Tennessee 2015 Legislation as of May 25, 2015

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1 Tennessee 2015 Legislation as of May 25, 2015 The Tennessee General Assembly convened January 13, 2014 and adjourned April 22, Below is an end of the session update on bills of importance to the default servicing community. TN House Bill 29 / Senate Bill 67: permits a landlord to provide three days notice as sufficient notice of termination of tenancy for eviction of certain residential tenants if the tenant or any other person on the premises with the tenant s consent willfully or intentionally commits a violent act, has engaged in any drug-related criminal activity, behaves in a manner that constitutes or threatens to be a real and present danger to the health, safety, or welfare of the life or property of other tenants, the landlord, the landlord s representatives, or other persons on the premises (exempts residential tenants who are mentally or physically disabled). This applies only to those counties not governed by the Uniform Residential Landlord Tenant Act, which applies only to counties having a population of more than 75,000 which includes Anderson, Maury, Sevier, Madison, Bradley, Wilson, Washington, Blount, Sullivan, Montgomery, Williamson, Rutherford, Hamilton, Knox, Davidson, and Shelby counties. This bill was signed by the Governor and it took effect on April 16, Default Servicing Impact: Minimal.

2 TN House Bill 214 / Senate Bill 331: This bill amends T.C.A. Title 67, Chapter 5 (1) For occupied properties, the redemption period will be one year; (2)(A) For unoccupied parcels that are not vacant and abandoned, the redemption period will be determined for each parcel based on the period of property tax delinquency. If the period of delinquency is five years or less, the redemption period will be one year from the entry of the order confirming the sale; (B) If the period of delinquency, as described in (2)(A), is more than five years but less than eight years, the redemption period will be 180 days from the entry of the order confirming the sale; and (C) If the period of delinquency, as described in (2) above, is eight years or more, the redemption period will be 90 days from the entry of the order confirming the sale; and (3) For all property that is vacant and abandoned, the redemption period will be 30 days from the entry of the order confirming the sale without regard to the number of years of delinquent taxes owned on the property, beyond that required to make the property legally eligible for the sale. This bill was signed by the Governor and it took effect on May 20, Default Servicing Impact: Potentially Significant. This impacts properties where taxes have not been paid and the property has been sold at tax sale. This bill changes the timelines for redeeming the property from the tax sale purchaser. If not followed strictly, the deed of trust could be wiped out in its entirety after the redemption period ends. TN House Bill 264/ Senate Bill 424: This bill deletes obsolete sections of Tennessee s property tax code section and re-states that property taxes shall be based on the value of the property. This bill was signed by the Governor and it took effect on March 27,

3 TN House Bill 531/ Senate Bill 172: Amends T.C.A. Title 56, Chapter 8 to clarify that no person loaning money that is secured by real property shall require insurance that exceeds the value of the structures or the expected value of the structures on the real property. This bill was signed by the Governor and it took effect on April 21, TN House Bill 607 / Senate Bill 619: Clarifies the definition of interested parties who are to receive notice of sales of real property by amending several sections of Tennessee Code to affect foreclosures, tax sales. The definition of Parties interested would also include a person or entity named as nominee or agent of the owner of the obligation that is secured by the deed of trust and that is identifiable from information provided in the deed of trust, which shall include a mailing address or post office box of the nominee or agent. This bill was signed by the Governor and it took effect on April 20, Default Servicing Impact: Minimal. This bill is intended to include more parties that require notice in the foreclosure and tax sale process. It does not change the FC notice requirements other than to require potentially more entities that receive notice. TN Senate Bill 717 / House Bill 796: Requires a seller of real property, prior to entering into a contract with a buyer, to disclose to a buyer the presence of any known sinkhole on the property. This bill was signed by the Governor and is effective July 1, TN Senate Bill 770/ House Bill 1290: Authorizes reports of sale to be prepared in connection with sales of delinquent tax property to be recorded so that everyone is on notice that a tax sale was held as well as the purchaser information. This bill was signed by the Governor and is effective July 1, Default Servicing Impact: Minimal.

4 TN House Bill 793 / Senate Bill 1296: Prohibits the transfer of a possibility of reverter or rightof-entry by a holder other than the original grantor unless the transfer is to the holder of the corresponding fee simple determinable or fee simple subject to condition subsequent for the purpose of merger of the interests in any grantee. This bill was signed by the Governor and it took effect on March 19, TN Senate Bill 877 / House Bill 1183: Revises two sections of the Mechanics and Materialmen s Liens statute that are clerical and procedural in nature. This bill was signed by the Governor and it took effect on April 10, TN House Bill 1153 / Senate Bill 1173: This bill extends present use valuation of certain residential property zoned for commercial use to the unmarried surviving spouse, occupying the property as a surviving joint tenant or tenant by the entirety. This bill was signed by the Governor and it took effect on May 18, (Note: The Act shall apply only to tax years beginning on or after January 1, 2015). TN Senate Bill 1216 / House Bill 1254: This bill authorizes courts to combine or subdivide properties for tax sale purposes as well as clarifies the procedure for dealing with excess tax sale proceeds. This bill was signed by the Governor and it took effect on May 8, Default Servicing Impact: Minimal

5 DEAD LEGISLATION: TN Senate Bill 41 / House Bill 144 and Senate Bill 649 /House Bill 141: Creates advisory task forces to study and report recommendations on e-filing of documents in state courts. SB 41 was passed and transmitted to House on April 8; however, no actions were taken by the House since then. HB 144 did not come out of Finance, Ways & Means Subcommittee. SB 649 was passed and transmitted to House on April 1; however, no actions taken by the House since then. HB 141 did not make it of Finance, Ways & Means Subcommittee. TN House Bill 236/ Senate Bill 306: This bill creates the Uniform Real Property Transfer on Death Act that allows an individual to transfer property to one or more beneficiaries effective at the transferor s death by a transfer on death deed. HB 236 died in subcommittee; SB 306 did not make it out of committee. TN House Bill 317 / Senate Bill 496: Prohibits short-term lenders from assessing an interest rate, for any short-term lending transaction, that exceeds 28 percent per year. Action on HB 317 in Insurance and Banking Subcommittee has been deferred to 2016; SB 496 did not make it out of committee. TN House Bill 428 /Senate Bill 438: Creates the Landowner s Bill of Rights. Directs the Office of the Attorney General to prepare a written statement of a property owner's rights during any condemnation proceeding and to post the statement on its web site; requires that the statement be sent together with any notice of the filing of a petition to institute condemnation proceedings. HB 428 failed in subcommittee and SB 438 was withdrawn from the general calendar. TN Senate Bill 465 / House Bill 898: Enacts the "Tennessee Uniform Real Property Transfer on Death Act" which authorizes real property and motor vehicles to be transferred upon an owner's death to a designated beneficiary. SB 465 did not make it out of subcommittee and HB 898 was taken off notice for calendar in subcommittee. TN House Bill 479 / Senate Bill 1047: Requires that a deed for the conveyance of real property be prepared and filed by a licensed attorney or the owner of the property; requires the county register to verify a deed is properly prepared before it is registered and to note the verification

6 on the deed. HB 479 did not make it out of committee and SB 1047 failed in Senate Judiciary Committee. TN House Bill 610 / Senate Bill 405: Enacts the Tennessee Homeowner s Association Act to establish rules, regulations, guidelines, and penalties for the creation and governance of HOAs. Condos and timeshares are exempt from this act. Liens for assessments as well as priority and foreclosure of said liens will be the main item to watch in this bill. Action on HB 610 in Business and Utilities Subcommittee has been deferred to 2016; SB 405 died in subcommittee. TN House Bill 737 / Senate Bill 1231: Abolishes the common law doctrine of necessities establishing that no spouse shall be liable for the other spouse's debt arising solely by reason of the marriage. HB 737 and SB 1231 did not make it out of subcommittees. TN Senate Bill 909 / House Bill 943: Makes a governmental entity immune from liability for all dues, fees, and assessments for all parcels purchased at tax sales. SB 909 and HB 943 did not make it out of subcommittees. TN Senate Bill 939 / House Bill 459: Requires a county that is ordered to make a refund of property taxes pursuant to a final action of a court or the state board of equalization or assessment appeals commission to deliver the refund by United States certified mail, return receipt requested. SB 939 did not make it out of subcommittee; action on HB 459 in Finance, Ways & Means Subcommittee has been deferred to TN Senate Bill 1027 / House Bill 1068: Creates a state-wide internet publication registry by requiring all legal notices required by statute, including notices of foreclosure sale, to be published in a newspaper of general circulation to be posted on the administrative register web site within the secretary of state's web site by the entity required to post such notice. SB 1027 and HB 1068 did not make it out of committee.

7 TN Senate Bill 1079: Requires a homeowner s association to provide certain records to a unit owner upon written request and if the association does not provide the requested information within 15 days then there they will be subject to a $500 fine. This bill did not make it out of committee.