To enact section 2323.08 of the Revised Code to require a mortgagee who is a plaintiff in a mortgage foreclosure action to keep the condition of certain real property in accordance with requirements of the state building and fire codes, and any applicable local codes, for the period of time between the judgment of foreclosure and the recording of the deed of the property.

Section 1. That section 2323.08 of the Revised Code be enacted to read as follows:

Sec. 2323.08. (A)(1) "Assistant state fire marshal" has the same meaning as "assistant fire marshal," as defined in section 3737.01 of the Revised Code.

(2) "Fire safety inspector" has the same meaning as in section 3737.01 of the Revised Code.

(3) "State inspector" means the superintendent of labor, an inspector employed by the division of labor within the department of commerce, the state fire marshal, an assistant state fire marshal, or a certified fire safety inspector.

(4) "Local inspector" means an individual who has the authority in a municipal corporation, township, or county, as applicable, to enforce any of the following:

(a) Local zoning codes;

(b) State and local building codes;

(c) Safety regulations;

(d) Health regulations.

(B) Except as provided in division (F) of this section, if a mortgagee is a plaintiff in a mortgage foreclosure action and if the mortgagee obtains a judgment of foreclosure pursuant to section 2323.07 of the Revised Code, the mortgagee or a designee of the mortgagee shall periodically monitor the real property that is the subject of the mortgage to determine whether the real property is the type of real property described in division (I) of this section. If the mortgagee or the mortgagee's designee determines that the real property is that type of real property, the mortgagee shall bring an action against the mortgagor of the real property in the court of common pleas of the county in which the real property is located to obtain possession of the real property for purposes of complying with division (D) of this section. If the mortgagee is successful in that action, the mortgagee shall be a mortgagee in possession of the real property. Nothing in this section shall be construed as extinguishing the right of redemption of the mortgagor under section 2329.33 of the Revised Code.

(C) If a state or local inspector determines that the real property is the type of real property described in division (I) of this section, and if the state or local inspector determines that a mortgagee described in division (B) of this section has not pursued an action described in that division, the state or local inspector may bring an action in a court of competent jurisdiction to require the mortgagee to bring an action described under division (B) of this section.

(D) Upon becoming a mortgagee in possession as described in division (B) of this section, the mortgagee in possession shall keep the condition of the real property in accordance with the requirements of the state residential or nonresidential building codes adopted pursuant to section 3781.10 of the Revised Code applicable to that real property, the state fire code adopted pursuant to section 3737.82 of the Revised Code, the local zoning code applicable to the real property, any local building code applicable to the real property, or any other similar safety or health regulation applicable to the real property, and shall remedy any violations with respect to those codes or regulations, until ownership of the real property has been transferred and the deed for the real property has been duly recorded pursuant to section 2329.36 of the Revised Code.

(E) A mortgagee described in division (B) of this section shall have the right to peaceably enter the real property to which division (I) of this section applies, or to cause others to peaceably enter the real property, for the limited purpose of inspections, repairs, and maintenance as required by this section or as ordered by a court. If the real property is occupied by a tenant, the mortgagee must provide notice to the tenant seven days in advance of the entry, unless emergency repairs are required, in which case reasonable notice shall be provided to the tenant.

A mortgagee that complies with division (D) of this section shall recover any costs incurred as a result of keeping the condition of the real property in accordance with the requirements of the applicable state residential or nonresidential building code, the state fire code, the applicable local building code, the applicable local zoning code, or the health and safety regulations, from the sale of the property in accordance with section 2329.21 of the Revised Code. If the mortgagor exercises the mortgagor's right of redemption under section 2329.33 of the Revised Code, the mortgagee may bring an action in a court of competent jurisdiction to recover those costs. The authority provided by this division shall be in addition to, and shall not diminish or reduce, any rights of the parties described under existing law against the mortgagor of property for failure to maintain the real property.

(F)(1) If a municipal corporation or other governmental entity holds a mortgage subordinate to one or more mortgages on the real property specified in division (I) of this section, the municipal corporation or other governmental entity shall not be subject to division (B) of this section.

(2) If the mortgagor of the real property commences a proceeding in bankruptcy court prior to the completion of the sale of the real property under execution or order of sale required by Chapter 2329. of the Revised Code, the duties created by this section shall be suspended during the pendency of the bankruptcy proceeding, or until an order has been entered in that proceeding lifting or removing the automatic stay of the foreclosure sale.

(3) A mortgagee shall be relieved of the mortgagee's responsibilities under this section for the period that a receiver of the real property is serving.

(G) Nothing in this section shall diminish in any way the obligations pursuant to any state or local law of the mortgagor of the real property specified in division (I) of this section, or a receiver of rents and profits appointed in an action to foreclose a mortgage, to maintain the real property prior to the recording of the deed pursuant to a foreclosure sale.

(H) This section shall not preempt, reduce, or limit any rights or obligations imposed by any local laws with respect to real property maintenance and the locality's ability to enforce those laws.

(I) This section applies to real property that is vacant, or becomes vacant after the issuance of a judgment of foreclosure pursuant to section 2323.07 of the Revised Code, or is abandoned by the mortgagor but occupied by a tenant.

Section 2. The General Assembly declares its intent in enacting section 2323.08 of the Revised Code pursuant to this act to respond to the issues raised in Hausman v. City of Dayton, 73 Ohio St.3d 671 (1995).