As Introduced

134th General Assembly

Regular Session S. B. No. 334

2021-2022

A BILL

To amend section 2329.27 and to enact sections 2329.261 and 2329.313 of the Revised Code to grant tenants and certain other eligible bidders rights relating to the purchase of residential property sold at foreclosure.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That section 2329.27 be amended and sections 2329.261 and 2329.313 of the Revised Code be enacted to read as follows:

Sec. 2329.261. (A) If residential property sold at public sale pursuant to this chapter contains one to four single-family units, the levying officer shall do all of the following:

(1) Include the following statement, in substantially the following form, in the notice required by division (A)(2) of section 2329.26 of the Revised Code:

"NOTICE TO TENANTS AND OTHER ELIGIBLE BIDDERS: You may have a right to purchase this property after the sale pursuant to R.C. 2329.313. If you are an "eligible-tenant buyer," you can purchase the property if you match the successful bid placed at the sale. If you are an "eligible bidder," you may be able to purchase the property if you exceed the successful bid placed at the sale. There are three steps to exercising this right of purchase.

First, two calendar days after the date of the sale, you can call [telephone number for information regarding the sale], or visit this web site [web site address for information regarding the sale], using the file number assigned to this case [case file number] to find the date on which the sale was held, the amount of the successful bid, and the address of the person who conducted the sale.

Second, you must send a written notice of intent to place a bid so that the person who conducted the sale receives it not more than fifteen days after the date of the sale.

Third, you must submit a bid so that the person who conducted the sale receives it not more than forty-five days after the date of the sale.

If you think you may qualify as an "eligible tenant-buyer" or "eligible bidder," you should consider contacting an attorney or appropriate real estate professional immediately for advice regarding this potential right to purchase."

(2) Post a copy of the notice required by division (A)(2) of section 2329.26 of the Revised Code, as modified by division (A)(1) of this section, in a conspicuous place on the residential property to be sold at least three weeks before the date of the sale, where possible and where not restricted for any reason. The posting shall be on a door of each dwelling unit on the residential property, but, if that is not possible or access is restricted, then the notice shall be posted in a conspicuous place on the residential property. If access is denied because a common entrance to the residential property is restricted by a guard gate or similar impediment, the notice may be posted at that guard gate or impediment.

(3) Maintain a web site and telephone number to provide information on applicable properties. A levying officer shall provide information required by division (A)(3) of this section, and, for completed sales, information regarding the sale date, amount of the successful bid, and the levying officer's address, to be accessible using the file number assigned to the case and listed on the notice required by division (A)(2) of section 2329.26 of the Revised Code, as modified by division (A)(1) of this section. This information shall be made available free of charge and shall be available twenty-four hours a day, seven days a week.

(B) A levying officer may use any web site maintained to satisfy any other provision of this chapter, including the official public sheriff sale web site established pursuant to section 2329.153 of the Revised Code, to satisfy the requirements of division (A)(3) of this section.

(C) As used in this section, "levying officer" means the officer who makes the public sale of the residential property subject to this section. "Levying officer" includes a private selling officer.

Sec. 2329.27. (A) When the public notice required by division (A)(2) of section 2329.26 or divisions (A)(1) and (2) of section 2329.261 of the Revised Code is made in a newspaper published weekly, it is sufficient to insert it for three consecutive weeks. If both a daily and weekly edition of the paper are published and the circulation of the daily in the county exceeds that of the weekly in the county, or if the lands and tenements taken in execution are situated in a city, both a daily and weekly edition of the paper are published, and the circulation of the daily in that city exceeds the circulation of the weekly in that city, it is sufficient to publish the public notice in the daily once a week for three consecutive weeks before the day of sale, each insertion to be on the same day of the week. The expense of that publication in a daily shall not exceed the cost of publishing it in a weekly.

(B)(1) Subject to divisions (B)(2) and (3) of this section, all sales of lands and tenements taken in execution that are made without compliance with the written notice requirements of division (A)(1)(a) of section 2329.26 of the Revised Code, the public notice requirements of division (A)(2) of that section or divisions (A)(1) and (2) of section 2329.261 of the Revised Code, as applicable, the purchaser information requirements of section 2329.271 of the Revised Code, and division (A) of this section shall be set aside, on motion by any interested party, by the court to which the execution is returnable.

(2) Proof of service endorsed upon a copy of the written notice required by division (A)(1)(a) of section 2329.26 of the Revised Code shall be conclusive evidence of the service of the written notice in compliance with the requirements of that division, unless a party files a motion to set aside the sale of the lands and tenements pursuant to division (B)(1) of this section and establishes by a preponderance of the evidence that the proof of service is fraudulent.

(3) If the court to which the execution is returnable enters its order confirming the sale of the lands and tenements, the order shall have both of the following effects:

(a) The order shall be deemed to constitute a judicial finding as follows:

(i) That the sale of the lands and tenements complied with the written notice requirements of division (A)(1)(a) of section 2329.26 of the Revised Code and the public notice requirements of division (A)(2) of that section, or divisions (A)(1) and (2) of section 2329.261 of the Revised Code, as applicable, and division (A) of this section, or that compliance of that nature did not occur but the failure to give a written notice to a party entitled to notice under division (A)(1)(a) of section 2329.26 of the Revised Code has not prejudiced that party;

(ii) That all parties entitled to notice under division (A)(1)(a) of section 2329.26 of the Revised Code received adequate notice of the date, time, and place of the sale of the lands and tenements;

(iii) That the purchaser has submitted the contact information required by section 2329.271 of the Revised Code.

(b) The order bars the filing of any further motions to set aside the sale of the lands and tenements.

Sec. 2329.313. (A) As used in this section:

(1) "Eligible bidder" means any of the following:

(a) A prospective owner-occupant;

(b) An unincorporated nonprofit association as defined in section 1745.05 of the Revised Code, nonprofit corporation as defined in section 1702.01 of the Revised Code, or cooperative as defined in section 1729.01 of the Revised Code in which an eligible tenant-buyer or a prospective owner-occupant is a voting member or director;

(c) A nonprofit corporation, as defined in section 1702.01 of the Revised Code, based in this state whose primary activity is the development and preservation of affordable rental housing;

(d) A limited partnership or domestic limited partnership, as defined in section 1782.01 of the Revised Code, in which a general partner is a nonprofit corporation based in this state, the primary activity of which is the development and preservation of affordable housing;

(e) A limited liability company, as defined in section 1706.01 of the Revised Code, in which the manager is a nonprofit corporation based in this state, the primary activity of which is the development and preservation of affordable rental housing;

(f) A community improvement corporation, as defined in section 1724.01 of the Revised Code, or a community urban redevelopment corporation, as defined in section 1728.01 of the Revised Code;

(g) A public office.

(2) "Eligible tenant-buyer" means a natural person who, at the time of the judicial sale, is all of the following:

(a) Occupying the residential property that is the subject of the judicial sale as the person's primary residence;

(b) Occupying the residential property under a rental agreement entered into as the result of an arm's length transaction with the mortgagor on a date prior to a default on the note secured by the mortgage that led to the action for judicial sale and foreclosure;

(3) "Levying officer" has the same meaning as in section 2329.261 of the Revised Code.

(4) "Prospective owner-occupant" means a natural person who executes an affidavit pursuant to division (B) of this section and delivers it to a levying officer.

(5) "Public office" means any state agency as defined in section 1.60 of the Revised Code, state institution of higher education as defined in section 3345.011 of the Revised Code, public institution, political subdivision, or other organized body, office, agency, institution, or entity established by the laws of this state for the exercise of any function of government.

(B) To qualify as a prospective owner-occupant for purposes of this section, a bidder shall be a natural person who provides the levying officer with an affidavit swearing or affirming all of the following:

(1) That the person will occupy the residential property offered at sale under this chapter as the person's primary residence within sixty days of recording of a deed to the residential property or issuance of an order pursuant to division (C) of section 2329.31 of the Revised Code;

(2) That the person will maintain the person's occupancy at the residential property for at least one year;

(3) That the person is not the mortgagor, or the child, spouse, or parent of the mortgagor;

(4) That the person is not acting as the agent of any other person or entity in purchasing the real property.

An eligible tenant-buyer may qualify as a prospective owner-occupant.

(C) Notwithstanding section 2329.53 of the Revised Code, if residential property sold at public sale on order of sale pursuant to this chapter contains one to four single-family units, and the successful bidder at the public sale is not a prospective owner-occupant, the levying officer shall not return the writ of execution pursuant to sections 2329.28 and 2329.53 of the Revised Code until the earliest of the following dates:

(1) The date that is sixteen days after the date of the public sale, unless at least one eligible tenant-buyer or eligible bidder submits, and the levying officer receives, a bid pursuant to division (D) or (E) of this section or a nonbinding written notice of intent to place such a bid. To be effective, a written notice of intent to place a bid must be sent to the levying officer by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date and must be received by the levying officer not more than fifteen days after the date of the public sale.

(2) The date upon which all eligible tenant-buyers are deemed the successful bidders pursuant to division (D) of this section or an eligible bidder is deemed the successful bidder pursuant to division (E) of this section.

(3) The date that is forty-six days after the date of the public sale.

(D) If residential property sold at public sale on order of sale pursuant to this chapter contains one to four single-family units, eligible tenant-buyers, if any, are deemed to have submitted the successful bid at the public sale of residential property sold on order of sale under this chapter if both of the following are true:

(1) The successful bidder at the public sale was not a prospective owner-occupant.

(2) Not more than forty-five days after the date of the public sale, the levying officer receives both of the following from a representative of all eligible tenant-buyers, by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date:

(a) A bid in an amount equal to the full amount of the successful bid at the public sale, in the form of cash, a cashier's check drawn on a state or national bank, a cashier's check drawn on a state or federal credit union, or a cashier's check drawn on a state or federal savings and loan association, savings association, or savings bank specified and authorized to do business in this state;

(b) An affidavit stating that the persons represented are eligible bidders as defined by this section and the facts supporting that statement. The levying officer may reasonably rely on this affidavit.

The levying officer shall return all unsuccessful bids from eligible tenant-buyers to the bidders that submitted them not later than the date the levying officer returns the writ of execution.

(E) If residential property sold at public sale on order of sale pursuant to this chapter contains one to four single-family units, an eligible bidder is deemed to have submitted the successful bid at the public sale if, not more than forty-five days after the date of the public sale, all of the following are true:

(1) The successful bidder at the public sale was not a prospective owner-occupant.

(2) No eligible tenant-buyers are deemed to have submitted the successful bid pursuant to division (D) of this section.

(3) The levying officer receives both of the following from the eligible bidder, by certified mail, overnight delivery, or other method that allows for confirmation of the delivery date:

(a) A bid in an amount that exceeds the successful bid at the public sale and all other bids submitted by other eligible bidders, in the form of cash, a cashier's check drawn on a state or national bank, a cashier's check drawn on a state or federal credit union, or a cashier's check drawn on a state or federal savings and loan association, savings association, or savings bank and authorized to do business in this state;

(b) An affidavit stating that the bidder is an eligible bidder as defined by this section, and the facts supporting that statement. The levying officer may reasonably rely on this affidavit.

The levying officer shall return all unsuccessful bids from eligible bidders to the bidders that submitted them not later than the date the levying officer returns the writ of execution.

(F) If residential property sold pursuant to this chapter contains one to four single-family units, and the successful bidder at the public sale is not a prospective owner-occupant, then:

(1) Not later than two calendar days after the date of the public sale of residential property, the levying officer or an authorized agent shall post on the web site set forth on the notice of sale, as required by section 2329.261 of the Revised Code, the following information:

(a) The date on which the public sale took place;

(b) The amount of the successful bid at the public sale;

(c) An address at which the levying officer can receive documents sent by United States mail and by a method of delivery providing for overnight delivery.

(2) The information required to be posted on the web site under division (F)(1) of this section shall also be made available not later than two calendar days after the date of the public sale of the residential property by calling the telephone number set forth on the notice of sale as required by section 2329.261 of the Revised Code.

(3) The information required to be provided under divisions (F)(1) and (2) of this section shall be made available using the file number assigned to the case that is set forth on the notice of sale as required under division (A)(1) of section 2329.261 of the Revised Code.

(4) The information required to be provided under divisions (F)(1) and (2) of this section shall be made available for a period of not less than forty-five days after the date of the sale.

(5) A disruption of any of these methods of providing the information required under divisions (F)(1) and (2) of this section to allow for reasonable maintenance or due to a service outage shall not be considered to be a violation of division (F)(1), (2), or (4) of this section.

(G) A prospective owner-occupant does not commit perjury by submitting an affidavit under this section if the prospective owner-occupant cannot occupy the property as the person's primary residence within sixty days of the deed to the property being recorded pursuant to section 2329.31 of the Revised Code because an action under Chapter 1923. of the Revised Code or a writ of possession from the court that entered the order of sale is needed to obtain possession of the property.

Section 2. That existing section 2329.27 of the Revised Code is hereby repealed.