ENGROSSED HOUSE
BILL NO. 1689	By:	Russ and Sullivan of the House

			   and

		Jolley of the Senate

An Act relating to mortgages; providing for court proceeding in certain foreclosure actions; specifying certain conditions and risks; requiring sheriff to make certain inspection of property; requiring sheriff post or serve notice of hearing; providing for compensation of sheriff; requiring return of inspection be mailed; specifying information to be included in inspection document; providing for notice publication; specifying information to be included in motion; setting time for hearing; directing testimony to be given at hearing; providing guidelines for court; requiring inventory of personal property; authorizing plaintiff to take possession and secure property; providing for procedure to vacate or set aside order at any time; specifying order shall not alter other rights or remedies for the parties; providing for codification; and providing an effective date.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     NEW LAW     A new section of law to be codified in the Oklahoma Statutes as Section 302 of Title 46, unless there is created a duplication in numbering, reads as follows:
A.  Upon commencement of a suit, action or proceeding to foreclose or otherwise enforce the remedies in any mortgage, contract for deed or deed of trust in a court of competent jurisdiction, if the plaintiff mortgagee believes, knows, or has reason to know, that the subject property is abandoned or vacated and, as a result of such abandonment:
1.  Physical deterioration and devaluation of the property is occurring or has occurred;
2.  There exists a risk to the health, safety or welfare of the public, or any adjoining or adjacent property owners, due to potential or actual acts of vandalism, loitering, criminal conduct or the physical destruction or deterioration of the property; or
3.  There exists a risk of additional legal process for violation of law, ordinance, unpaid taxes or accrual of liens, 
the plaintiff mortgagee may seek a court order to protect and preserve the property pending the disposition of the suit, action or proceeding before the court.
B.  A motion to protect and preserve an abandoned or vacated property subject to a suit, action or proceeding to foreclose or otherwise enforce the remedies in the mortgage, contract for deed or deed of trust shall be filed and heard in accordance with court rules and statutory civil procedures for motions.  The court shall not deny a plaintiff mortgagee an order to protect and preserve a property subject to foreclosure or enforcement of remedies in the mortgage, contract for deed or deed of trust, unless the defendant named in the litigation appears in person or through legal counsel at the motion hearing and demonstrates to the satisfaction of the court that the subject property is not abandoned or vacated, and is not at risk of deterioration, devaluation, or additional legal process.  Further, the defendant shall satisfy the court that the defendant personally, or by a designated representative, agrees to and is capable of protecting and preserving the property during the pending litigation before the court.
C.  The plaintiff mortgagee, after filing a motion to protect and preserve property in the pending litigation before the court, and having received from the court a date, time and location to hear the motion, shall present a certified copy of the motion and hearing notice to the sheriff in the county in which the property is located.  The sheriff, upon receiving a written request to post a motion and hearing notice on a property within the sheriff's jurisdiction, shall within three (3) days of the receipt of such request physically inspect the subject property and determine whether or not the property is abandoned or occupied.  At the time of the physical inspection of the property, the sheriff shall either post a copy of the motion and hearing notice in a conspicuous place on the property or shall physically serve an occupant of the property as required by the provisions of this section.  The sheriff shall receive a sheriff's service fee for the inspection and may designate a deputy or reserve deputy to perform the inspection and posting or service specified in this section.
D.  Upon physical inspection, if the sheriff determines the property to be abandoned or vacated, the sheriff shall post the required motion and hearing notice on the property and make a return of inspection and posting to the plaintiff mortgagee at the address provided by the plaintiff mortgagee.  In the event the property is occupied or appears to be occupied in the judgment of the sheriff, the sheriff shall attempt actual service of the motion and hearing notice on an occupant of the property as provided for service of summons, and if a person is not available to accept service or cannot be found, the sheriff shall post the motion and hearing notice in a conspicuous place on the property and make a written return of inspection and service to the plaintiff mortgagee at the address provided by the plaintiff mortgagee.
E.  The sheriff's written return of inspection and posting or return of inspection and service shall be made within three (3) days of the date of actual inspection.  The return shall be deposited into the regular U.S. mail, postage prepaid, and the return document shall certify that:
1.  The motion and hearing notice was either served in person upon an occupant of the property or physically posted on the property and the exact date of service or posting;
2.  A physical inspection and observation of the property was conducted; and
3.  In the best judgment and belief of the sheriff, or designee, the property was abandoned and vacated or occupied by the defendant mortgagor or a lawful tenant or other person, and any reason or belief for that determination.
F.  The posting of the motion and hearing notice shall be deemed proper service and sufficient notice to the defendant mortgagor and all occupants of the property for purposes of holding the hearing and authorizing the court to issue an order to protect and preserve the property pending disposition of the litigation before the court.  The court shall not require any additional or alternative notification to the defendant mortgagor or any occupant.  Nothing shall prohibit the plaintiff mortgagee from notifying, or attempting to notify, the defendant mortgagor or any potential occupant of the subject property in another manner.  If the plaintiff mortgagee elects notification by publication in addition to the posting required by this section, a copy of the motion and hearing notice shall be published at least twice in the fifteen-day period immediately preceding the hearing date in a publication of general circulation in the jurisdiction in which the property is located.  A copy of the motion and hearing notice shall be sent or delivered to the defendant's legal counsel of record.
G.  The motion posted or served shall be in the form and style recognized for pleadings filed in the official court case, and shall contain the name of the parties, court case number, the date, time and place of the hearing, and a statement directing the defendant mortgagor or any occupant of the property to appear in person, or through legal counsel, or be deemed to have abandoned and vacated the property.
H.  No hearing shall be held on a motion to protect and preserve the property subject to a suit, action or proceeding to foreclose or enforce remedies in the mortgage, contract for deed or deed of trust, unless at least fifteen (15) days have passed from the date of posting or service of the motion and hearing notice.  At the hearing, the court shall hear testimony of the parties present, including any person who claims to be an occupant or tenant of the property and who is not a named litigant in the pending litigation before the court.  The testimony shall include inquiry into the property's previous and current condition and the reasons or beliefs supporting or objecting to a determination that the property is abandoned or vacated.  The court shall review the sheriff's written return of inspection and posting or the return of inspection and service.  The court shall not require the presence of the defendant mortgagor or defendant's legal counsel before granting an order authorizing the plaintiff mortgagee to take action to protect and preserve the subject property pending the disposition of the litigation before the court.
1.  If the defendant mortgagor, or an occupant or tenant, appears in person or through legal counsel, and the court is satisfied that the defendant, or other person, is physically residing in the property, or if not occupying the property is willing and able to properly protect and preserve the property pending the litigation before the court, the motion shall be denied.  However, the court shall enter an order requiring the person to protect and preserve the property under such conditions as the court may determine.  Failure of the person to comply with the court order to protect and preserve the property shall be contempt of court.
2.  If the defendant mortgagor, or an occupant or tenant, fails to appear in person, and there exists no compelling reason why the defendant mortgagor, or person, could not appear in person, and the property appears to be deteriorating or at risk of deteriorating as a result of abandonment, vandalism or any unlawful or intentionally malicious act, the court shall enter an order allowing the plaintiff mortgagee to take action to protect and preserve the property pending and in anticipation of foreclosure or other enforcement of remedies in the mortgage, contract for deed or deed of trust.
3.  Upon issuance of an order to protect and preserve property, the court shall direct the plaintiff mortgagee to inventory, or cause to be inventoried, any personal property remaining on or about the subject property and to file such inventory in the court case file.
I.  When a court order is issued to protect and preserve property, the plaintiff mortgagee shall be authorized to take possession and secure the property pending and in anticipation of foreclosure or other enforcement of remedies in the mortgage, contract for deed or deed of trust.  The taking of possession of the property authorized by court order as specified in this section shall be without any liability on the part of the plaintiff mortgagee, its agents, officers, or employees, for the dispossession of the defendant mortgagor, occupant or tenant.  A writ of assistance shall be required if any person is found to be residing in or on the property subsequent to the notice and hearing and issuance of the court order to protect and preserve the property.
J.  An order issued to protect and preserve property pursuant to the provisions of this section may be vacated and set aside at any time by the court upon motion by the defendant mortgagor, or occupant or tenant, and satisfactory proof that the property is not or was not abandoned or vacated, or was leased or rented and lawfully occupied by a person other than the defendant mortgagor at the time of issuance of the order, provided the property was not subjected to intentional malicious acts by the defendant, or person, to deface, destroy or devalue the property.
K.  A motion filed, or court order issued, to protect and preserve the property as provided in this section shall not alter, modify, relinquish or release any right, title or interests of any party in or to any property, or alter, modify, relinquish or release any party's position, standing, claims, defenses or objections in the suit, action or proceeding pending before the court to foreclose or enforce any remedy in the mortgage, contract for deed or deed of trust.
SECTION 2.  This act shall become effective November 1, 2011.
Passed the House of Representatives the 21st day of February, 2011.

	
Presiding Officer of the House of
	Representatives

Passed the Senate the ____ day of __________, 2011.

	
Presiding Officer of the Senate