Session Update: Finance and Procurement Legislation – Foreclosure

This post summarizes the status of various finance and procurement bills relating to foreclosures that MACo either considered or took a position on.

Foreclosure Notices to SDATSB 123 would require a bank or other secured party who purchases a property through the foreclosure process to notify the local supervisor of assessments of the State Department of Assessments and Taxation (SDAT) within 30 days after the court ratifies the sale to provide for the removal of the Homestead Tax Credit that may have been associated with the property. MACo supported SB 123 because it would result in a more efficient process for the removal of these Credits and increased revenue for the State and local jurisdictions.  Status:  Bill has passed the Senate and has been assigned to the House Environmental Matters Committee.

Foreclosure – Recordation of DeedsHB 508 would require the purchaser at a foreclosure sale to close on the transaction and record a deed transferring title within 60 days after the entry of the final order of ratification.  MACo supported this legislation as it would result in a more timely collection of transfer and recordation taxes and the removal of Homestead Property Tax credits.  Status:  HB 508 was heard in the House Environmental Matters Committee on February 23 and is awaiting action.

Foreclosed Property Registry: HB 1373 would require the Department of Labor, Licensing, and Regulation to establish and maintain a foreclosed property registry and provide local government access.   MACo supported the bill as a mechanism to improve communications between State and local governments and those entities that are responsible for maintaining properties during the period of time between a foreclosure auction and the recordation of the property deed.  Many times during this period, properties may fall into disrepair and the local government may not know who to contact to address these matters. During  a subcommittee work session, this bill was amended to preclude local jurisdictions from establishing their own registry if a Statewide registry will be put in place and to authorize a local government to collect any charges for maintaining a property or abating a nuisance through the property tax. Status:  HB 1373 has been voted favorable with these amendments by the House Environmental Matters Committee.

Foreclosed Property – Certificate of Vacancy and Certificate of Property Unfit for HabitationHB 1374 would establish a “fast track” process for the liquidation of vacant properties. The “fast track” process is aimed at eliminating the elongated timeframe that leaves vacant properties in disrepair. For a property to be fast tracked, a local government must issue a certificate of vacancy or a certificate of property unfit for human habitation.  As introduced, the bill was authorizing, however as amended, a local government is now being required to issue these certificates if a property has been determined vacant, or found unfit for habitation in accordance with requirements of local, county, or state housing codes. Many local governments do not issue these certificates.  Status:  HB 1374 has been voted favorable with these amendments by the House Environmental Matters Committee.

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