Political Affairs Update
Below is information that was presented at the April General Meeting. Be on the lookout for the new Political Affairs Tab that will be added to the website in the near future. Our thanks to Laura B. Conway, CIREIA Political Information Officer for the update.
2014 Legislative Update
By Laura B. Conway of Thrasher Buschmann & Voelkel, P.C.
This year was a short session for the Indiana General Assembly. The following is a very brief summary of some of the enacted legislation. This article should be not considered legal advice. If you need information regarding one or more of the bills below, please contact Laura at Conway@indiana-attorneys.com or 317-686-4773.
1. Title Insurance: A new website will be set up to allow for consumers to compare the prices and services offered by Title Insurance companies in Indiana. The tool will show the general entity information about the title insurance company, the rates typically charged for a commitment and a closing protection letter and a sample of rates the title insurer will charge for title insurance policies of varying amounts of insured value. The tool will be available on the Department of Insurance website and should be up and running by September 1, 2014.
2. Rental Properties: With some small exceptions, this new law sets the limits for municipal units with regard to permitting, registration and inspecting rental units in that municipality and goes into effect July 1, 2014:
a. Permit - No fee may be charged for a permit. A permit does not expire but a new permit must be obtained when the unit or units are transferred to a new owner.
b. Inspection – With some small exceptions, municipalities may require an inspection of a rental unit or rental unit community and charge a fee for that inspection. However, no inspection can be required if the rental unit or units are managed by a professional manager and have a written inspection report within the last 12 months (36 months if the report is from HUD) that states the unit is safe and habitable with respect to the electrical, plumbing, water, ventilation systems, bathrooms, entry and exit ways, smoke detectors and structure and that is issued by an inspector who is part of the government, part of an insurance company or bank, or an inspector who is an engineer, architect or satisfies the qualifications that are put forth by that municipality for an inspector. The inspector may not be an employee of the owner or the property manager.
c. Registration – The highest fee that may be charged by a municipality to register a rental unit or units is $5.00 per unit or rental unit community per year. The change of ownership of a rental unit or rental unit community can require a new $5.00 fee to be paid.
3. Abandoned/Blighted Properties, Tax Sale Matters, and Sheriff Sale Matters. This bill changes the time line for the sale abandoned/blighted properties, changes the interest amount that can be earned when a tax certificate purchaser bids over the minimum bid, and sets forth the requirements for entities to bid a the tax sales. There are also new rules regarding purchasing a paddle at tax sales and costs to remove a property from the sheriff sale.
a. Tax Sale Blight Registry: The attorney general shall establish as homeowner protection unit to operate the tax sale blight registry (starting July 1, 2015). The registry will contain those people who are not permitted to bid on properties in tax sales and will be available to county officials responsible for conducting tax sales across the state. The information may be available to the public in certain forms.
b. Vacant/Abandoned Properties: A county executive or the executive of a city or town may, after obtaining an order that a property is abandoned under Indiana law and providing the requisite notice, certify a list of vacant or abandoned properties to the county auditor. The county auditor shall combine the list of all such properties in that county and provide public notice of a sale of the properties at least thirty days before the date of the sale. The auditor may then auction the properties and provide a deed for each property purchased to the highest bidder. The minimum bid will be the proportionate share of the actual costs incurred by the county for the sale. The notice must contain the usual information, including the location of the property, the date of the auction, the minimum bid and whether or not the auction will be electronic.
c. Interest on Surplus Bids: For any tax sale the amount of the bid over and above the minimum bid will now earn five percent (5%) interest rather than ten percent (10%).
d. Entities allowed to bid at Tax Sale: Each entity that wants to bid at the tax sale must provide a certificate of good standing. A foreign business entity that has not obtained a certificate of authority or has obtained a certificate of authority but is not in good standing is not allowed to bid. If the county treasurer is either notified or determines that an entity which was the highest bidder for a parcel is in violation of the requirements within six months from the date of the sale, the county treasure shall send notice to the entity that they have thirty (30) days after the date of the notice to cure the noncompliance. If the noncompliance is not cured within that time frame then the minimum bid is forfeited and the surplus amounts are returned to the entity. The county treasurer may decline to forfeit a sale under the section. If the treasurer declines to forfeit the sale the county treasurer shall prepare a written statement explaining the reason for declining to forfeit the sale and retain the statement for public record.
e. Tax Sale Paddles: The County may charge a person seeking to bid at a tax sale a fee to obtain a paddle. If the person only attends one tax sale in a calendar year for that county and only purchases one property then the fee cannot be more than $25.00. If the person attends more than one tax sale in that county in a calendar year and/or purchases more than one property then the fee is $100.00.
f. Shorter Time Period for Notice required after Tax Sale: A purchaser or auditor must provide notice of the tax sale to the owner and any other interest holder of record six (6) months after the date of the tax sale or the tax deed cannot be issued. The previous time period for the notice requirement was nine (9) months.
g. Shorter Time Period To Request Tax Issuance of Tax Deed: The time period to file a request with the Court for the issuance of a tax deed after the expiration of the redemption period for the purchaser or the auditor (depending on the county) has been shortened from six (6) months to three (3) months.
h. Lower Interest for Invalidated Sale: If the tax sale is determined to be invalid then the purchaser receives all of its funds back plus five percent (5%) interest. This interest rate is lower than the six percent (6%) previously required.
i. Tax Deed: The county auditor shall record the tax deeds and collect the recording fee from the purchaser. The sales disclosure form only has to include the auditor’s signature.
j. Cancellation of Sheriff’s Sale: The person who cancels a sheriff sale must provide a fee of Ten Dollars ($10.00) for notice to one owner and three dollars ($3.00) for notice to each additional owner.
4. Business Entity Regulations. The new laws increase the amount of information that a registered agent must retain from entities, makes providing false information to the Secretary of State a crime, and provides the Secretary of State the ability to remove false or misleading filings from its records.
a. Information to provide to Registered Agent: All entities must provide to their registered agents, and the registered agents shall retain in paper or electronic form, the name, business address, or business telephone number of a natural person who is authorized to receive communications from the registered agent.
The person can be an officer, director, employee or some other designated agent of the entity. If this is not completed then the registered agent can resign.
b. New requirement with filings: For any entity formed after June 30, 2014, the entity must file with the Secretary of State (“SOS”) the registered agent’s written consent or the filing must contain a representation that the registered agent has consented.
c. Exclusive Jurisdiction: A corporation may include in its Articles of Incorporation or Bylaws a provision establishing exclusive jurisdiction in the circuit or superior courts of any count in Indiana or in the US District Courts of Indiana for various matters, including, derivative actions, actions for breach of fiduciary duty by a director, officer, employee or agent of the corporation to the corporation or any of the corporation’s constituents, any action relating to the internal affairs of the corporation, or a claim arising out of the provisions regarding corporations or the corporation’s articles of incorporation or bylaws.
d. Criminal Act if Delivering False Information: Any person who signs a document that the person knows is false in a material respect, with the intent that the document be delivered to the SOS commits a class A misdemeanor.
e. Assumed Business Names: An entity cannot use an entity indicator (Inc., LLC, etc.) in its assumed name if that indicator is inconsistent with the entity type.
f. Interrogatories and Investigative Claims by Secretary of State: SOS may send interrogatories which may be reasonably necessary and proper to enable the SOS to determine if the entity was formed using fraudulent or fictitious filings or is being used to commit fraud. The interrogatories can be sent to any domestic or foreign entity or any officer, director, member, manager or partner of an entity that is formed in Indiana and/or authorized to do business in Indiana. The interrogatories must be answered no later than 30 days after the date the interrogatories were mailed by the person or entity that the interrogatories are addressed to or within an additional period of time provided by the SOS in writing. If the answers to the interrogatories indicate a violation then the SOS can certify those answers to the Attorney General for the Attorney General to pursue. The SOS can remove any fraudulent filings or administratively dissolve the entity for failure to timely and adequately respond to the interrogatories.
g. Officers in LLCs: An LLC’s operating agreement may set forth the powers and duties of officers of the LLC either generally or specifically or have a statement that the duties and powers may otherwise be delegated to an officer from time to time by the manager or member of the LLC in a manner consistent with the written operating agreement. This does not affect any written operating agreement in effect before July 1, 2014.
5. Various Estate Matters. These new laws allow for persons who seek to obtain assets from third parties in small estates to recover their fees in enforcing their rights and provide that persons who take real or personal property by way of a will or trust take such property subject to any liens unless the will or trust explicitly states otherwise.
a. Small Estates: A court may award attorneys fees to a person bringing an action to require a person indebted to the decedent or holding property of the decedent to turn over property to the person entitled to such property. The person filing the action must prove that the person holding the property acted in bad father and failed to within thirty (30) business days after receiving the required affidavit requesting the property or funds.
b. Property In Estate Subject to Lien: When real or personal property subject to a lien is specifically devised, the devisee shall take the property subject to the lien unless the will expressly provides the lien should be paid. The devisee shall be required to reimburse the estate if the estate pays the holder of the lien and there is no specific statement that the lien was to be paid out of the residue of the estate. A general directive in the will is not enough.
c. Property in Trust Subject to Lien: If the real or personal property is specifically distributable the person receiving the property shall take the property subject to the lien unless the terms of the trust provide expressly or by necessary implication that the lien be otherwise paid. If a lien is paid then the property subject to the lien shall be charged with the reimbursement to the trust of the amount of the payment of the lien unless the trust specifically provides the lien can be paid from the residuary. A general directive that the debts should be paid is not enough.
6. Expungement: Last year the general assembly enacted a law that allowed for certain arrests and convictions to be expunged. This enacted legislation updated those expungement laws to correct some inconsistencies and changed a few of the requirements associated with filing the expungement petition.
a. Lower Burden of Proof: The burden of proof for all expungements of convictions changed from clear and convincing evidence to preponderance of the evidence, thereby lowering the standard of proof.
b. Remove Requirements Regarding Driver’s License: The new law removed the requirement that the petition not have an existing or pending driver’s license suspension.
c. Felony (Class C or higher) with no serious bodily injury or by an elected official: The petition may be filed the later of after eight (8) years of being convicted or three (3) years from completion of person’s sentence.
d. Felony (Class C or higher) with serious bodily injury and/or by an elected official: The earliest a petition may be filed is the later of ten (10) years of being convicted or five (5) years from completion of the person’s sentence.
e. Allows more access to expunged records: By defense attorney if authorized by court order, by probation department if authorized by court order, by various authorities to determine if a person possesses the necessary good moral character for admission to the bar, and to a person to comply with the Secure and Fair Enforcement for Mortgage Licensing Act.
f. Possession of Handgun by Person Convicted of Domestic Violence: Specifically states that a person who has been convicted of domestic violence may still not possess a firearm even if the conviction is expunged.
g. Allows for Re-filing of Petition: If a court denies the petition due to its discretionary powers then the petitioner can re-file the petition after waiting three (3) years. The new petition may only include the same convictions that were sought to be expunged in the last petition except if there is good cause shown why those convictions were not included in the last petition.
h. Effective Date: The revisions were effective when the Governor signed the bill.