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(127th General Assembly)
(Substitute Senate Bill Number 277)
AN ACT
To enact sections 1901.185 and
3767.50 of the Revised
Code to create a new cause
of action in
foreclosure in the environmental division of a
municipal court to abate blighted parcels.
Be it enacted by the General Assembly of the State of Ohio:
SECTION 1. That sections 1901.185 and
3767.50 of the Revised
Code be enacted to read as follows:
Sec. 1901.185. In addition to jurisdiction otherwise granted
in this chapter, the environmental division, where
established,
of the municipal court shall have jurisdiction within
its
territory in all of the following actions or proceedings and
to
perform all of the following functions:
(A) To exercise exclusive original jurisdiction to hear
actions arising under section 3767.50 of the
Revised Code and in
those actions to make findings and orders pertaining to blighted
parcels;
(B) When in aid of execution of a judgment of the
environmental division of the municipal court rendered
pursuant
to section 3767.50 of the Revised Code, in actions for
the
foreclosure of a mortgage on real property given to secure the
payment of money, or the enforcement of a specific lien for money
or other encumbrance or charge on real property, when the real
property is situated within the territory, to foreclose all
liens
and
all vested and contingent rights, render
judgments,
and
make findings and orders, between the parties, in
the same
manner and to the same extent as in similar cases in the
court of
common pleas.
Sec. 3767.50. (A) For purposes of this section:
(1) "Blighted parcel" has the same meaning as in section 1.08
of the Revised Code.
(2) "Owner" means any of the following:
(a) The owner of record as shown on the current tax list of
the county auditor;
(b) A person who has a freehold or lesser estate in the
premises;
(c) A mortgagee in possession or vendee in possession who
evidences charge,
care, or control of the premises, including,
but not limited to, a
person to whom the sheriff has issued a
deed for the premises
after a judicial sale regardless of whether
the deed has been
recorded;
(d) A person who has charge, care, or control of the premises
as executor, administrator, assignee, receiver, trustee,
or legal
guardian;
(e) A person who holds the person's self out to be in charge,
care, or control of the premises as evidenced by the negotiation
of written or oral lease agreements for the premises, the
collection of rents for the premises, the performance of
maintenance or repairs on the premises, or the authorization of
others to perform maintenance or repairs on the premises.
(B)(1) A municipal corporation, in addition to any other
remedy
authorized by law, has a cause of action in the
environmental division of the municipal court to foreclose any
existing
liens upon a blighted parcel located in the municipal
corporation
provided that no other foreclosure action affecting
the blighted
parcel is being actively prosecuted in any court of
record. It is
an affirmative defense to an action under this
division that the
owner of the blighted parcel has not been in
default on any
mortgage on the property for twelve months or more
or that there
is a bankruptcy proceeding pending in which the
blighted parcel
has been listed as an asset. To maintain the
action, it is
not necessary for the
municipal corporation to
have
a lien of its
own upon the
property. Rather, it is
sufficient for
the municipal
corporation
to allege that,
because of the
continuing existence of
conditions causing the
property to be
a blighted parcel, the
owner
has defaulted on
the terms of any
agreement giving rise
to
a lien
for failure
to maintain the
property, and then to
marshal
and
plead for
foreclosure of any or
all outstanding
liens upon
the
blighted
parcel. Section 3767.50 of the Revised
Code does not
create a
cause of action regarding any property not
subject to a
lien.
The municipal
corporation shall not marshal a
lien held by
the
United States,
a lien held by this state other than a lien for
real property taxes and assessments, a lien held by a political
subdivision
other than itself,
or a lien vested by a tax
certificate held
under sections 5721.30
to 5721.43 of the
Revised Code. The
municipal corporation shall
join as a party to
the action a
lienholder whose lien is being
marshaled and shall
notify the
lienholder party that the municipal
corporation is
proceeding to
foreclose the lien under this section
and that the
lienholder
party may remediate the conditions of the parcel
constituting
blight. If a
lienholder party certifies to the
court that the
party will remediate the conditions of the parcel
constituting
blight within sixty days after
the party is served
with a copy of
the complaint of the foreclosure action, the
municipal
corporation shall move to dismiss the action.
In a judicial sale of a blighted parcel that is ordered as
a
result of the foreclosure action, the priority of distribution
of
the proceeds from the sale shall not be altered because the
municipal corporation marshaled and foreclosed on one or more
liens. Rather, proceeds from the sale shall be distributed
according to the priorities otherwise established by law.
(2) The environmental division of the municipal court has
exclusive original jurisdiction of an action under this section.
(C)(1) With respect to any blighted parcel that is or may
be
subject to an action under this section, the municipal
corporation may notify the taxing authority of each taxing unit in
which the blighted parcel is located that the municipal
corporation is proceeding to foreclose the lien under this
section. The notice shall state that the taxing authority may
preserve its claim on any distributions of delinquent or unpaid
taxes and assessments charged against the blighted parcel and
arising
from the judicial sale proceeds by responding in writing
to the
municipal corporation within a period of time to be
specified in
the notice. The written response shall be certified
by the taxing
authority or by the fiscal officer or other person
authorized by
the taxing authority to respond. If such a response
is received by
the municipal corporation within the specified
time, or if such a
notice is not provided, the taxing authority's
claim on
distributions of delinquent or unpaid taxes and
assessments
charged against the blighted parcel and payable from
proceeds of the
judicial sale shall be preserved and shall be
disposed of in the
priority and manner otherwise prescribed by
law. If such a notice
is provided and the response is not
received within the specified
time, the taxing authority's claim
on the delinquent or unpaid
taxes and assessments is
extinguished, the lien for such taxes is
satisfied and discharged
to the extent of that claim, and the
blighted parcel may be sold
at judicial sale free and clear of such lien
to that extent,
unless the successful bidder at the judicial sale
is a lienholder
of the blighted parcel. If the successful bidder is a
lienholder
of the blighted parcel, the lien for all delinquent or unpaid
taxes and assessments charged against the blighted parcel shall
continue
until discharged as otherwise provided by law.
(2) The taxing authority of a taxing unit and a municipal
corporation may enter into an agreement whereby the taxing
authority consents in advance to release the taxing authority's
claim on distributions of delinquent or unpaid taxes and
assessments charged against blighted parcels in the taxing
unit's
territory and waives its right to prior notice and response
under
division (C)(1) of this section. The agreement shall provide
for
any terms and conditions on the release of such claim as are
mutually agreeable to the taxing authority and municipal
corporation, including any option vesting in the taxing authority
the right to revoke its release with respect to any
blighted
parcel before the release becomes effective, and the manner in
which notice of such revocation shall be effected.
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