2001 - 2002 LEGISLATURE
March 13, 2001 - Introduced by Senators Plache, Burke, Rosenzweig, Darling and
Cowles, cosponsored by Representatives
La Fave, Townsend, Ryba, Miller,
Staskunas, J. Lehman, Cullen, Kreuser, Richards and Coggs. Referred to
Committee on Universities, Housing, and Government Operations.
1An Act to renumber and amend
254.595 (1), 254.595 (2), 2
254.595 (3) (a), 254.595 (4) and 815.44 (1); and to create
815.39 (2) and 823.23 3
of the statutes; relating to: receiverships for public nuisance.
Analysis by the Legislative Reference Bureau
Under current law, if real property, other than an owner-occupied one-family
or two-family dwelling, is in violation of a municipal building code provision that
concerns health or safety, the municipality or an interested party may commence an
action to have the property declared a health hazard. Under the law, a receiver may
be appointed to manage and control the property if a court finds that the property
is a health hazard and that the owner has not abated that hazard. This bill allows
the court to declare such property to be a nuisance and allows the court to permit
cities, villages, and towns to create a receivership to take control of residential
property that is declared a nuisance and abate that nuisance.
The bill also allows 1st or 2nd class cities to ask a court to appoint a receiver to
manage and control residential property, including a single-family dwelling, that is
declared a nuisance for other reasons, including because it is dilapidated, used as a
place of gambling, for the delivery or manufacture of a drug, or as a meeting place
for a criminal gang. The bill requires that the owner of the residential property be
given notice of the intent to petition a court for the appointment of receiver at least
60 days before filing the petition, to give the owner time to abate the nuisance.
If a court determines that abatement is required and that the owner will not
rehabilitate the property, the court shall appoint a receiver. A receiver created by the
court under this bill has authority to take possession of, and manage and maintain,
the property, terminate tenancies, charge and collect rents, contract with others to
conserve and rehabilitate the property, and dispose of personal property found at the
residential property. Under the bill, costs of the abatement, including the fee charged
by the receiver, are reviewed by the court and the costs not paid may be entered as
a judgment against the property. Under the bill, the court shall terminate the
receivership when the abatement or rehabilitation is completed or if the receiver
shows the court that the abatement is not feasible and that the improvements on the
real property have been demolished by the city, village, or town.
The bill also prohibits a landlord or receiver of residential property that is
subject to an action to abate a nuisance from committing certain acts, including
increasing the rent, decreasing services, or refusing to renew a rental agreement.
This limit on the landlord's or receiver's authority only applies under the bill if that
act would not have occurred if the abatement action was not begun and the tenant
shows that no nuisance exists with respect to the tenant's rental unit, the nuisance
was not caused by the tenant, or the action of the landlord or receiver is not necessary
to abate the nuisance.
Under current law, within one year after the execution sale of real estate, the
real estate sold may be redeemed by the payment to the purchaser of the sum paid
for the real estate at the execution sale. This bill reduces the time period of
redemption to two months for real estate that was sold based on a lien created as the
result of the unpaid costs incurred by a receiver in rehabilitating property that was
a nuisance or abating that nuisance.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
SB88, s. 1
254.595 (1) of the statutes is amended to read:
If real property is in violation of those provisions of a municipal 3
building code that concern health or safety or of an order or a regulation of the local 4
board of health, the city, village or town in which the property is located may 5
commence an action to declare the property a nuisance or
human health hazard. A 6
tenant or class of tenants of property that is in violation of the municipal building 7
code or of an order or regulation of the local board of health or any other person or 8
class of persons whose health, safety or property interests are or would be adversely 9
affected by property that is in violation of the municipal building code or of an order 10
or regulation of the local board of health may file a petition with the clerk of the city,
village, or town requesting the governing body to commence an action to declare the 2
property a nuisance or
human health hazard. If the governing body refuses or fails 3
to commence an action within 20 days after the filing of the petition, a tenant, class 4
of tenants, other person or other class of persons may commence the action directly 5
upon the filing of security for court costs. The court before which the action of the 6
case is commenced shall exercise jurisdiction in rem or quasi in rem over the property 7
and the owner of record of the property, if known, and all other persons of record 8
holding or claiming any interest in the property shall be made parties defendant and 9
service of process may be had upon them as provided by law. Any change of 10
ownership after the commencement of the action shall not affect the jurisdiction of 11
the court over the property. At the time that the action is commenced, the 12
municipality or other parties plaintiff shall file a lis pendens. If the court finds that 13
a nuisance or
violation exists, it shall adjudge the property a nuisance or
health hazard and the entry of judgment shall be a lien upon the premises.
SB88, s. 2
254.595 (2) of the statutes is amended to read:
A property owner or any person of record holding or claiming any 17
interest in the property shall have 60 days after entry of judgment to abate the
eliminate the violation. If, within 60 days after entry of judgment under 19
sub. (1), an owner of the property presents evidence satisfactory to the court, upon 20
hearing, that the nuisance or
violation has been eliminated, the court shall set aside 21
the judgment. It may not be a defense to this action that the owner of record of the 22
property is a different person, partnership or corporate entity than the owner of 23
record of the property on the date that the action was commenced or thereafter if a 24
lis pendens has been filed prior to the change of ownership. No hearing under this 25
subsection may be held until notice has been given to the municipality and all the
plaintiffs advising them of their right to appear. If the judgment is not so set aside 2
within 60 days after entry of judgment, the court shall appoint a disinterested person 3
to act as receiver of the property for the purpose of abating the
SB88, s. 3
254.595 (3) (a) of the statutes is amended to read:
(a) Any receiver appointed under sub. (2) shall collect all rents and 7
profits accruing from the property, pay all costs of management, including all general 8
and special real estate taxes or assessments and interest payments on first 9
mortgages on the property, and make any repairs necessary to abate the nuisance or 10
meet the standards required by the building code or the order or regulation of the 11
local board of health. The receiver may, with the approval of the circuit court, borrow 12
money against and encumber the property as security for the money, in the amounts 13
necessary to abate the nuisance or
meet the standards.
SB88, s. 4
254.595 (4) of the statutes is amended to read:
The receiver appointed under this section shall have a lien, for the 16
expenses necessarily incurred to abate the nuisance or
in the execution of the order, 17
upon the premises upon or in respect of which the work required by the order has 18
been done or expenses incurred. The municipality that sought the order declaring 19
the property to be a nuisance or
human health hazard may also recover its expenses 20
and the expenses of the receiver under subs. (3) (a) and (5), to the extent that the 21
expenses are not reimbursed under s. 632.103 (2) from funds withheld from an 22
insurance settlement, by maintaining an action against the property owner under 23
SB88, s. 5
815.39 of the statutes is renumbered 815.39 (1) and amended to 25
815.39 (1) Within Except as provided in sub. (2), within
one year after an 2
execution sale the real estate sold,
or any lot, tract or portion that was separately 3
may be redeemed by the payment to the purchaser, to the purchaser's personal 4
representatives or assigns, or to the then
sheriff of the county where such the
estate is situated, for the use of such purchaser, of the sum paid on the sale thereof, 6
together with the interest from the time of the sale.
SB88, s. 6
815.39 (2) of the statutes is created to read:
If an execution sale is for a lien filed under s. 823.23 (5), the period 9
of redemption under sub. (1) is 2 months.
SB88, s. 7
815.44 (1) of the statutes is amended to read:
815.44 (1) Who may acquire.
In case the premises sold on execution or any part 12
of them are not redeemed within the year prescribed by ss. 815.39
and 815.40 then 13
the interest of the purchaser may be acquired within 3 months after the expiration 14
of the redemption period by the persons and on the terms prescribed in this section.
SB88, s. 8
823.23 of the statutes is created to read:
16823.23 Receivership for public nuisances. (1) Definitions.
In this section:
(a) "Abatement" means the removal or suspension of any condition at a 18
residential property that has been adjudicated to constitute a nuisance. 19
"Abatement" may include the demolition of some or all of the improvements on the 20
residential property if the residential property is unoccupied.
(b) "Interested party" means any person that possesses any legal or equitable 22
interest of record in the residential property, including the holder of any lien or 23
encumbrance of record on the residential property.
(c) "Purchase money security interest" means any of the following:
1. The interest of a vendor under a land contract relating to the residential 2
property if the contract was recorded prior to the issuance of the notice under sub. 3
2. The interest of a mortgagee under a purchase money mortgage relating to 5
the residential property if the mortgage was recorded prior to the issuance of the 6
notice under sub. (2) (b).
3. The interest of a beneficiary under a purchase money trust deed relating to 8
the residential property if the trust deed was recorded prior to the issuance of the 9
notice under sub. (2) (b).
(d) "Rehabilitate" means to make any improvements or corrections necessary 11
to remove a threat to public health, safety, or welfare.
(f) "Residential property" means land, together with all the improvements 13
erected on the land, that is located in a 1st or 2nd class city and used or intended to 14
be used for residential purposes, including single-family, duplex, and multifamily 15
structures, and mixed-use structures that have one or more residential units.
16(2) Receivership for buildings that constitute a nuisance; procedure.
(a) If 17
a residential property is alleged to be a nuisance under this chapter or s. 254.595, the 18
1st or 2nd class city in which the property is located may apply to the circuit court 19
for the appointment of a receiver to abate or rehabilitate the residential property.
(b) At least 60 days before filing an application for the appointment of a receiver 21
under par. (a), the 1st or 2nd class city shall give written notice by 1st class mail to 22
all owners, owner's agents, and interested parties at their last-known address of the 23
intent to file the application and by publication as a class 1 notice under ch. 985. The 24
notice shall include all of the following information:
1. The address and other information that identifies the residential property.
2. The conditions of the residential property that constitute a nuisance and that 2
resulted in the decision to apply for a receiver.
3. The name, address, and telephone number of the person or department 4
where additional information can be obtained concerning the nuisance and the 5
action necessary to abate the nuisance.
4. That the appointment of a receiver may be requested unless action is taken 7
to abate the nuisance within 60 days after receipt of the notice.
(c) If a notice sent under par. (b) is recorded with the register of deeds in the 9
county in which the residential property is located, the notice is considered to have 10
been served, as of the date the notice is recorded, on any person claiming an interest 11
in the residential property as a result of a conveyance from the owner of record unless 12
the conveyance was recorded before the recording of the notice.
(d) A city may not apply for the appointment of a receiver under this subsection 14
if an interested party has commenced and is prosecuting in a timely fashion an action 15
or other judicial or administrative proceeding to foreclose a security interest on the 16
residential property, or to obtain specific performance of, or forfeit, the purchaser's 17
interest in a land contract.
(e) Notice of the application for the appointment of a receiver under this section 19
shall be served on all owners, owners' agents, and interested parties. At the time that 20
the application is filed with the court, the applicant shall file a lis pendens.
(f) If, following the application for appointment of a receiver, one or more of the 22
interested parties elects to abate the nuisance or rehabilitate the residential 23
property, the party or parties shall be required to post security in such an amount 24
and character as the court considers appropriate to ensure timely performance of all 25
work necessary to abate the nuisance or rehabilitate the residential property, as well
as satisfy such other conditions as the court considers appropriate for timely 2
completion of the abatement or rehabilitation.
(g) In the event that all interested parties elect not to act under par. (f) or to 4
timely perform work undertaken under par. (f), the court shall make a determination 5
as to whether the residential property is a threat to public health, safety, or welfare. 6
The court shall determine if abatement or rehabilitation is required, the extent of the 7
abatement or rehabilitation necessary, and the scope of work necessary to eliminate 8
the conditions and shall appoint a receiver to complete the abatement or 9
(h) The court shall appoint a receiver who is one of the following: