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ENGROSSED HOUSE
BILL NO. 2038 By: Nichols and Hefner of the
House
and
Matthews of the Senate
An Act relating to cities and towns; enacting the
Municipal Code Lien Enforcement Act of 202 3; defining
terms; providing applicability to all municipalities;
providing that the provisions do not apply to owner -
occupied 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 whic h the
real property is located; providing requirements for
a municipal ordinance or resolution authorizing liens
and foreclosures pursuant to this act; providing this
act does not constitute an action for personal
liability for the municipal code liens aga inst the
owner or owners of the real prop erty; providing that
the rights and remedies set forth in this act are
available solely to the governmental entities
authorized by law to enforce municipal ordinances;
providing that a municipality that seeks to enf orce a
municipal code lien through the sa le 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 fo r a
municipal code lien; providing requirements for
filing a petition for judicial in rem foreclosure
when the property is subject to unpaid taxes;
providing notice requirements needed prior to a
judicial in rem foreclosure; providing for
codification; 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:
This act shall be known and may be cited as the "Municipal Code
Lien Enforcement Act of 202 3".
SECTION 2. NEW LAW A new section of law to be codifi ed
in the Oklahoma Statutes as Section 22 -141 of Title 11, unless there
is created a duplication in numbering, reads as follows:
As used in this act:
1. "Code enforcement director" means an employee of a
municipality who is tasked by the municipal governi ng body with the
enforcement of state law or local ordinances related to the
condition of real property within the jurisdiction of the
municipality;
2. "Interested party" means:
a. the person who last appe ars as owner of the real
property in the county re cords,
b. the current mortgagee of record of the property or
assignee of record of the mortgagee,
c. the current holder of a beneficial interest in a deed
of trust recorded against the real property,
d. a tax certificate holder, or
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e. any party having an i nterest in the real property, or
in any part thereof, legal or equitable, in severalty
or as tenant in common, whose identity and address are
reasonably ascertainable from the records of the
municipality or records maintained in the county
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 benef it of a utility easement which
burdens the real property;
3. "Minimum bid price" means the price that equals the
redemption amount;
4. "Municipal code lien" means any lien that has been levied
against real propert y by a municipality that is the result of the
nonpayment of any fine, penalty, abatement cost , or enforcement cost
incurred by a municipality related to the enforcement of state or
local housing and build ing codes. Such lien shall include only
those liens which arise out of a failure to comply w ith any law of
the State of Oklahoma, or from the failure to comply with a
municipality's ordinances or resolut ions.
A municipal code lien shall not include any li en that has
previously been certified to the tax col lector of the county for
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inclusion on the property tax bill associated with the real
property;
5. "Municipal code lien payoff " means the principal amou nt of a
municipal code lien, interest accrued at the rate of seven and one-
half percent (7.5%) per annum from the date the municipal code lien
was filed in the office of the county clerk, any fees or costs
incurred in the collection of such a lien under th is act including,
without limitations, the cost of t itle examinations and publication
of notices, and any other penalties allowable under either the laws
of the State of Oklahoma or under an ordinance or resolution enacted
by the municipality;
6. "Owner-occupied" means real property that is lawfully
occupied as a principal residence that is any of the follo wing:
a. a homestead as described in Sect ion 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 Statutes, and
c. eligible for the designations listed in subparagraph a
or b or this paragraph, 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:
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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 the municipality is seeking to foreclose
under this act;
8. "Taxes" means those taxes assessed aga inst real property by
either the State of Oklahoma, the county in which the real property
is situated, or the municipality 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 a lso include any taxes assessed
against real property that are unpaid from any previous year and any
amounts required for redemption. As provided in Se ction 3103 of
Title 68 of the Oklahoma Statutes, a lien for taxes shall be
superior to all other liens, i ncluding municipal code liens;
9. "Tax certificate holder" means any of the following:
a. a tax sale purchaser who 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, or
d. the purchaser or assignee of a tax lien certificate;
and
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10. "Tax payoff" means all amounts necessary to satisfy any
claims for delinquent taxes assessed against the real property on
which the municipality i s seeking foreclosure under this act. Those
amounts shall include:
a. if the taxes associated with the prope rty are
delinquent, but the property has not yet bee n sold for
taxes, the full amount of delinquent taxes, costs,
fees, and charges due to the coun ty tax collector,
b. if the property has been sold for taxes to either the
state or to a party other than the state, those
amounts required for redemption, excep t for when a
municipality is the prevailing bidder, th e tax payoff
amount shall be the lesser o f these amounts, and
c. if a tax lien has been sold by a county, the amount
required for redemption.
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:
A. The provisions of this act shall apply to any municipal
governing body that adopts the provisions of this a ct, and are
applicable to the collection of municipal code liens as to real
property, other than owner-occupied property, in the municipality.
B. The provisions of this act shall not apply to owner -occupied
property.
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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:
Notwithstanding any law to the contrary, any fees, penalties,
and abatement costs imposed ag ainst property other than owner -
occupied real property for violations of a municipality 's housing
and building codes adopted pursuant to the statutes of the State of
Oklahoma may be enforced in rem as a lie n in accordance with this
act.
Every municipal code lien, as defined in this act, shall be
superior to all other liens, except those liens for taxes described
or referenced in Section 3103 of Title 68 of the Oklahoma Statutes.
SECTION 5. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 22 -144 of Title 11, unless there
is created a duplicatio n 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 municipa lity to
enforce its municipal code liens.
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B. The ordinance or resolution of a municipality authorizing
and approving the use of this act shall include all of the
following:
1. The initial effective date for app lication of these
procedures;
2. The explicit exclusion of owner-occupied properties from the
application of the judicial in rem forec losure procedures authorized
in this act;
3. The nature and extent of notices, support services, and
referrals to be provided to the owners and occupants of owner -
occupied properties; and
4. Any other matters the municipality specifies to be addressed
through administrative regulations and policies.
C. Proceedings in accordance with this act are to solely
enforce the municipal code lien for real property subj ect 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 government al entities authorized by law to enforce
municipal ordinances and shall not extend to any nongove rnmental
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 thr ough the sale of
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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.
F. The enforcement proceedings authorized by this act may be
initiated only by the municipal ity.
SECTION 6. NEW LAW A new se ction of law to be codified
in the Oklahoma Statutes as Section 22-145 of Title 11, unless there
is created a duplication in numbering, reads as follo ws:
A. After a municipal code lien has been recor ded with the
office of the county clerk of the county in which the real property
is located, 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 -occupied 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 t he 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 com menced in accordance with this act,
the enforcement proceedings may be amended to include any
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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 t o
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,
the code enforcement director shall notify all other taxing agencies
within the jurisdiction of the municipality and the State of
Oklahoma of the code enforce ment director's intention to file a
petition for judicial in rem foreclosure of the real property on
which a municipal code lien exists.
C. In the name of the municipalit y, the code enforcement
director shall, in the appropriate lis pendens record in the office
of the county clerk of the county in which the real property is
located, file a notice of his or her intent t o file a judicial in
rem foreclosure action. The notice shall include a legal
description of the p roperty, street address of the property i f
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 le gal interests in the
property.
D. Simultaneous with the filing of his or her notic e of intent
to file a judicial in rem foreclosure action, the code enforcement
director, in the name of the municipa lity, shall file a petition
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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:
1. The identity of the municipality and the name and address of
the code enforcement director;
2. The real property add ress;
3. A description of the real property;
4. The tax identification number of the real property;
5. The municipal code lien which is being foreclosed;
6. The principal amount of the municipal code lien togeth er
with applicable interest and penalties ;
7. The principal amount of any additional municipal code liens
together with applicable interest and penalties in accordance with
this section, if any;
8. The year or years for which the taxes are delinquent, if
any;
9. The principal amount of the tax es together with interest and
penalties, if any;
10. A statement that upon final sale in accordance with this
act and payment of the amount due for taxes, if applicable, an
interested party's rights of redemption s hall be extinguished; and
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11. The names and addresses of all interested parties to whom
copies of the petition are to be sent in accordance with subs ection
F of this section.
F. The municipality shall mail copies of the petition by both
certified mail, return receipt requested, and by regular m ail to all
interested parties whose identities and addresses are reasonably
ascertainable. Copies of the pet ition shall also be mailed by
first-class mail to the real property address to the attention of
the occupants of the property, if any. 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 INFORMAT ION 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 of the code enforcement director;
2. The real property address;
3. A description of the real property;
4. The tax identification number of the real property;
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5. Any applicable municipal code lien which is being foreclosed
upon;
6. The principal amount of any municipal code lien together
with interest and penalties;
7. The applicable period of tax delinquency, if any;
8. The principal amount of taxes, if any;
9. That upon deposit with the appro priate parties by the court
of the tax payoff amo unt, if any, any and all rights of redemption
accorded to interested parties are extinguished ; and
10. The date and place of the filing of the petition .
SECTION 7. This act shall become eff ective November 1, 2023.
Passed the House of Representatives the 23rd day of March, 2023.
Presiding Officer of the House
of Representatives
Passed the Senate the ___ day of __________, 2023.
Presiding Officer of the Senate