Bill Text: IA HF2318 | 2017-2018 | 87th General Assembly | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: A bill for an act relating to redemption by certain persons of parcels sold at tax sale. (Formerly HSB 605.) Effective 7-1-18.

Spectrum: Committee Bill

Status: (Passed) 2018-03-28 - Signed by Governor. H.J. 700. [HF2318 Detail]

Download: Iowa-2017-HF2318-Introduced.html

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House File 2318 - Introduced




                                 HOUSE FILE       
                                 BY  COMMITTEE ON JUDICIARY

                                 (SUCCESSOR TO HSB 605)

                                 (COMPANION TO SF 2166
                                     BY COMMITTEE ON
                                     JUDICIARY)

                                      A BILL FOR

  1 An Act relating to redemption by certain persons of parcels
  2    sold at tax sale.
  3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
    TLSB 5207HV (2) 87
    asf/rj

PAG LIN



  1  1    Section 1.  Section 445.1, Code 2018, is amended by adding
  1  2 the following new subsections:
  1  3    NEW SUBSECTION.  3A.  "Legal representative" means a parent,
  1  4 guardian, or conservator of a person with a legal disability, a
  1  5 person appointed by a court to act on behalf of a person with a
  1  6 legal disability, or a person acting on behalf of a person with
  1  7 a legal disability pursuant to a power of attorney.
  1  8    NEW SUBSECTION.  4A.  "Person with a legal disability" means
  1  9 a minor or a person of unsound mind.
  1 10    Sec. 2.  Section 447.7, Code 2018, is amended by striking the
  1 11 section and inserting in lieu thereof the following:
  1 12    447.7  Redemption by minors and persons of unsound mind.
  1 13    1.  If a parcel of a person with a legal disability is sold
  1 14 at tax sale and the county treasurer has not delivered the
  1 15 treasurer's deed, a legal representative of the person with the
  1 16 legal disability may redeem the parcel under sections 447.1 and
  1 17 447.3.
  1 18    2.  a.  If a parcel of a person with a legal disability is
  1 19 sold at tax sale and the county treasurer has delivered the
  1 20 treasurer's deed, the person with the legal disability or the
  1 21 person's legal representative may redeem the parcel at any
  1 22 time prior to one year after the legal disability is removed
  1 23 by bringing an equitable action for redemption in the district
  1 24 court of the county where the parcel is located, unless the
  1 25 action is required to be brought sooner in time by operation of
  1 26 subsection 3 or 4.
  1 27    b.  To establish the right to redeem, the person maintaining
  1 28 the action shall prove to the court that the owner of the
  1 29 parcel is a person with a legal disability entitled to redeem
  1 30 prior to the delivery of the treasurer's deed. If the legal
  1 31 disability has been removed, the person maintaining the action
  1 32 shall establish the date the disability was removed and explain
  1 33 the manner by which the legal disability was removed.
  1 34    c.  The person maintaining the action shall name as
  1 35 defendants all persons claiming an interest in the parcel
  2  1 derived from the tax sale, as shown by the record.
  2  2    d.  If the court determines that the person maintaining the
  2  3 action or the person's legal representative is entitled to
  2  4 redeem by virtue of legal disability or prior legal disability,
  2  5 the court shall so order. The order shall determine the
  2  6 rights, claims, and interests of all parties, including liens
  2  7 for taxes and claims for improvements made on or to the parcel
  2  8 by the person claiming under the tax title. The order shall
  2  9 establish the amount necessary to effect redemption. The
  2 10 redemption amount shall include the amount for redemption
  2 11 computed in accordance with section 447.1 or 447.3, whichever
  2 12 is applicable, including interest computed up to and including
  2 13 the date of payment of the total redemption amount to the clerk
  2 14 of court and the amount of all costs added to the redemption
  2 15 amount in accordance with section 447.13. In addition, if
  2 16 the person claiming under the tax title is determined by the
  2 17 court to have made improvements on or to the parcel after the
  2 18 treasurer's deed was issued, the court shall enter judgment in
  2 19 favor of the person claiming under the tax title for an amount
  2 20 equal to the value of all such improvements, and such judgment
  2 21 shall be a lien on the parcel until paid. The order shall
  2 22 direct that the person maintaining the action shall pay to the
  2 23 clerk of court, within thirty days after the date of the order,
  2 24 the total redemption amount the order sets forth.
  2 25    e.  Upon timely receipt of the payment, the court shall
  2 26 enter judgment declaring the treasurer's deed to be void and
  2 27 determining the resulting rights, claims, and interests of
  2 28 all parties to the action. In its judgment, the court shall
  2 29 direct the clerk of court to deliver the entire amount of the
  2 30 redemption payment to the person claiming title under the
  2 31 treasurer's deed.
  2 32    f.  If the person maintaining the action fails to timely
  2 33 deliver payment of the total redemption amount to the clerk of
  2 34 court, the court shall enter judgment holding that all rights
  2 35 of redemption of the person with a legal disability who brought
  3  1 the action, or on whose behalf the action was brought, are
  3  2 terminated and that the validity of the tax title or purported
  3  3 tax title is conclusively established as a matter of law
  3  4 against the claims of such person with a legal disability.
  3  5    3.  If a person with a legal disability remains in possession
  3  6 of the parcel after the recording of the treasurer's deed, and
  3  7 if the person claiming under the tax title properly commences
  3  8 an action to remove the person from possession, the person
  3  9 with a legal disability shall forfeit any rights of redemption
  3 10 that the person may have under this section, unless either of
  3 11 the following actions is timely filed by or on behalf of the
  3 12 person:
  3 13    a.  A counterclaim in the removal action asserting the
  3 14 redemption rights under subsection 2 of the person with a legal
  3 15 disability.
  3 16    b.  A separate action under subsection 2. Such action shall
  3 17 be filed within thirty days after the person with a legal
  3 18 disability and the person's legal representative were served
  3 19 with original notice in the removal action. If an action under
  3 20 subsection 2 is filed by or on behalf of the person with a legal
  3 21 disability within the thirty=day period, the court may order
  3 22 the action consolidated with the removal action.
  3 23    4.  If a person with a legal disability is not in possession
  3 24 of the parcel at the time of the recording of the treasurer's
  3 25 deed, the person or the person's legal representative is
  3 26 forever barred and estopped from commencing an action under
  3 27 this section if either of the following occurs:
  3 28    a.  An affidavit is filed pursuant to section 448.15 and
  3 29 claims adverse to the tax title are barred by section 448.16.
  3 30    b.  An action under subsection 2 is not brought within three
  3 31 years after the recording of the treasurer's deed.
  3 32    Sec. 3.  Section 447.8, subsection 1, Code 2018, is amended
  3 33 to read as follows:
  3 34    1.  a.  After the delivery of the treasurer's deed, a person
  3 35 entitled to redeem a parcel sold at tax sale shall do so only by
  4  1 an equitable action in the district court of the county where
  4  2 the parcel is located. The action to redeem may be maintained
  4  3 only by a person who was entitled to redeem the parcel during
  4  4 the ninety=day redemption period in section 447.12, except that
  4  5 such a person may assign the person's right of redemption or
  4  6 right to maintain the action to another person, or by a person
  4  7 entitled to redeem under section 447.7.
  4  8    b.  In order to establish the right to redeem, the person
  4  9 maintaining the action shall be required to prove to the court
  4 10 either that the person maintaining the action or a predecessor
  4 11 in interest was not properly served with notice in accordance
  4 12 with the requirements of sections 447.9 through 447.12, or that
  4 13 the person maintaining the action or a predecessor in interest
  4 14 acquired an interest in or possession of the parcel during
  4 15 the ninety=day redemption period in section 447.12. A person
  4 16 shall not be entitled to maintain such action by claiming that
  4 17 a different person was not properly served with notice of
  4 18 expiration of right of redemption, if the person seeking to
  4 19 maintain the action, or the person's predecessor in interest,
  4 20 if applicable, was properly served with the notice. A After
  4 21 the execution and delivery of the treasurer's deed, a person
  4 22 is not allowed to may only redeem a parcel sold for delinquent
  4 23 taxes in any other manner after the execution and delivery of
  4 24 the treasurer's deed under this section or section 447.7.
  4 25    Sec. 4.  Section 448.6, subsection 1, Code 2018, is amended
  4 26 to read as follows:
  4 27    1.  A deed executed by the county treasurer in conformity
  4 28 with the requirements of sections 448.2 and 448.3 shall
  4 29 be presumed to effect a valid title conveyance, and the
  4 30 treasurer's deed may be challenged only by an equitable action
  4 31 in the district court in the county in which the parcel is
  4 32 located.  If the action seeks an order of the court to allow
  4 33 redemption after delivery of the treasurer's deed because the
  4 34 person seeking to redeem is a person with a legal disability
  4 35 who was entitled to redeem prior to the delivery of the
  5  1 treasurer's deed, the action shall be brought in accordance
  5  2 with section 447.7. If the action seeks an order of the court
  5  3 to allow redemption after delivery of the treasurer's deed
  5  4 based on improper service of notice of expiration of right of
  5  5 redemption, the action shall be brought in accordance with
  5  6 section 447.8. If the action is not brought on that basis
  5  7  under section 447.7 or 447.8, the action shall be controlled by
  5  8 the provisions of this section.
  5  9    Sec. 5.  Section 448.16, subsection 3, Code 2018, is amended
  5 10 to read as follows:
  5 11    3.  An action to enforce a claim filed under subsection 1
  5 12 shall be commenced within sixty days after the date of filing
  5 13 the claim. The action may be commenced by the claimant, or
  5 14 a person under whom the claimant claims title, under either
  5 15  section 447.7, 447.8, or 448.6. If an action by the claimant,
  5 16 or such other person, is not filed within sixty days after the
  5 17 filing of the claim, the claim thereafter shall be forfeited
  5 18 and canceled without any further notice or action, and the
  5 19 claimant, or the person under whom the claimant claims title,
  5 20 thereafter shall be forever barred and estopped from having or
  5 21 claiming any right, title, or interest in the parcel adverse to
  5 22 the tax title or purported tax title.
  5 23                           EXPLANATION
  5 24 The inclusion of this explanation does not constitute agreement with
  5 25 the explanation's substance by the members of the general assembly.
  5 26    This bill relates to the mechanism by which minors or persons
  5 27 of unsound mind, or their legal representatives, who own real
  5 28 estate which was sold at a tax sale may redeem such parcels.
  5 29    The bill defines "legal representative" as a parent,
  5 30 guardian, or conservator of a person with a legal disability, a
  5 31 person appointed by a court to act on behalf of a person with a
  5 32 legal disability, or a person acting on behalf of a person with
  5 33 a legal disability pursuant to a power of attorney. The bill
  5 34 defines "person with a legal disability" as a minor or a person
  5 35 of unsound mind.
  6  1 Under current law, if a person with a legal disability is the
  6  2 owner of a parcel that is sold at a tax sale and the treasurer's
  6  3 deed has been delivered, the person with a legal disability
  6  4 may redeem the parcel at any time within one year after the
  6  5 disability is removed, in the manner specified in Code section
  6  6 447.8. Code section 447.8 specifies the manner of redemption
  6  7 by an owner who alleges a failure by the holder of the tax title
  6  8 to serve the parcel owner with notice of the tax sale and the
  6  9 parcel owner's redemption rights.
  6 10    The bill specifies the procedure by which a person with
  6 11 a legal disability can redeem a parcel sold at a tax sale
  6 12 after the delivery of the treasurer's deed. Before delivery
  6 13 of the treasurer's deed, the bill provides that the person
  6 14 with a legal disability or the person's legal representative
  6 15 may redeem under Code sections 447.1 and 447.3, which is the
  6 16 same as current law. After delivery of the treasurer's deed,
  6 17 the person with a legal disability or the person's legal
  6 18 representative must bring an equitable action for redemption in
  6 19 the district court of the county where the parcel is located
  6 20 and prove to the court that prior to the delivery of the
  6 21 treasurer's deed, the person with a legal disability or the
  6 22 person's legal representative was entitled to redeem by virtue
  6 23 of such disability. All persons claiming an interest in the
  6 24 parcel from the tax sale must be named as defendants. If the
  6 25 court determines that the person with a legal disability or the
  6 26 person's legal representative is entitled to redeem, the court
  6 27 will determine the rights, claims, and interests of all of the
  6 28 parties, and will establish the amount necessary to effect
  6 29 redemption. The person with a legal disability or the person's
  6 30 legal representative has 30 days after the date of the order
  6 31 to pay the redemption amount. Upon timely receipt of payment,
  6 32 the court shall declare the treasurer's deed to be invalid.
  6 33 If the person with a legal disability or the person's legal
  6 34 representative fails to timely deliver payment, such person's
  6 35 redemption rights are terminated.
  7  1 The action may be brought until one year after the disability
  7  2 is removed unless otherwise barred. The bill bars bringing
  7  3 the action if the person with a legal disability remained in
  7  4 possession of the parcel, the person claiming under the tax
  7  5 title properly commenced an action to remove the person with
  7  6 a legal disability, and the person with a legal disability
  7  7 or the person's legal representative fails to timely file
  7  8 a counterclaim or separate action asserting the right of
  7  9 redemption. The bill also bars the action if the person with
  7 10 a legal disability is not in possession of the parcel and the
  7 11 action is barred by Code section 448.16. Code section 448.16
  7 12 bars actions where the person claiming under tax title records
  7 13 an affidavit with the county recorder of the county where the
  7 14 parcel is located and a person with redemption rights fails to
  7 15 file a claim within 120 days after the filing of the affidavit.
  7 16 Finally, the bill bars the action if it is not filed within
  7 17 three years of the recording of the treasurer's deed.
       LSB 5207HV (2) 87
       asf/rj