As Reported by the House Civil and Commercial Law Committee

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 

Representative Hughes 

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 exercise exclusive original jurisdiction to hear 12
actions arising under section 3767.50 of the Revised Code and in 13
those actions to make findings and orders pertaining to blighted 14
parcels;15

       (B) When in aid of execution of a judgment of the 16
environmental division of the municipal court rendered pursuant 17
to section 3767.50 of the Revised Code, in actions for the 18
foreclosure of a mortgage on real property given to secure the 19
payment of money, or the enforcement of a specific lien for money 20
or other encumbrance or charge on real property, when the real 21
property is situated within the territory, to foreclose all liens 22
and all vested and contingent rights, render judgments, and 23
make findings and orders, between the parties, in the same 24
manner and to the same extent as in similar cases in the court of 25
common pleas.26

       Sec. 3767.50. (A) For purposes of this section:27

        (1) "Blighted parcel" has the same meaning as in section 1.08 28
of the Revised Code.29

       (2) "Owner" means any of the following:30

       (a) The owner of record as shown on the current tax list of 31
the county auditor;32

        (b) A person who has a freehold or lesser estate in the 33
premises;34

       (c) A mortgagee in possession or vendee in possession who 35
evidences charge, care, or control of the premises, including, 36
but not limited to, a person to whom the sheriff has issued a 37
deed for the premises after a judicial sale regardless of whether 38
the deed has been recorded;39

       (d) A person who has charge, care, or control of the premises 40
as executor, administrator, assignee, receiver, trustee, or legal41
guardian;42

       (e) A person who holds the person's self out to be in charge, 43
care, or control of the premises as evidenced by the negotiation 44
of written or oral lease agreements for the premises, the 45
collection of rents for the premises, the performance of 46
maintenance or repairs on the premises, or the authorization of 47
others to perform maintenance or repairs on the premises.48

       (B)(1) A municipal corporation, in addition to any other 49
remedy authorized by law, has a cause of action in the 50
environmental division of the municipal court to foreclose any 51
existing liens upon a blighted parcel located in the municipal 52
corporation provided that no other foreclosure action affecting 53
the blighted parcel is being actively prosecuted in any court of 54
record. It is an affirmative defense to an action under this 55
division that the owner of the blighted parcel has not been in 56
default on any mortgage on the property for twelve months or more 57
or that there is a bankruptcy proceeding pending in which the 58
blighted parcel has been listed as an asset. To maintain the 59
action, it is not necessary for the municipal corporation to 60
have a lien of its own upon the property. Rather, it is 61
sufficient for the municipal corporation to allege that, 62
because of the continuing existence of conditions causing the 63
property to be a blighted parcel, the owner has defaulted on 64
the terms of any agreement giving rise to a lien for failure 65
to maintain the property, and then to marshal and plead for 66
foreclosure of any or all outstanding liens upon the blighted 67
parcel. Section 3767.50 of the Revised Code does not create a 68
cause of action regarding any property not subject to a lien. 69
The municipal corporation shall not marshal a lien held by the 70
United States, a lien held by this state other than a lien for 71
real property taxes and assessments, a lien held by a political 72
subdivision other than itself, or a lien vested by a tax 73
certificate held under sections 5721.30 to 5721.43 of the 74
Revised Code. The municipal corporation shall join as a party to 75
the action a lienholder whose lien is being marshaled and shall 76
notify the lienholder party that the municipal corporation is 77
proceeding to foreclose the lien under this section and that the 78
lienholder party may remediate the conditions of the parcel 79
constituting blight. If a lienholder party certifies to the 80
court that the party will remediate the conditions of the parcel 81
constituting blight within sixty days after the party is served 82
with a copy of the complaint of the foreclosure action, the 83
municipal corporation shall move to dismiss the action.84

       In a judicial sale of a blighted parcel that is ordered as a 85
result of the foreclosure action, the priority of distribution of 86
the proceeds from the sale shall not be altered because the 87
municipal corporation marshaled and foreclosed on one or more 88
liens. Rather, proceeds from the sale shall be distributed 89
according to the priorities otherwise established by law.90

       (2) The environmental division of the municipal court has 91
exclusive original jurisdiction of an action under this section.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