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(123rd General Assembly)(Substitute House Bill Number 533)
AN ACT
To amend sections 5721.37, 5721.38, and 5721.39 of the Revised Code to
extend the time limit within which holders of tax certificates purchased
through private sales may request foreclosure, but retain the limit on the
accrual of interest on those certificates.
Be it enacted by the General Assembly of the State of Ohio:
SECTION 1 . That sections 5721.37, 5721.38, and 5721.39 of the Revised Code be
amended to read as follows:
Sec. 5721.37. (A)(1) With respect to a tax certificate purchased
under section 5721.32 of the Revised Code, at any time after one year from the
date shown on the tax certificate as the date the tax certificate was sold,
and not later than three years after that date, the certificate holder may
file with
the county treasurer a request for foreclosure on a form prescribed by
the tax commissioner and provided by the county treasurer,
provided the parcel has not yet been redeemed under division
(A) or (C) of section 5721.38 of the Revised
Code. (2) With respect to a tax certificate purchased under section 5721.33
of the Revised Code, at any time after one year from the date shown on the tax
certificate as
the date the tax certificate was sold, and not later than three
six years after
that date or any extension of that date pursuant to division (C)(2) of
section 5721.38 of the Revised Code, a private attorney on behalf of the
certificate holder
may file with the county treasurer a notice of intent to foreclose on a form
prescribed by the tax commissioner and provided by the county treasurer,
provided the parcel has not yet been redeemed under division (A) or
(C) of section 5721.38 of the Revised Code. (B) Along with a request filed under division (A)(1) of
this section, or a notice of intent to foreclose filed under division
(A)(2) of this section and prior to the transfer of title in
connection with foreclosure proceedings filed under division
(F) of
this section, the certificate holder shall
submit a payment to the treasurer equal to the sum of the
following: (1) The certificate redemption prices of any other prior tax
certificates that have been sold on the parcel; (2) Any prior delinquent taxes, assessments, penalties,
interest, and charges that are charged against the certificate parcel that is
the subject of the foreclosure proceedings and that are not
covered by a tax certificate; (3) If the foreclosure proceedings are filed by the county prosecuting
attorney pursuant to section 323.25, 5721.14, or 5721.18 of the Revised Code, a fee in the
amount prescribed by the county
prosecuting attorney to cover the prosecuting attorney's
legal costs incurred in the foreclosure proceeding; (4) If the foreclosure proceedings are filed by a private attorney on
behalf of the certificate holder pursuant to division (F) of this
section, any other prior liens. (C)(1) With respect to a certificate purchased under section
5721.32 of the Revised Code, if the certificate parcel has not been redeemed,
the county
treasurer shall
provide
certification to the county prosecuting attorney that the parcel has not
been redeemed and that the certificate holder has made a foreclosure request.
Within ninety days of receiving that
certification, the prosecuting attorney shall commence a foreclosure
proceeding in the name of the county treasurer in the manner provided under
section 323.25, 5721.14, or 5721.18 of the Revised Code, to foreclose the lien
vested in the certificate holder by the certificate. The prosecuting attorney
shall attach to the complaint the county treasurer's
certification that the parcel has not been redeemed. (2) With respect to a certificate purchased under section 5721.33 of the
Revised Code, if
the certificate parcel has not been redeemed, the county treasurer shall
provide certification to the private attorney that the parcel has not been
redeemed. After receipt of that certification, the private attorney may
commence a foreclosure proceeding in the name of the certificate holder in the
manner provided under division (F) of this section, to
foreclose the
lien vested in the certificate holder by the certificate. The private
attorney shall attach to the complaint the county treasurer's certification
that the parcel has not been redeemed. (D) The county treasurer
shall credit the amount received under division
(B)(1) of this section to the
tax certificate redemption fund. The tax certificates
respecting the payment shall be redeemed as provided in division
(E) of section 5721.38 of the
Revised Code. The amount received
under division (B)(2) of this
section shall be distributed to the taxing districts to which
the delinquencies are owed. The treasurer shall deposit the
fee received under division
(B)(3) of this section in the county treasury to the
credit of the delinquent tax and assessment collection fund. The amount
received under division
(B)(4) of this section shall be distributed to the holder of the
prior lien. (E)(1) If, in the case of a certificate purchased under section
5721.32 of the Revised Code, the certificate holder does not file with the
county
treasurer a request
for foreclosure along with the required payment
within three years after the date
shown on the tax certificate as the date the certificate was sold, and during
that period the parcel is not redeemed or foreclosed upon, the certificate
holder's lien against the parcel for the amount of delinquent taxes,
assessments, penalties, interest, and charges that make up the certificate
purchase price is canceled. (2)(a) If, in the case of a certificate purchased under
section 5721.33 of
the Revised Code,
the certificate holder does not file with the county treasurer a notice of
intent to foreclose with respect to a certificate parcel within three
six years
after the date shown on the tax certificate as the date the certificate was
sold or any extension of that date pursuant to division (C)(2) of
section 5721.38 of the Revised Code, and during that period the parcel is not
redeemed, the
certificate holder's lien against the parcel for the amount of delinquent
taxes, assessments, penalties, interest, and charges that make up the
certificate purchase price is canceled, subject to division
(E)(2)(b) of this section. (b) In the case of any tax certificate purchased under section
5721.33 of the Revised Code prior to the effective date of this amendment, the county
treasurer, upon application by the certificate holder, may sell to the
certificate holder a new certificate
extending the three-year
period
prescribed by division (e)(2) of this section, as that division
existed prior to that effective date, to six years after the date shown on the
original certificate as the
date it was sold or any extension of that date. The county treasurer and the
certificate holder shall negotiate the premium, in cash, to be paid for the
new certificate sold under this
section. if the county treasurer and certificate holder do not negotiate a
mutually acceptable premium, the
county treasurer and certificate holder may agree to engage a
person experienced in the valuation of financial assets to
appraise a fair premium for the new certificate. The certificate
holder has the option to purchase the new certificate for the fair
premium so appraised. Not less than one-half of the fee of the
person so engaged shall be paid by the certificate holder
requesting the new certificate; the remainder of the fee shall be
paid from the proceeds of the sale of the new certificate. If the
certificate holder does not purchase the new certificate for the
premium so appraised, the certificate holder shall pay the entire
fee. The county treasurer shall credit the remaining proceeds
from the sale to the items of taxes, assessments, penalties,
interest, and charges in the order in which they became due. A certificate issued under
this division vests in the certificate holder
and its secured party, if any, the same rights, interests,
privileges, and immunities as are vested by the original
certificate under sections 5721.30 to 5721.41 of the Revised Code,
except that interest payable under division (B) of section 5721.38 or
division (B) of section 5721.39 of the Revised Code shall be subject to the
amendments to those divisions by Sub.
H.B. 533 of the 123rd general assembly.
The
certificate shall be issued in the same form as the form prescribed for the
original certificate issued except for any modifications necessary, in the
county
treasurer's discretion, to reflect the
extension under this division of the certificate holder's lien to
six years after the date shown on the original certificate as the
date it was sold or any extension of that date. The certificate
holder may record a certificate issued under division
(e)(2)(b) of
this section or memorandum thereof as provided in division (b) of
section 5721.35 of the Revised Code, and the county recorder shall
index the certificate and record any subsequent cancellation of the lien as
provided in that section. The sale of a certificate
extending the lien under division (e)(2)(b) of this
section does
not impair the right of redemption of the owner of record of the certificate
parcel or of any other person entitled to
redeem the property. (F) With respect to tax certificates purchased under section
5721.33 of the Revised Code, upon the delivery to the certificate holder by
the county
treasurer of the certification provided for under division (C)(2) of
this section, a private attorney may institute a foreclosure proceeding under
this division in the name of the certificate holder to foreclose such holder's
lien, in any court with jurisdiction, unless the certificate redemption price
is paid prior to the time a complaint is filed. The attorney shall prosecute
the proceeding to final judgment and satisfaction, whether through sale of the
property or the vesting of title and possession in the certificate holder. If
there is a copy of a written undertaking under section 323.31 of the Revised
Code attached to
the tax certificate or if a copy of such an undertaking is received from the
county treasurer prior to the commencement of the proceeding under this
division, the attorney shall not institute the proceeding under this division,
unless the attorney receives a certification of the treasurer that such
undertaking has become void in accordance with section 323.31 of the Revised Code. The foreclosure proceedings under this division, except as otherwise
provided in this division, shall be instituted and prosecuted in the same
manner as is provided by law for the foreclosure of mortgages on land, except
that, if service by publication is necessary, such publication shall be made
once a week for three consecutive weeks and the service shall be complete at
the expiration of three weeks after the date of the first publication. Any notice given under this division shall include the name of the owner of
the parcel as last set forth in the records of the county recorder, the
owner's last known mailing address, the address of the subject parcel if
different from that of the owner, and a complete legal description of the
subject parcel. In any county that has adopted a permanent parcel number
system, such notice may include the permanent parcel number in addition to a
complete legal description. It is sufficient, having been made a proper party to the foreclosure
proceeding, for the certificate holder to allege in such holder's complaint
that the tax certificate has been duly purchased by the certificate holder,
that the certificate redemption price appearing to be due and unpaid is due
and unpaid, and that there is a lien against the property described in the tax
certificate, without setting forth in such holder's complaint any other
special
matter relating to the foreclosure proceeding. The prayer of the complaint
shall be that the court issue an order that the property be sold by the
sheriff or, if the action is in the municipal court, by the bailiff, in the
manner provided in section 5721.19 of the Revised Code, unless the complaint includes an
appraisal by an independent appraiser acceptable to the court that the value
of the certificate parcel is less than the certificate purchase price. In
that case, the prayer of the complaint shall be that fee simple title to the
property be transferred to and vested in the certificate holder free and clear
of all subordinate liens. In the foreclosure proceeding, the certificate holder may join in one
action any number of tax certificates relating to the same owner, provided
that all parties on each of the tax certificates are identical as to name and
priority of interest. However, the decree for each tax certificate shall be
rendered separately and any proceeding may be severed, in the discretion of
the court, for the purpose of trial or appeal. The court shall make such
order for the payment of all costs related directly or indirectly to the
redemption of the tax certificate, including, without limitation, attorney's
fees of the holder's attorney, as is considered proper. The tax certificate
purchased by the certificate holder is presumptive evidence in all courts and
in all proceedings, including, without limitation, at the trial of the
foreclosure action, of the amount and validity of the taxes, assessments,
charges, penalties by the court and added to such principal amount, and
interest appearing due and unpaid and of their nonpayment. (G) For the purposes of this section: (1) "Prior tax certificates" and "prior delinquent taxes, assessments,
penalties, interest, and charges" mean tax certificates and delinquent taxes,
assessments, penalties, interest, and charges, the liens with respect to which
attached to the certificate parcel prior to the attachment of the lien with
respect to the tax certificate that is the subject of the foreclosure
proceedings. (2) "Prior liens" means liens that are prior in right to the lien with
respect to the tax certificate that is the subject of the foreclosure
proceedings. Sec. 5721.38. (A) At any time prior to the
commencement of foreclosure proceedings under section 5721.37 of the
Revised Code by the submitting of the payment to the
county treasurer by the certificate holder under division (B) of that
section, the owner of record of the
certificate parcel, or any other person entitled to redeem that
parcel, may redeem the parcel by paying to the county treasurer
an amount equal to the total of the certificate redemption prices
of all tax certificates respecting that parcel plus the sum of
taxes, assessments, penalties, charges, and interest charged against the
parcel that have become due and payable since the date the
last certificate was sold. (B) At any time after the commencement of foreclosure
proceedings under section 5721.37 of the Revised
Code by the submitting of the payment to the county treasurer by the
certificate holder under division (B) of that section and
prior to the filing of the entry of confirmation
of sale of a certificate parcel under foreclosure proceedings filed by the
county prosecuting attorney or
prior to the decree conveying title to the certificate holder as provided for
in division (F) of section 5721.37 of the Revised Code, the
owner of record of the
certificate parcel or any other person entitled to redeem that
parcel may redeem the parcel by paying to the county treasurer
the sum of the following amounts: (1) The amount described in division (A) of this section plus
interest; (2) Interest on the certificate purchase price for each tax
certificate sold respecting the
parcel at the rate of eighteen per cent per year for the period beginning on
the day on which the payment was submitted by the certificate holder,
together with an
and ending on the day the parcel is redeemed under this division,
except that such interest shall not accrue for more than three years
after the day the certificate was purchased if the certificate holder
did not submit payment under division (B) of section 5721.37 of the Revised Code
before the end of that three-year period; (3) An amount equal to the
sum of the prosecuting attorney's fee under division (C)(1) of
section 5721.37 of the Revised Code if the tax certificate was purchased under
section 5721.32 of the Revised Code, and any; (4) Any other costs and fees of the proceeding allocable to the
certificate parcel as determined by the court. (C)(1) During the period beginning on the date a tax certificate
is sold under section 5721.32 of the Revised Code and ending one year from
that date, the
owner of record
of the certificate parcel, or any other person entitled to
redeem that parcel, may enter into a redemption payment plan
with the county treasurer. The plan shall require the owner or
other person to pay the certificate redemption price for the tax
certificate in installments, with the final installment due no
later than one year after the date the tax certificate is
sold. (2) During the period beginning on the date a tax certificate is sold
under section 5721.33 of the Revised Code and ending on the date the decree is
rendered on
the foreclosure proceeding under division (F) of section 5721.37
of the Revised Code, the owner of record of the certificate parcel, or any
other person
entitled to redeem that parcel, may enter into a redemption payment plan with
the certificate holder and all secured parties of the certificate holder. The
plan shall require the owner or other person to
pay the certificate redemption price for the tax certificate, an
administrative fee not to exceed one hundred dollars per year, and the actual
fees and costs incurred, in installments, with the final installment due no
later than three years after the date the tax certificate is sold. The
certificate holder shall give written notice of the plan to the applicable
county treasurer within sixty days after entering into the plan and written
notice of default under the plan within ninety days after the default. If
such a plan is entered into, the time period for filing a notice of intent to
foreclose under section 5721.37 of the Revised Code is extended by the length
of time the plan is in effect and not in default. (D)(1) Immediately upon receipt of full payment
under division (A) or (B) of this section, the
county treasurer shall make an entry to that effect in the tax certificate
register and notify each
certificate holder by certified mail, return receipt requested,
that the parcel has been redeemed and the lien canceled and that the tax
certificates may be redeemed. The
county treasurer shall deposit into the tax certificate redemption fund
created in the county treasury an amount equal to the total of
the certificate redemption prices, together with interest on the certificate
purchase price for each tax certificate sold respecting the parcel at the rate
of eighteen per cent per year paid under division (B) of this section
for the period beginning when the payment was submitted by the certificate
holder under division (B) of section 5721.37 of the Revised Code and ending when the
parcel was redeemed. The county treasurer shall administer the
fund for the purpose of redeeming tax certificates. Interest earned on the
fund shall be credited to the county general fund. (2) If a redemption payment plan is entered into pursuant to
division (C)(1) of this section, the county treasurer
immediately shall notify each certificate holder by certified
mail, return receipt requested, of the terms of the plan. Installment
payments made pursuant to the plan shall be deposited in the tax certificate
redemption fund. Any overpayment of
the installments shall be refunded to the person responsible for causing the
overpayment if the person applies for a refund under this section.
If the person responsible for causing the overpayment fails to apply for
a refund under this section within five years from the date the plan is
satisfied, an amount equal to the overpayment shall be
deposited into the general fund of the county. Upon satisfaction of the plan, the county
treasurer shall indicate in the tax
certificate register that the plan has been satisfied, and shall
notify each certificate holder by certified mail, return receipt
requested, that the plan has been satisfied and that tax
certificates may be redeemed. If a plan becomes void, the county treasurer
immediately shall notify each certificate holder by certified
mail, return receipt requested. If a certificate holder files a request for
foreclosure under section 5721.37 of the Revised Code, upon the confirmation of sale
resulting from the foreclosure, any money paid under the
plan prior to its becoming void shall be applied to
payment as prescribed under divisions (A), (B),
and (C) of section 5721.39 of the Revised
Code. Any residue remaining after such payment shall be
disposed of under section 5721.20 of the Revised
Code. (E) To redeem a tax certificate with respect to which payment has
been made in full under division (A), (B), or
(C)(1)
of this section, the
certificate holder shall present the tax certificate to the
county treasurer, who shall prepare the redemption information. Upon
presentation, the county auditor shall draw
a warrant on the tax certificate redemption fund in the amount of the
certificate redemption price. For a parcel that was redeemed under division
(B) of this section, the
certificate holder who paid the amounts under division
(B) of section 5721.37 of the Revised
Code shall be reimbursed for
those amounts, together with interest at the rate of eighteen
per cent per year on the amount paid under division
(B)(1) of that section for the
period beginning when the payment was submitted by the certificate holder
under division (B) of that section and
ending when the parcel was redeemed. The treasurer
shall mark all copies of the tax
certificate "redeemed" and return the certificate to the certificate holder.
The canceled certificate shall serve as a receipt evidencing
redemption of the tax certificate. If a certificate holder fails to
redeem a tax certificate within five years after notice is served
under division (D) of this section that tax certificates may be
redeemed, an amount equal to
the certificate redemption price shall be deposited into the general fund of
the county. Sec. 5721.39. In its judgment of foreclosure rendered
with respect to actions filed pursuant to section 5721.37 of the
Revised Code, the court shall enter a finding
with respect to the certificate parcel of the amount of the sum of the
certificate redemption prices respecting all the tax certificates sold against
the parcel; interest on the certificate purchase
prices of those certificates at the rate of eighteen per cent per year for the
period beginning on the day on which the payment was submitted by the
certificate holder under division (B) of section 5721.37 of the Revised Code;
any
delinquent
taxes, assessments, penalties, interest, and charges on the parcel that are
not covered by a tax certificate; and fees and costs incurred in the
foreclosure proceeding instituted against the parcel, including, without
limitation, the fees and costs of the
prosecuting
attorney represented by the fee paid under division (B)(3) of
section 5721.37 of the Revised Code
or the fees and costs of the private attorney representing the certificate
holder, and charges paid or incurred in procuring title searches and
abstracting services relative to the subject premises. The court may order
the certificate parcel to be sold,
without appraisal, in the manner provided for in division (F) of
section 5721.37 of the Revised Code and as set forth in the prayer of the
complaint, for not
less than the amount of its finding, or, in the event that the court finds
that the value of the certificate
parcel is less than the certificate purchase price, the court may, as prayed
for in the complaint, issue a decree transferring fee simple title free and
clear of all subordinate liens to the certificate holder. A decree of the
court transferring such fee simple title to the certificate holder is forever
a bar to all rights of redemption with respect to the certificate parcel. Each certificate parcel shall be advertised and sold by
the officer to whom the order of sale is directed in the manner
provided by law for the sale of real property on execution. The
advertisement for sale of certificate parcels shall be published
once a week for three consecutive weeks and shall include the
date on which a second sale will be conducted if no bid is
accepted at the first sale. Any number of parcels may be
included in one advertisement. Whenever the officer charged to
conduct the sale offers a certificate parcel for sale and no bids
are made equal to at least the amount of the court's finding,
the officer shall adjourn the sale of the parcel to the second date that was
specified in the advertisement of sale. The second sale
shall be held at the same place and commence at the same time as
set forth in the advertisement of sale. The officer shall offer
any parcel not sold at the first sale. Upon the conclusion of
any sale, or if any parcel remains unsold after being offered at
two sales, the officer conducting the sale shall report the
results to the court. Upon the confirmation of a sale, the proceeds of the
sale shall be applied as follows: (A) The fees and costs incurred in the proceeding filed
against the parcel pursuant to section 5721.37 of the
Revised Code, not including the county prosecutor's costs
covered by the fee paid by the certificate holder under division
(B)(3) of that section, shall be paid first. (B) Following the payment required by division
(A) of this section, the certificate holder that requested the
foreclosure shall be paid the sum of the following amounts: (1) The sum of the amount found due for the
certificate redemption prices of all the tax certificates sold against the
parcel; any (2) Any premium paid by the certificate holder at the time of
purchase;
interest (3) Interest on the certificate purchase prices
of those certificates at the rate of eighteen per cent per year beginning on
the day on which the payment was submitted by the certificate holder under
division (B) of section 5721.37 of the Revised Code and ending on the day of
the sale, except that such interest shall not accrue for more than
three years after the day the certificate was purchased if the certificate
holder did not submit that payment before the end of that three-year
period; and the (4) The amounts paid by the certificate holder under
divisions (B)(2) and (3) of section 5721.37 of the Revised Code. (C) Following the payment required by division
(B) of this section, any amount due for taxes,
assessments, charges, penalties, and interest not covered by the tax
certificate holder's payment under division (B)(2) of section 5721.37
of the Revised Code shall be paid, including all taxes, assessments, charges, penalties, and
interest payable subsequent to the entry of the finding and prior
to the transfer of the deed of the parcel to the purchaser
following confirmation of sale. If the proceeds available for
distribution pursuant to this division are insufficient to pay
the entire amount of those taxes, assessments, charges,
penalties, and interest, the proceeds shall be paid to each
claimant in proportion to the amount of those taxes, assessments,
charges, penalties, and interest that each is due, and those
taxes, assessments, charges, penalties, and interest are deemed
satisfied. Any residue of money from proceeds of the sale shall be
disposed of as prescribed by section 5721.20 of the
Revised Code. Unless the parcel previously was redeemed pursuant to
section 5721.25 or 5721.38 of the Revised Code,
upon the filing of the entry of confirmation of sale, the title
to the parcel is incontestable in the purchaser and is free and
clear of all liens and encumbrances, except a federal tax lien
notice of which is properly filed in accordance with section
317.09 of the Revised Code prior to the date that
a foreclosure proceeding is instituted pursuant to section
5721.37 of the Revised Code, which lien was foreclosed in
accordance with 28 U.S.C.A. 2410(c), and the easements and
covenants of record running with the land or lots that were
created prior to the time the taxes or assessments, for the
nonpayment of which a tax certificate was issued and the parcel
sold at foreclosure, became due and payable. The title shall not be invalid because of any
irregularity, informality, or omission of any proceedings under
this chapter, or in any processes of taxation, if such
irregularity, informality, or omission does not abrogate the
provision for notice to holders of title, lien, or mortgage to,
or other interests in, such foreclosed parcels, as prescribed in
this chapter. SECTION 2 . That existing sections 5721.37, 5721.38, and 5721.39 of the Revised
Code are hereby repealed.
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