
3. The explicit exclusion of owner -occupied properties from the
application of the judicial in rem foreclosure pr ocedures authorized
in this act;
4. The nature and extent of notices, support services, and
referrals to be provided to the owners and occupan ts of owner-
occupied properties; and
5. Any other matters the municipal ity specifies to be addressed
through administrative regulations and policies.
C. Proceedings in accordance with this act are designed solely
to enforce the municipal code lien for real property subject to the
municipal code lien and shall not constitute an action for personal
liability for the municipal code liens against the owner or owners
of the real property.
D. The rights and remedies set forth in this act are available
solely to the governmental entities authorized by law to enforce
municipal ordinances and shall not extend to any nongovernmental
transferee of municipal code liens.
E. A municipality that has adopted the provisions of this act
and that seeks to enforce a municipal code lien through the sale of
real property shall utilize the judicia l in rem proceedings of this
act as the sole remedy for the enforcement through the sale of real
property.
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F. The enforcement proceedings authorized by this act may be
initiated only by the municipality.
SECTION 5. NEW LAW A new se ction of law to be codified
in the Oklahoma Statutes as Section 22-144 of Title 11, unless there
is created a duplication in numbering, reads as follows:
A. After a municipal code lien has been recorded with the
office of the County Clerk of the county in which the real property
lies, the code enforcement director may identify those properties on
which to commence a judicial in rem foreclosure in accordance with
this act, except that those properties the code enforcement director
identifies as owner occupi ed shall not be subject to judicial in rem
foreclosure under this act. The code enforcement director shall not
file a petition for judicial in rem foreclosure in accordance with
this act for a period of six (6) months following the date upon
which the municipal code lien is recorded in the office of the
County Clerk. A petition for judicial in rem foreclosure may
include any other municipal code lien that has been filed prior to
the date the petition is filed. After enforcement proceedings have
commenced in accordance with this act, the enforcement proceedings
may be amended to include any subsequently arising municipal code
liens and, if applicable, any and all taxes as defined in this act.
B. If the property on which the municipality is seeking to
foreclose under this act is subject to taxes as defined in this act,
then at least sixty (60) days prior to the filing of the petition,
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the code enforcement director shall notify all other taxing agencies
within the jurisdiction of the municipality, and the St ate of
Oklahoma of the code enforcement director 's intention to file a
petition for judicial in rem foreclosure of the real property on
which a municipal code liens exists.
C. The code enforcement director in the name of the
municipality shall record in t he appropriate lis pendens record in
the office of the County Clerk of the county in which the real
property is located, a notice of his or her intent to file a
judicial in rem foreclosure action. The notice shall include a
legal description of the proper ty, street address of the property if
available, a statement that the property is subject to judicial in
rem foreclosure proceedings under this act, and a statement that
those proceedings may extinguish any legal interests in the
property.
D. Simultaneous with the filing of his or her notice of intent
to file a judicial in rem foreclosure action, the code enforcement
director in the name of the municipality shall file a petition with
the clerk of the district court for the district in which the real
property is located.
E. The petition shall be filed against the real property
against which the municipal code lien has been recorded and shall
provide all of the following:
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1. The identity of the municipality and the name and address o f
the code enforcement d irector;
2. The real property address;
3. A description of the real property;
4. The tax identificat ion number of the real property;
5. The municipal code lien which is being foreclosed;
6. The principal amount of the municipal code lien together
with applicable interest and penalties;
7. The principal amount of any additional municipal code liens
together with applicable interest and penalties in
accordance with subsection A if any;
8. The year or years for which t he taxes are delinquent, if
any;
9. The principal amount of the taxes together with interest and
penalties, if any;
10. A statement that upon final sale in accordance with this
act and payment of the amounts due for taxes, if applicable, an
interested party's rights of redemption, shall be extinguished; and
11. The names and addresses of all interested parties to whom
copies of the petition are to be sent in accordance with subsection
F.
F. The municipality shall mail copies of the petition by both
certified mail, return receipt requeste d, and by regular mail to all
interested parties whose identity and address are reasonably
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ascertainable. Copies of the petition shall also be mailed by
first-class mail to the real property address to the attention of
the occupants of the property, if an y. In addition, notice shall be
physically posted on the real property and shall include the
following statement: "THIS PROPERTY IS SUBJECT TO A JUDICIAL IN REM
FORECLOSURE ACTION AND MAY BE TRANSFERRED TO [NAME OF MUNICIPALITY]
OR ANOTHER PARTY. PERSONS WITH INFORMATION REGARDING THE CURRENT
OWNER OF THE PROPERTY ARE REQUESTED TO CONTACT [NAME OF
MUNICIPALITY]."
G. Within thirty (30) days of the filing of the petition, the
municipality shall cause a notice of the filing of the petition to
be published once each week for three (3) consecutive weeks in a
newspaper of general circulation in the county in which the property
is located. Such notice shall specify:
1. The name and address o f the code enforcement director;
2. The real property address;
3. A description of the real property;
4. The tax identification n umber of the real property;
5. Any applicable municipal code lien w hich is being foreclosed
upon;
6. The principal amount of any mu nicipal code lien together
with interest and penalties;
7. The applicable period of tax delinquency, if any;
8. The principal amount of taxes, if any;
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9. Upon deposit with the appropriate parties by the court of
the Tax Payoff amounts, if any, any and all rights of redemption
accorded to interested parties are ex tinguished; and
10. The date and place of the filing of the petition;
SECTION 6. This act shall become effective November 1, 2021.
58-1-6362 JL 01/14/21