SB313

ENGROSSED

By Senator Marsh

A BILL TO BE ENTITLED AN ACT

Relating to Class 5 municipalities; to authorize Class 5 municipalities to file an expedited quiet title and foreclosure action in circuit court to establish clear title to abandoned tax sale properties within the corporate limits that are acquired from the State Land Commissioner pursuant to Chapter 10, Title 40, Code of Alabama 1975; and to provide for the procedure and due process for the action in circuit court.

BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:

Section 1. This act shall apply only in a Class 5 municipality and provides the exclusive procedure for an expedited quiet title and foreclosure action for a Class 5 municipality, notwithstanding Section 24-9-8, Code of Alabama 1975. Section 40-10-82, Code of Alabama 1975, as amended, shall not apply to, restrict, or otherwise affect any cause of action or action brought by a Class 5 municipality pursuant to this act and shall not remove any limitation of action or extend the period of redemption of any abandoned tax sale properties within the corporate limits of the Class 5 municipality acquired by it from the State Land Commissioner.

Section 2. (a) Any Class 5 municipality may initiate an expedited quiet title and foreclosure action under this section against a parcel of tax sale property located within its municipal limits and purchased by the municipality from the State Land Commissioner. The municipality shall record, in the office of the judge of probate in the county in which the property is located, a notice of its intention to file an expedited quiet title and foreclosure action. The notice shall include a legal description of the property, street address of the property if available, a statement that the property is subject to expedited quiet title and foreclosure proceedings under this act, and a statement that those proceedings may extinguish any legal interests in the property. As used herein, "interested parties" shall mean the owner, his or her heirs or personal representatives, any mortgagee or purchaser of the subject property or any part thereof, and any party with an interest in the property, or in any part thereof, legal or equitable, in severalty or as tenant in common, including a judgment creditor or other creditor having a lien thereon, or any part thereof.

(b) The municipality shall make a good faith effort to identify the interested parties and the addresses at which they can be reached. The municipality shall be presumed to have made a good faith effort to identify interested parties if it does all of the following:

(1) Erects a sign not less than four feet by six feet on the property and maintains it for a minimum of 30 days, which must read as follows:

THIS PROPERTY WAS SOLD TO THE CITY OF

______________ FOR UNPAID TAXES. ANYONE WITH

INFORMATION ABOUT THE OWNER OF THIS PROPERTY,

PLEASE CALL _____________.

(2) Examines the addresses that appear on the face of the recorded deeds, mortgages, and relevant instruments.

(3) Examines the records of the tax assessor or revenue commissioner to find the names and addresses of all parties who paid taxes in the five-year period prior to the date of the tax sale; provided, however, that the municipality is not required to search for parties who paid taxes more than 20 years prior to the year of the inquiry.

(4) If the interested party is an individual, the municipality shall examine voter registration lists, available municipal archives for records of deaths, and the probate court records of estates opened in the county in which the property is located.

(5) If the interested party is a business entity, the municipality shall search the records of the Secretary of State for the name and address of a registered agent.

Section 3. The municipality may file a single petition with the clerk of the circuit court for the judicial circuit in which the subject property is located for an order to quiet title and expedite foreclosure to one or more parcels of property under this section. The petition shall identify each parcel by its legal description, tax parcel number, and street address, if available, and shall be served on all interested parties identified in accordance with subsection (b) of Section 2.

Section 4. The circuit court petition under Section 3 shall set the date, time, and place for a hearing on the petition within 90 days. The court, on the request of a party, may extend the 90-day period for good cause shown.

Section 5. (a) Not less than 30 days before the date on which the hearing on the quiet title and foreclosure petition is scheduled, the municipality shall do both of the following:

(1) Send a notice of the hearing to the interested parties identified under subsection (b) of Section 2 for each parcel named in the petition by both certified mail, return receipt requested, and regular mail.

(2) Post conspicuously on each property named in the petition notice of the hearing which includes the following statement: "THIS PROPERTY HAS BEEN TRANSFERRED TO [NAME OF MUNICIPALITY] AND IS SUBJECT TO AN EXPEDITED QUIET TITLE AND FORECLOSURE ACTION. PERSONS WITH INFORMATION REGARDING THE PRIOR OWNER OF THE PROPERTY ARE REQUESTED TO CONTACT [THE MUNICIPALITY]."

(b) Notices provided to the interested parties under this section shall include all of the following:

(1) The date on which the municipality recorded in probate court its notice of the pending expedited quiet title and foreclosure action under subsection (a) of Section 2.

(2) A legal description, tax parcel identification number, and the street address of the property, if available.

(3) The interested party or parties to whom the notice is addressed.

(4) The date, time, and place for the hearing on the petition for expedited quiet title and foreclosure and a statement that the judgment of the court may result in title to the property vesting in the municipality.

(5) Notice that the judgment of the court in the quiet title and foreclosure hearing may extinguish any ownership interest in, liens against, right to redeem, or any claim whatsoever secured by the property.

(6) The name, address, and telephone number of the municipality.

(7) A statement that persons with information regarding the owner or prior owner of any of the properties are requested to contact the municipality.

(8) That any party seeking to redeem the property will be required to pay all taxes, interest, penalties, and fees and any other charges due and owing under Chapter 10 of Title 40, Code of Alabama 1975.

Section 6. If the municipality is unable to identify the names and addresses of interested parties, or is unable to provide notice under Section 5, the municipality shall apply to the circuit court for an order to allow notice by publication. If so ordered, the municipality shall publish a notice once each week for three consecutive weeks in a newspaper of general circulation in the county in which the property is located. If no newspaper is published in that county, publication shall be made in a newspaper of general circulation in an adjoining county. This publication shall substitute for notice under subdivision (1) of subsection (a) of Section 5. The published notice shall include the information listed in subsection (b) of Section 5. If the municipality discovers the name and address of an interested party following publication, it shall notify that party of the expedited quiet title and foreclosure action in accordance with subdivision (1) of subsection (a) of Section 5 as soon as practicable, in which case notice shall be brought to the attention of the court which shall postpone the hearing for a period of time sufficient to give such notice to the newly discovered party.

Section 7. Prior to the circuit court hearing on the expedited quiet title and foreclosure action, the municipality shall file with the clerk of the circuit court proof of notice to the interested parties by certified and regular mail and of the posting on the property under subdivision (2) of subsection (a) of Section 5, along with proof of notice by publication under Section 6, if applicable. An interested party who desires to contest the petition shall file written objections with the clerk of the circuit court and serve those objections on the municipality at least two weeks prior to the date of the hearing. If the court denies the petition, the denial shall not preclude the municipality from filing another petition for expedited quiet title and foreclosure on that parcel. No injunction shall issue to stay an expedited quiet title and foreclosure action under this section.

Section 8. (a) If an interested party appears at the hearing and asserts a right to redeem the property, that party may redeem in accordance with Chapter 10 of Title 40, Code of Alabama 1975.

(b) If an interested party appears and fails to redeem, or if no one appears, the circuit court shall enter judgment on the petition not more than 10 days after the date the matter was heard.

(c) The judgment of the circuit court shall specify all of the following:

(1) The legal description, tax parcel identification number, and, if known, the street address of the property foreclosed.

(2) That fee simple title to property foreclosed by the judgment is vested absolutely in the municipality, except as otherwise provided in subdivision (5), without any further rights of redemption.

(3) That all liens against the property, including any lien for unpaid taxes or special assessments, are extinguished.

(4) That the municipality has good and marketable fee simple title to the property.

(5) That all existing recorded and unrecorded interests in the property are extinguished, except for easements or right-of-way, private deed restrictions, plat restrictions, mineral and mining rights held by third parties, or restrictions or covenants imposed under the Alabama Land Recycling and Economic Redevelopment Act or any other environmental law in effect in the state.

(6) That the municipality provided notice to all interested parties or that the municipality complied with the notice procedures in Section 5, which compliance shall create a rebuttable presumption that all interested parties received notice and an opportunity to be heard.

Section 9. A municipality or interested party may, within 42 days following the effective date of the judgment, appeal the judgment of the circuit court to the Court of Civil Appeals. Any party appealing from an order vesting title in the municipality shall, as a condition of the appeal, identify the parcel which is the subject of the appeal and, with respect to that parcel, post a bond with at least one solvent surety in the amount due to redeem the property under Chapter 10, Title 40, Code of Alabama 1975. The appeal shall stay the order of the circuit court only with respect to each parcel identified as the subject of the appeal. The order of the circuit court shall be affirmed absent a defect in the identification of the property or in the notice such that the notice deprived a party of the right to due process of law. The order shall not be reversed on the basis of merely technical noncompliance with this section.

Section 10. The municipality shall record the court's order in the probate court following the 42-day period after the entry of the order if no appeal is filed or after a final judgment on appeal from the decision of the circuit court on the municipality's petition for an expedited quiet title and foreclosure action.

Section 11. All laws or parts of laws which conflict with this act are repealed.

Section 12. This act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law.

Municipalities

Class 5 Municipalities

Property, Real and Personal

Taxation

Tax Sales

State Land Commissioner

Revenue Department

Court, Circuit

Foreclosures