Requiring a demolition bond in foreclosure actions. (FE)

What it would have done

Summary by the Legislative Reference Bureau, the Legislature's nonpartisan drafting office. It's their wording, not ours.

The statutes specify a procedure for municipalities (cities, villages, and towns) to follow for the razing of old, dilapidated, or out-of-repair buildings. The municipality may order the owner of such a building to repair it, if the building can be made safe by reasonable repairs, or to raze it. If the cost of repair would exceed a specified percentage in relation to the assessed value of the building, repairs are presumed unreasonable. The order is served on the owner like a summons and specifies a time within which the repairing or razing must be done. If the owner does not comply with the order, the municipality may commence a legal action for a court order requiring the owner to raze the building or may proceed to raze the building through a public agency or by contract with a private party. The cost of razing the building may be charged against the real estate on which the building was located and, if so, becomes a lien on the real estate and may be assessed and collected as a special charge. A first class city (Milwaukee) may enact ordinances with alternative or additional provisions governing razing buildings.

This bill requires the plaintiff in a mortgage foreclosure action to post a surety bond with the clerk of circuit court when the action is commenced. The bond is to guarantee reimbursement by the plaintiff to the municipality in which the property in foreclosure is located for up to $15,000 in costs incurred by the municipality if the municipality razes a building on the property during the foreclosure action. The clerk is required to return the bond to the plaintiff if a building on the property is not razed before the first of any of the following occurs: 1) the foreclosure action is dismissed; 2) the mortgagor redeems the property (pays the amount owed); or 3) the court confirms the sale of the property at the end of the foreclosure action. The bill prohibits any of the costs incurred by the plaintiff from being recovered from the mortgagor or from being included in the amount of the judgment, in the amount of any deficiency, in the amount that the mortgagor must pay to redeem the property, or in the costs of the foreclosure action.

Who's behind it

2 senators are its authors⁠. All 2 are Democrats.

12 more lawmakers signed on in support⁠.

What it would cost

State agencies filed a cost estimate. Each opens as a PDF from the Legislature.

• Fiscal Estimate From DOR