Bill Summary for H 573 (2017-2018)

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Summary date: 

Apr 5 2017

Bill Information:

View NCGA Bill Details2017-2018 Session
House Bill 573 (Public) Filed Wednesday, April 5, 2017
AN ACT TO MAKE BUSINESS AND REGULATORY CHANGES TO VARIOUS STATE LAWS.
Intro. by Faircloth, Ross, Blust, Brockman.

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Bill summary

Enacts new GS 160A-439.1 declaring a building or structure under Part 5 (building inspection) or a dwelling under Part 6 (minimum housing standards) of this Article as a nuisance per se and allows a city to petition the superior court for the appointment of a receiver to rehabilitate, demolish, or sell the vacant building, structure, or dwelling if the owner fails to comply with an order: (1) issued pursuant to GS 160A‑429 (order to take corrective action) from which no appeal has been taken; (2) of the city council issued pursuant to GS 160A‑429 following an appeal; or (3) to repair, alter, improve, remove, or demolish a structure issued under GS 160A‑443 (ordinance authorized as to repair, closing, and demolition; order of public officer). Specifies what must be included in a petition for the appointment of a receiver. 

Requires the city, within 10 days after filing the petition, to give notice of the pendency and nature of the proceeding by regular and certified mail to the last known address of all judgment creditors and lienholders with a recorded interest in the property. Allows a judgment creditor or lienholder, within 30 days of the date on which the notice was mailed, to apply to intervene in the proceeding and to be appointed as receiver. If the city fails to give required notice, the proceeding may continue, but the receiver's lien for expenses incurred in rehabilitating, demolishing, or selling the vacant building, structure, or dwelling will not have priority over the lien of that judgment creditor or lienholder.

Requires the court to appoint a receiver if the above provisions are satisfied, but allows to the court instead to allow an owner, mortgagee, or other person with an interest in the property to rehabilitate or demolish the property if that person meets three specified requirements. If that person is proceeding with due diligence or in compliance with the court-ordered schedule, the court may apply for immediate revocation of that person's appointment and for the appointment of a receiver. 

Provides that upon the appointment of a receiver, all other parties are divested of any authority to rehabilitate, demolish, or sell the building, structure, or dwelling subject to the receivership. Any party other than the appointed receiver who actively attempts to rehabilitate, demolish, or sell the property may be held in contempt of court.

Gives a receiver the right of possession with authority to: (1) contract for necessary labor and supplies for rehabilitation or demolition; (2) borrow money for rehabilitation or demolition from an approved lending institution or through a governmental agency or program, using the receiver's lien against the property as security; (3) manage the property after rehabilitation, with all the powers of a landlord, for a period of up to two years and apply the rent received to current operating expenses and repayment of outstanding rehabilitation expenses; and (4) foreclose on the receiver's lien or accept a deed in lieu of foreclosure.

Gives a receiver the authority to sell the property under specified procedures. Requires that after deducting the expenses of the sale, the amount of outstanding taxes and other government assessments, and the amount of the receiver's lien, the receiver must apply any remaining proceeds of the sale first to the city's costs and expenses and then to the liens against the property in order of priority, with any remaining proceeds remitted to the property owner.

Sets out the procedure under which a receiver may foreclose on the lien.

Requires the receiver, after the court's ratification of the sale of the property, to sign a deed conveying title to the property to the buyer, free and clear of all encumbrances. Limits the tenure of a receiver to no longer than two years after the rehabilitation, demolition, or sale of the property. Allows any party to the receivership, any time after the rehabilitation, demolition, or sale of the property, to file a motion to dismiss the receiver upon the payment of the receiver's outstanding costs, fees, and expenses. 

Allows the city to charge the owner of the building, structure, or dwelling subject to the receivership the lesser of an administrative fee of 5% of the profits from the sale of the building, structure, or dwelling or $100.

Applicable only to cities with a population of 30,000 or more as of July 2013, according to the annual estimate of the Office of State Budget and Management, and with a majority of the corporate boundaries in a county with a Tier 1 or Tier 2 annual ranking as designated by the Department of Commerce under GS 143B‑437.08.

Effective October 1, 2017, and applies to any nuisance per se described in new GS 160A‑439.1 that occurs on or after that date.