LRB-1804/1
RPN:jlg:hmh
1999 - 2000 LEGISLATURE
March 8, 1999 - Introduced by Representatives La Fave, Colon, Urban, Ryba,
Staskunas, Powers, Young, Cullen and Riley, cosponsored by Senators
Plache, Farrow and Darling. Referred to Committee on Urban and Local
Affairs.
AB179,1,3
1An Act to renumber and amend 815.39;
to amend 254.595 (1), 254.595 (2),
2254.595 (3) (a) and 254.595 (4); and
to create 815.39 (2) and 823.23 of the
3statutes;
relating to: receiverships for public nuisance.
Analysis by the Legislative Reference Bureau
Under current law, if real property 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 first class cities to create a receivership to take control of residential
property that is declared a nuisance and abate that nuisance.
The bill also allows first class cities or interested parties to ask a court to
appoint a receiver to manage and control residential property 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 control of the property, terminate or modify
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.
For further information see the local fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB179, s. 1
1Section
1. 254.595 (1) of the statutes is amended to read:
AB179,3,72
254.595
(1) If real property is in violation of those provisions of a municipal
3building code that concern health or safety or of an order or a regulation of the local
4board of health, the city, village or town in which the property is located may
5commence an action to declare the property a
nuisance or human health hazard. A
6tenant or class of tenants of property that is in violation of the municipal building
7code or of an order or regulation of the local board of health or any other person or
8class of persons whose health, safety or property interests are or would be adversely
9affected by property that is in violation of the municipal building code or of an order
10or regulation of the local board of health may file a petition with the clerk of the city,
11village, or town requesting the governing body to commence an action to declare the
12property a
nuisance or human health hazard. If the governing body refuses or fails
13to commence an action within 20 days after the filing of the petition, a tenant, class
14of tenants, other person or other class of persons may commence the action directly
15upon the filing of security for court costs. The court before which the action of the
16case is commenced shall exercise jurisdiction in rem or quasi in rem over the property
17and the owner of record of the property, if known, and all other persons of record
1holding or claiming any interest in the property shall be made parties defendant and
2service of process may be had upon them as provided by law. Any change of
3ownership after the commencement of the action shall not affect the jurisdiction of
4the court over the property. At the time that the action is commenced, the
5municipality or other parties plaintiff shall file a lis pendens. If the court finds that
6a
nuisance or violation exists, it shall adjudge the property a
nuisance or human
7health hazard and the entry of judgment shall be a lien upon the premises.
AB179, s. 2
8Section
2. 254.595 (2) of the statutes is amended to read:
AB179,3,229
254.595
(2) A property owner or any person of record holding or claiming any
10interest in the property shall have 60 days after entry of judgment to
abate the
11nuisance or eliminate the violation. If, within 60 days after entry of judgment under
12sub. (1), an owner of the property presents evidence satisfactory to the court, upon
13hearing, that the
nuisance or violation has been eliminated, the court shall set aside
14the judgment. It may not be a defense to this action that the owner of record of the
15property is a different person, partnership or corporate entity than the owner of
16record of the property on the date that the action was commenced or thereafter if a
17lis pendens has been filed prior to the change of ownership. No hearing under this
18subsection may be held until notice has been given to the municipality and all the
19plaintiffs advising them of their right to appear. If the judgment is not so set aside
20within 60 days after entry of judgment, the court shall appoint a disinterested person
21to act as receiver of the property for the purpose of abating the
nuisance or human
22health hazard.
AB179, s. 3
23Section
3. 254.595 (3) (a) of the statutes is amended to read:
AB179,4,624
254.595
(3) (a) Any receiver appointed under sub. (2) shall collect all rents and
25profits accruing from the property, pay all costs of management, including all general
1and special real estate taxes or assessments and interest payments on first
2mortgages on the property, and make any repairs necessary to
abate the nuisance or 3meet the standards required by the building code or the order or regulation of the
4local board of health. The receiver may, with the approval of the circuit court, borrow
5money against and encumber the property as security for the money, in the amounts
6necessary to
abate the nuisance or meet the standards.
AB179, s. 4
7Section
4. 254.595 (4) of the statutes is amended to read:
AB179,4,168
254.595
(4) The receiver appointed under this section shall have a lien, for the
9expenses necessarily incurred
to abate the nuisance or in the execution of the order,
10upon the premises upon or in respect of which the work required by the order has
11been done or expenses incurred. The municipality that sought the order declaring
12the property to be a
nuisance or human health hazard may also recover its expenses
13and the expenses of the receiver under subs. (3) (a) and (5), to the extent that the
14expenses are not reimbursed under s. 632.103 (2) from funds withheld from an
15insurance settlement, by maintaining an action against the property owner under
16s. 74.53.
AB179, s. 5
17Section
5. 815.39 of the statutes is renumbered 815.39 (1) and amended to
18read:
AB179,4,2419
815.39
(1) Within Except as provided in sub. (2), within one year after an
20execution sale the real estate sold
, or any lot, tract or portion that was separately
21sold
, may be redeemed by the payment to the purchaser, to the purchaser's personal
22representatives or assigns, or to the then sheriff of the county where such real estate
23is situated, for the use of such purchaser, of the sum paid on the sale thereof, together
24with the interest from the time of the sale.
AB179, s. 6
25Section
6. 815.39 (2) of the statutes is created to read:
AB179,5,2
1815.39
(2) If an execution sale is for a lien filed under s. 823.23 (4), the period
2of redemption under sub. (1) is 2 months.
AB179, s. 7
3Section
7. 823.23 of the statutes is created to read:
AB179,5,5
4823.23 Receivership for public nuisances; 1st class cities. (1)
5Definitions. In this section:
AB179,5,96
(a) "Abatement" means the removal or suspension of any condition at a
7residential property that creates a nuisance or violates the provisions of any duly
8enacted building code. "Abatement" may include the demolition of some or all of the
9improvements on the residential property.
AB179,5,1010
(b) "City" means a 1st class city.
AB179,5,1311
(c) "Interested party" means any person that possesses any legal or equitable
12interest of record in the residential property, including the holder of any lien or
13encumbrance of record on the residential property.
AB179,5,1414
(d) "Purchase money security interest" means any of the following:
AB179,5,1715
1. The interest of a vendor under a land sale contract relating to the residential
16property if the contract was recorded prior to the issuance of the notice under sub.
17(2) (c).
AB179,5,2018
2. The interest of a mortgagee under a purchase money mortgage relating to
19the residential property if the mortgage was recorded prior to the issuance of the
20notice under sub. (2) (c).
AB179,5,2321
3. The interest of a beneficiary under a purchase money trust deed relating to
22the residential property if the trust deed was recorded prior to the issuance of the
23notice under sub. (2) (c).
AB179,5,2524
(e) "Rehabilitate" means to make any improvements or corrections necessary
25to remove a threat to public health, safety or welfare.
AB179,6,4
1(f) "Residential property" means land and all the improvements erected on the
2land that are used or intended to be used for residential purposes, including
3single-family, duplex and multifamily structures, and mixed-use structures that
4have one or more residential units.
AB179,6,11
5(2) Receivership for buildings that constitute a threat to public health,
6safety or welfare; procedure. (a) If a residential property is alleged to be a nuisance
7under this chapter or s. 254.595 or if the condition of a residential property is in
8violation of a state or local building code and a city, in the exercise of reasonable
9discretion, believes that the residential property is a threat to the public health,
10safety or welfare, the city may apply to the circuit court for the appointment of a
11receiver to abate or rehabilitate the residential property.
AB179,6,1512
(b) A person who brought an action under s. 254.595 (1) that resulted in a
13residential property being declared a nuisance may apply to the circuit court for the
14appointment of a receiver to abate or rehabilitate the residential property upon the
15filing of security for court costs.
AB179,6,2016
(c) At least 60 days before filing an application for the appointment of a receiver
17under par. (a) or (b), the city or person shall give written notice by 1st class mail to
18all owners, owner's agents and interested parties at their last-known address of the
19intent to file the application and by publication as a class 1 notice under ch. 985. The
20notice shall include all of the following information:
AB179,6,2121
1. The address and other information that identifies the residential property.
AB179,6,2422
2. The conditions of the residential property that constitute a nuisance or
23health, safety or welfare violations of the state or local building code and that
24resulted in the decision to apply for a receiver.
AB179,7,3
13. The name, address and telephone number of the person or department where
2additional information can be obtained concerning the nuisance or the building code
3violations and the action necessary to abate the nuisance or remedy those violations.
AB179,7,64
4. That the appointment of a receiver may be requested unless action is taken
5to abate the nuisance or correct the building code violations within 60 days after
6receipt of this notice.
AB179,7,117
(d) If a notice sent under par. (c) is recorded with the register of deeds in the
8county in which the residential property is located, the notice is considered to have
9been served, as of the date the notice is recorded, on any person claiming an interest
10in the residential property as a result of a conveyance from the owner of record unless
11the conveyance was recorded before the recording of the notice.
AB179,7,1612
(e) A person or city may not apply for the appointment of a receiver under this
13subsection if an interested party has commenced and is prosecuting in a timely
14fashion an action or other judicial or administrative proceeding to foreclose a security
15interest on the residential property, or to obtain specific performance of or forfeit the
16purchaser's interest in a land sale contract.
AB179,7,1917
(f) Notice of the application for the appointment of a receiver pursuant to this
18section shall be served on all owners, owners' agents and interested parties. At the
19time that the application is filed with the court, the applicant shall file a lis pendens.
AB179,8,220
(g) If, following the application for appointment of a receiver, one or more of the
21interested parties elects to abate the nuisance or rehabilitate the residential
22property, the party or parties shall be required to post security in an amount and
23character as the court considers appropriate to ensure timely performance of all work
24necessary to abate the nuisance or rehabilitate the residential property, as well as
1such other conditions as the court considers appropriate for timely completion of the
2abatement or rehabilitation.
AB179,8,93
(h) In the event that no interested party elects to act under par. (g) or fails to
4timely perform work undertaken under par. (g), the court shall make a
5determination as to whether the residential property is a threat to public health,
6safety or welfare. The court shall determine if abatement or rehabilitation is
7required, the extent of the abatement or rehabilitation necessary and the scope of
8work necessary to eliminate the conditions and shall appoint a receiver to complete
9the abatement or rehabilitation.
AB179,8,1010
(i) The court shall appoint a receiver who is one of the following:
AB179,8,1211
1. A housing authority, redevelopment authority, redevelopment corporation
12or community development authority authorized under ss. 66.40 to 66.4325.
AB179,8,1413
2. A nonprofit corporation, the primary purpose of which is the improvement
14of housing conditions within the city in which the property is located.
AB179,8,1715
(j) If the court is unable to appoint a receiver from one of the entities listed in
16par. (i), the court may appoint as a receiver any other person that the court
17determines to be competent.
AB179,8,1918
(k) A receiver appointed by the court pursuant to this section shall not be
19required to give security or bond as a condition of the appointment.
AB179,8,22
20(3) Authority of receiver; financing agreements; fee. (a) A receiver
21appointed under sub. (2) (i) or (j) shall have the authority to do all of the following
22unless specifically limited by the court:
AB179,9,223
1. Take possession and control of the residential property including the right
24to enter, modify and terminate tenancies, manage the property and charge and
1collect rents derived from the residential property, applying the sum of those rents
2to the costs incurred due to the abatement or rehabilitation and receivership.
AB179,9,53
2. Negotiate contracts and pay all expenses associated with operation and
4conservation of the residential property including all utility, fuel, custodial, repair
5or insurance expenses.
AB179,9,86
3. Pay all accrued property taxes, penalties, assessments and other charges
7imposed on the residential property by a unit of government including any charges
8accruing during the pendency of the receivership.