RPN:cjs:rs
2001 - 2002 LEGISLATURE
ASSEMBLY SUBSTITUTE AMENDMENT 1,
TO 2001 ASSEMBLY BILL 205
February 18, 2002 - Offered by Representative La Fave.
AB205-ASA1,1,3 1An Act to renumber and amend 815.39; to amend 254.595 (1), 254.595 (2),
2254.595 (4) and 815.44 (1); and to create 815.39 (2) and 823.23 of the statutes;
3relating to: receiverships for public nuisance.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB205-ASA1, s. 1 4Section 1. 254.595 (1) of the statutes is amended to read:
AB205-ASA1,2,185 254.595 (1) If real property is in violation of those provisions of a municipal
6building code that concern health or safety or, the city, village, or town in which the
7property is located may commence an action to declare the property a nuisance. If
8real property is in violation
of an order or a regulation of the local board of health,
9the city, village, or town in which the property is located may commence an action
10to declare the property a human health hazard. A tenant or class of tenants of
11property that is in violation of the municipal building code or of an order or regulation

1of the local board of health or any other person or class of persons whose health,
2safety or property interests are or would be adversely affected by property that is in
3violation of the municipal building code or of an order or regulation of the local board
4of health may file a petition with the clerk of the city, village, or town requesting the
5governing body to commence an action to declare the property a nuisance or human
6health hazard. If the governing body refuses or fails to commence an action within
720 days after the filing of the petition, a tenant, class of tenants, other person or other
8class of persons may commence the action directly upon the filing of security for court
9costs. The court before which the action of the case is commenced shall exercise
10jurisdiction in rem or quasi in rem over the property and the owner of record of the
11property, if known, and all other persons of record holding or claiming any interest
12in the property shall be made parties defendant and service of process may be had
13upon them as provided by law. Any change of ownership after the commencement
14of the action shall not affect the jurisdiction of the court over the property. At the time
15that the action is commenced, the municipality or other parties plaintiff shall file a
16lis pendens. If the court finds that a violation exists, it shall adjudge the property
17a nuisance or human health hazard and the entry of judgment shall be a lien upon
18the premises.
AB205-ASA1, s. 2 19Section 2. 254.595 (2) of the statutes is amended to read:
AB205-ASA1,3,720 254.595 (2) A property owner or any person of record holding or claiming any
21interest in the property shall have 60 days after entry of judgment to eliminate the
22violation. If, within 60 days after entry of judgment under sub. (1), an owner of the
23property presents evidence satisfactory to the court, upon hearing, that the violation
24has been eliminated, the court shall set aside the judgment. It may not be a defense
25to this action that the owner of record of the property is a different person,

1partnership or corporate entity than the owner of record of the property on the date
2that the action was commenced or thereafter if a lis pendens has been filed prior to
3the change of ownership. No hearing under this subsection may be held until notice
4has been given to the municipality and all the plaintiffs advising them of their right
5to appear. If the judgment is not so set aside within 60 days after entry of judgment,
6the court shall appoint a disinterested person to act as receiver of the property for
7the purpose of abating the nuisance or human health hazard.
AB205-ASA1, s. 3 8Section 3. 254.595 (4) of the statutes is amended to read:
AB205-ASA1,3,179 254.595 (4) The receiver appointed under this section shall have a lien, for the
10expenses necessarily incurred to abate the nuisance or in the execution of the order,
11upon the premises upon or in respect of which the work required by the order has
12been done or expenses incurred. The municipality that sought the order declaring
13the property to be a nuisance or human health hazard may also recover its expenses
14and the expenses of the receiver under subs. (3) (a) and (5), to the extent that the
15expenses are not reimbursed under s. 632.103 (2) from funds withheld from an
16insurance settlement, by maintaining an action against the property owner under
17s. 74.53.
AB205-ASA1, s. 4 18Section 4. 815.39 of the statutes is renumbered 815.39 (1) and amended to
19read:
AB205-ASA1,3,2520 815.39 (1) Within Except as provided in sub. (2), within one year after an
21execution sale the real estate sold, or any lot, tract or portion that was separately
22sold, may be redeemed by the payment to the purchaser, to the purchaser's personal
23representatives or assigns, or to the then sheriff of the county where such the real
24estate is situated, for the use of such purchaser, of the sum paid on the sale thereof,
25together with the interest from the time of the sale.
AB205-ASA1, s. 5
1Section 5. 815.39 (2) of the statutes is created to read:
AB205-ASA1,4,32 815.39 (2) If an execution sale is for a lien filed under s. 823.23 (5), the period
3of redemption under sub. (1) is 2 months.
AB205-ASA1, s. 6 4Section 6. 815.44 (1) of the statutes is amended to read:
AB205-ASA1,4,85 815.44 (1) Who may acquire. In case the premises sold on execution or any part
6of them are not redeemed within the year prescribed by ss. 815.39 (1) and 815.40 then
7the interest of the purchaser may be acquired within 3 months after the expiration
8of the redemption period by the persons and on the terms prescribed in this section.
AB205-ASA1, s. 7 9Section 7. 823.23 of the statutes is created to read:
AB205-ASA1,4,10 10823.23 Receivership for public nuisances. (1) Definitions. In this section:
AB205-ASA1,4,1411 (a) "Abatement" means the removal, suspension, improvement, or correction
12of any condition at a residential property that has been adjudicated to constitute a
13nuisance. "Abatement" may include the demolition of some or all of the
14improvements on the residential property if the residential property is unoccupied.
AB205-ASA1,4,1715 (b) "Interested party" means any person that possesses any legal or equitable
16interest of record in the residential property, including the holder of any lien or
17encumbrance of record on the residential property.
AB205-ASA1,4,1818 (c) "Nuisance" includes a nuisance under s. 254.595.
AB205-ASA1,4,1919 (d) "Purchase money security interest" means any of the following:
AB205-ASA1,4,2220 1. The interest of a vendor under a land contract relating to the residential
21property if the contract was recorded prior to the issuance of the notice under sub.
22(2) (b).
AB205-ASA1,4,2523 2. The interest of a mortgagee under a purchase money mortgage relating to
24the residential property if the mortgage was recorded prior to the issuance of the
25notice under sub. (2) (b).
AB205-ASA1,5,3
13. The interest of a beneficiary under a purchase money trust deed relating to
2the residential property if the trust deed was recorded prior to the issuance of the
3notice under sub. (2) (b).
AB205-ASA1,5,74 (e) "Residential property" means land, together with all the improvements
5erected on the land, that is located in a 1st or 2nd class city and used or intended to
6be used for residential purposes, including single-family, duplex, and multifamily
7structures, and mixed-use structures that have one or more residential units.
AB205-ASA1,5,11 8(2) Receivership for buildings that constitute a nuisance; procedure. (a) If
9a residential property is alleged to be a nuisance under this chapter or s. 254.595, the
101st or 2nd class city in which the property is located may apply to the circuit court
11for the appointment of a receiver to abate the nuisance.
AB205-ASA1,5,1612 (b) At least 60 days before filing an application for the appointment of a receiver
13under par. (a), the 1st or 2nd class city shall give written notice by 1st class mail to
14all owners, owner's agents, and interested parties at their last-known address of the
15intent to file the application and by publication as a class 1 notice under ch. 985. The
16notice shall include all of the following information:
AB205-ASA1,5,1717 1. The address and other information that identifies the residential property.
AB205-ASA1,5,1918 2. The conditions of the residential property that constitute a nuisance and that
19resulted in the decision to apply for a receiver.
AB205-ASA1,5,2220 3. The name, address, and telephone number of the person or department
21where additional information can be obtained concerning the nuisance and the
22action necessary to abate the nuisance.
AB205-ASA1,5,2423 4. That the appointment of a receiver may be requested unless action is taken
24to abate the nuisance within 60 days after receipt of the notice.
AB205-ASA1,6,5
1(c) If a notice sent under par. (b) is recorded with the register of deeds in the
2county in which the residential property is located, the notice is considered to have
3been served, as of the date the notice is recorded, on any person claiming an interest
4in the residential property as a result of a conveyance from the owner of record unless
5the conveyance was recorded before the recording of the notice.
AB205-ASA1,6,106 (d) A city may not apply for the appointment of a receiver under this subsection
7if an interested party has commenced and is prosecuting in a timely fashion an action
8or other judicial or administrative proceeding to foreclose a security interest on the
9residential property, or to obtain specific performance of, or forfeit, the purchaser's
10interest in a land contract.
AB205-ASA1,6,1311 (e) Notice of the application for the appointment of a receiver under this section
12shall be served on all owners, owners' agents, and interested parties. At the time that
13the application is filed with the court, the applicant shall file a lis pendens.
AB205-ASA1,6,1914 (f) If, following the application for appointment of a receiver, one or more of the
15interested parties elects to abate the nuisance, the party or parties shall be required
16to post security in such an amount and character as the court considers appropriate
17to ensure timely performance of all work necessary to abate the nuisance, as well as
18satisfy such other conditions as the court considers appropriate for timely completion
19of the abatement.
AB205-ASA1,6,2420 (g) In the event that all interested parties elect not to act under par. (f) or to
21timely perform work undertaken under par. (f), the court shall make a determination
22as to whether the residential property is a nuisance. The court shall determine the
23extent of the abatement necessary and the scope of work necessary to eliminate the
24conditions and shall appoint a receiver to complete the abatement.
AB205-ASA1,6,2525 (h) The court shall appoint a receiver who is one of the following:
AB205-ASA1,7,3
11. A housing authority, redevelopment company, redevelopment corporation,
2redevelopment authority, or community development authority under ss. 66.1201,
366.1301, 66.1331, 66.1333, or 66.1335.
AB205-ASA1,7,54 2. A nonprofit corporation, the primary purpose of which is the improvement
5of housing conditions within the city in which the property is located.
AB205-ASA1,7,86 (i) If the court is unable to appoint a receiver from one of the entities listed in
7par. (h), the court may appoint as a receiver any other person that the court
8determines to be competent.
AB205-ASA1,7,109 (j) A receiver appointed by the court pursuant to this section shall not be
10required to give security or bond as a condition of the appointment.
AB205-ASA1,7,13 11(3) Authority of receiver; financing agreements; fee. (a) A receiver
12appointed under sub. (2) (h) or (i) shall have the authority to do all of the following
13unless specifically limited by the court:
AB205-ASA1,7,1914 1. Take possession and control of the residential property including the right
15to enter into and terminate tenancies, manage and maintain the property under chs.
16704 and 799 and rules related to residential rental practices promulgated under s.
17100.20 (2), and charge and collect rents derived from the residential property,
18applying the sum of those rents to the costs incurred due to the abatement and
19receivership.
AB205-ASA1,7,2220 2. Negotiate contracts and pay all expenses associated with operation and
21conservation of the residential property including all utility, fuel, custodial, repair,
22or insurance expenses.
AB205-ASA1,7,2523 3. Pay all accrued property taxes, penalties, assessments, and other charges
24imposed on the residential property by a unit of government including any charges
25accruing during the pendency of the receivership.
AB205-ASA1,8,2
14. Dispose of any or all abandoned personal property found at the residential
2property.
AB205-ASA1,8,43 5. Enter into contracts and pay for the performance of any work necessary to
4complete the abatement.
AB205-ASA1,8,105 (b) In addition to the powers under par. (a), the receiver may, under such terms
6and conditions as a court shall allow, enter into financing agreements with public or
7private lenders and encumber the property so as to have moneys available to abate
8the nuisance. The receiver may give a holder of a purchase money security interest
9who received notice under sub. (2) the first opportunity to lend the money under this
10paragraph.
AB205-ASA1,8,1311 (c) A receiver may charge an administration fee at an hourly rate approved by
12the court or at a rate of 20% of the total cost of the abatement, whichever the court
13considers more appropriate.
AB205-ASA1,8,17 14(4) Limits on landlord authority. (a) In this subsection, "anticipated action"
15means a statement or statements by a person authorized by ordinance to bring an
16action under this section that leads a landlord to conclude that an action under this
17section may be commenced.
AB205-ASA1,9,318 (b) A landlord or receiver, or any agent of a landlord or receiver, of a residential
19rental unit that is the subject of any action, or anticipated action, to abate an alleged
20nuisance under this section may not with respect to the tenant of the rental unit,
21increase rent, decrease services, bring a court proceeding for possession of the unit,
22refuse to renew the rental agreement, or threaten or attempt to do any of the
23foregoing if the tenant, in a court proceeding commenced by the tenant, landlord, or
24receiver, establishes by a preponderance of the credible evidence that the foregoing
25conduct would not have occurred but for the bringing of an action for the abatement

1of a nuisance under this section with respect to the rental unit or the anticipation of
2such an action being brought. To prevail, the tenant must also establish by a
3preponderance of the evidence that one of the following applies:
AB205-ASA1,9,44 1. No nuisance was found with respect to the rental unit.
AB205-ASA1,9,55 2. The tenant was found not to cause a nuisance with respect to the rental unit.
AB205-ASA1,9,76 3. If a nuisance exists under this section, the conduct specified in this
7paragraph is not necessary to abate the nuisance.
AB205-ASA1,9,108 (d) Any action or inaction by a landlord, receiver, or agent described in par. (b)
9is subject to chs. 704 and 799, and any court proceeding regarding such an action or
10inaction shall be heard by the following court:
AB205-ASA1,9,1211 1. If the court proceeding is brought by a receiver, by the court that appointed
12the receiver.
AB205-ASA1,9,1413 2. If the court proceeding is brought by the tenant or landlord, in small claims
14court as an eviction action.
AB205-ASA1,9,1615 (e) In any action taken under par. (b), the notice given to the tenant must state
16the basis for the action and the right of the tenant to contest the action.
AB205-ASA1,9,23 17(5) Review of expenditures by court; lien for unpaid expenses. (a) All moneys
18the receiver expends and all of the costs and obligations that he or she incurs in
19performing the abatement, including the receiver's administrative fee, shall be
20reviewed by the court for reasonableness and necessity. To the extent that the court
21finds the moneys, costs, or obligations to be reasonable and necessary, it shall issue
22an order reciting this fact as well as the amount found to be reasonable and
23necessary.
AB205-ASA1,9,2524 (b) If all of the costs and obligations that the court found to be reasonable and
25necessary under par. (a) have not been paid, the court shall issue a judgment for the

1unpaid amount and file that judgment with the office of the clerk of court within 60
2days after the receiver files a statement of those unpaid costs and obligations with
3the court and that judgment shall constitute a lien on the residential property from
4the date of the filing of the judgment.
AB205-ASA1,10,12 5(6) Effect on purchase money security interest of lien for unpaid abatement
6expenses.
(a) The issuance of the notice under sub. (2) (b) shall constitute a default
7for waste under any purchase money security interest relating to the residential
8property subject to the notice, and if any violations of the building code listed in the
9notice are not corrected within 30 days after the mailing of the notice, the vendor,
10mortgagee, or beneficiary under any purchase money security interest may
11commence proceedings to exercise the remedies set forth in the purchase money
12security interest.
AB205-ASA1,10,1513 (b) A lien created under sub. (5) (b) shall be prior and superior to any purchase
14money security interest in the residential property if all of the following apply to that
15purchase money security interest:
AB205-ASA1,10,1816 1. The city gave the holder of the purchase money security interest and any
17vendee, mortgagor, or grantor under such purchase money security interest the
18notice under sub. (2) (b).
AB205-ASA1,10,2219 2. The holder of the purchase money security interest has not, prior to the
20appointment of a receiver under sub. (2) (g), initiated proceedings to foreclose the
21purchase money security interest, to abate the conditions resulting in issuance of the
22notice under sub. (2) (b) or to gain possession of the property.
AB205-ASA1,11,223 (c) Except for property tax liens, assessment liens, and purchase money
24security interests not included in par. (b), a lien created under sub. (5) (b) shall be
25prior and superior to all other liens, mortgages, and encumbrances against the

1residential property upon which it is imposed without regard to the date the other
2liens, mortgages, or encumbrances were attached to the residential property.
AB205-ASA1,11,5 3(7) Termination of receivership. (a) The receivership into which the court
4placed the residential property under sub. (2) (h) or (i) shall terminate only by an
5order of the court.
AB205-ASA1,11,86 (b) The court shall terminate the receivership if the residential property's
7owner or owner's agent or an interested party or the receiver show the court all of the
8following:
AB205-ASA1,11,99 1. That the abatement has been completed.
AB205-ASA1,11,1210 2. That the costs and obligations incurred due to the abatement, including the
11receiver's administrative fee, have been paid by an owner, owner's agent, or
12interested party or that a lien has been filed pursuant to sub. (5).
AB205-ASA1,11,1413 3. That the owner, owner's agent, or interested party will manage the
14residential property in conformance with applicable housing codes.
AB205-ASA1,11,1615 (c) The court shall terminate the receivership if the receiver shows the court
16one of the following:
AB205-ASA1,11,1717 1. That the abatement is not feasible.
AB205-ASA1,11,1918 2. That the improvements on the property have been demolished by the 1st or
192nd class city.
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