As Passed by the Senate

127th General Assembly
Regular Session
2007-2008
Sub. S. B. No. 277


Senator Stivers 

Cosponsors: Senators Seitz, Miller, D., Kearney, Goodman, Schuring, Fedor, Harris, Mason, Miller, R., Mumper, Roberts, Sawyer, Cates 

A BILL
To enact sections 1901.185 and 3767.50 of the Revised 1
Code to create a new cause of action in 2
foreclosure in the environmental division of a 3
municipal court to abate blighted parcels. 4


BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

       Section 1. That sections 1901.185 and 3767.50 of the Revised 5
Code be enacted to read as follows: 6

       Sec. 1901.185.  In addition to jurisdiction otherwise granted 7
in this chapter, the environmental division, where established, 8
of the municipal court shall have jurisdiction within its 9
territory in all of the following actions or proceedings and to 10
perform all of the following functions:11

       (A) To hear actions arising under section 3767.50 of the 12
Revised Code;13

       (B) In any action authorized by section 3767.50 of the 14
Revised Code, the environmental division of the municipal court, 15
where established, shall exercise exclusive original jurisdiction 16
to make findings and orders pertaining to blighted parcels.17

       (C) When in aid of execution of a judgment of the 18
environmental division of the municipal court rendered pursuant 19
to section 3767.50 of the Revised Code, in actions for the 20
foreclosure of a mortgage on real property given to secure the 21
payment of money, or the enforcement of a specific lien for money 22
or other encumbrance or charge on real property, when the real 23
property is situated within the territory, and, in those cases, 24
the environmental division may proceed to foreclose all liens and 25
all vested and contingent rights and proceed to render judgments, 26
and make findings and orders, between the parties, in the same 27
manner and to the same extent as in similar cases in the court of 28
common pleas.29

       Sec. 3767.50. (A) For purposes of this section:30

        (1) "Blighted parcel" has the same meaning as in section 1.08 31
of the Revised Code.32

       (2) "Owner" means any of the following:33

       (a) The owner of record as shown on the current tax list of 34
the county auditor.35

        (b) A person who has a freehold or lesser estate in the 36
premises.37

       (c) A mortgagee in possession or vendee in possession who 38
evidences charge, care, or control of the premises, including, 39
but not limited to, a person to whom the sheriff has issued a 40
deed for the premises after a judicial sale regardless of whether 41
the deed has been recorded.42

       (d) A person who has charge, care, or control of the premises 43
as executor, administrator, assignee, receiver, trustee, or legal44
guardian.45

       (e) A person who holds the person's self out to be in charge, 46
care, or control of the premises as evidenced by the negotiation 47
of written or oral lease agreements for the premises, the 48
collection of rents for the premises, the performance of 49
maintenance or repairs on the premises, or the authorization of 50
others to perform maintenance or repairs on the premises.51

       (B) A municipal corporation, in addition to any other remedy 52
authorized by law, has a cause of action to foreclose any existing 53
liens upon a blighted parcel located in the municipal corporation 54
provided that no other foreclosure action affecting the blighted 55
parcel is being actively prosecuted in any court of record. It is 56
an affirmative defense to an action under this division that the 57
owner of the blighted parcel has not been in default on any 58
mortgage on the property for twelve months or more or that there 59
is a bankruptcy proceeding pending in which the blighted parcel 60
has been listed as an asset. The environmental division of the 61
municipal court has exclusive original jurisdiction of the 62
action. To maintain the action, it is not necessary for the 63
municipal corporation to have a lien of its own upon the 64
property. Rather, it is sufficient for the municipal corporation 65
to allege that, because of the continuing existence of 66
conditions causing the property to be a blighted parcel, the 67
owner has defaulted on the terms of any agreement giving rise 68
to a lien for failure to maintain the property, and then to 69
marshal and plead for foreclosure of any or all outstanding 70
liens upon the blighted parcel. Section 3767.50 of the Revised 71
Code does not create a cause of action regarding any property not 72
subject to a lien. The municipal corporation shall not marshal a 73
lien held by the United States, by this state, or by a political 74
subdivision other than itself, or a lien vested by a tax 75
certificate held under sections 5721.30 to 5721.43 of the 76
Revised Code. The municipal corporation shall join as a party to 77
the action a lienholder whose lien is being marshaled and shall 78
notify the lienholder party that the municipal corporation is 79
proceeding to foreclose the lien under this section and that the 80
lienholder party may remediate the conditions of the parcel 81
constituting blight. If a lienholder party certifies to the 82
court that the party will remediate the conditions of the parcel 83
constituting blight within sixty days after the party is served 84
with a copy of the complaint of the foreclosure action, the 85
municipal corporation shall move to dismiss the action.86

       In a judicial sale of a blighted parcel that is ordered as a 87
result of the foreclosure action, the priority of distribution of 88
the proceeds from the sale shall not be altered because the 89
municipal corporation marshaled and foreclosed on one or more 90
liens. Rather, proceeds from the sale shall be distributed 91
according to the priorities otherwise established by law.92

       (C)(1) With respect to any blighted parcel that is or may be 93
subject to an action under this section, the municipal 94
corporation may notify the taxing authority of each taxing unit in 95
which the blighted parcel is located that the municipal 96
corporation is proceeding to foreclose the lien under this 97
section. The notice shall state that the taxing authority may 98
preserve its claim on any distributions of delinquent or unpaid 99
taxes and assessments charged against the blighted parcel and 100
arising from the judicial sale proceeds by responding in writing 101
to the municipal corporation within a period of time to be 102
specified in the notice. The written response shall be certified 103
by the taxing authority or by the fiscal officer or other person 104
authorized by the taxing authority to respond. If such a response 105
is received by the municipal corporation within the specified 106
time, or if such a notice is not provided, the taxing authority's 107
claim on distributions of delinquent or unpaid taxes and 108
assessments charged against the blighted parcel and payable from 109
proceeds of the judicial sale shall be preserved and shall be 110
disposed of in the priority and manner otherwise prescribed by 111
law. If such a notice is provided and the response is not 112
received within the specified time, the taxing authority's claim 113
on the delinquent or unpaid taxes and assessments is 114
extinguished, the lien for such taxes is satisfied and discharged 115
to the extent of that claim, and the blighted parcel may be sold 116
at judicial sale free and clear of such lien to that extent, 117
unless the successful bidder at the judicial sale is a lienholder 118
of the blighted parcel. If the successful bidder is a lienholder 119
of the blighted parcel, the lien for all delinquent or unpaid 120
taxes and assessments charged against the blighted parcel shall 121
continue until discharged as otherwise provided by law.122

       (2) The taxing authority of a taxing unit and a municipal 123
corporation may enter into an agreement whereby the taxing 124
authority consents in advance to release the taxing authority's 125
claim on distributions of delinquent or unpaid taxes and 126
assessments charged against blighted parcels in the taxing unit's 127
territory and waives its right to prior notice and response under 128
division (C)(1) of this section. The agreement shall provide for 129
any terms and conditions on the release of such claim as are 130
mutually agreeable to the taxing authority and municipal 131
corporation, including any option vesting in the taxing authority 132
the right to revoke its release with respect to any blighted 133
parcel before the release becomes effective, and the manner in 134
which notice of such revocation shall be effected.135