Bulletin: IN000011

Date:
July 22, 2003
To:
All Issuing Offices in Indiana
RE:
Legislative Update - 2003

Dear Associates:

The following information is an update of recent legislation by the Indiana General Assembly. This listing is by no means comprehensive as to all new legislation dealing with real property and includes only legislation that, in the opinion of the undersigned, will be of interest or significance to Stewart Agents. Please distribute this information to your escrow officers, title examiners, title officers, searchers and anyone else that you feel should know about it. If you have any questions or would like a copy of particular legislation, please contact me with your inquiries.

ALIENS

I.C. 32-22-2-5; I.C. 32-22-2-2 (REPEALED), I.C. 32-22-2-3 (REPEALED), I.C. 32-22-2-4 (REPEALED; I.C. 32-22-2-6 (REPEALED)"
(HEA 1729)
Effective Date: July 1, 2003

Restrictions on the rights of natural persons who are aliens to acquire and hold real property are repealed.

BUILDING PERMITS

I.C. 36-2-4-8; I.C. 36-4-6-14; I.C. 36-5-2-10
(HEA 1353)
Effective Date: July 1, 2003

An ordinance passed by the legislative body of a county, city or town increasing a building permit fee on new development must delay any fee increase until 90 days after the ordinance is published.

CONSTRUCTION-FLOODWAY

I.C. 14-28-1-26.5
(HEA 1222)
Effective Date: July 1, 2003

A new residence may be constructed in a floodway along the Ohio River if criteria set forth in the regulations of the National Flood Insurance Program regulations are satisfied. Former law allowed placement of manufactured housing within a floodway but did not allow new houses to be constructed. The lowest floor of a new residence constructed in a floodway along the Ohio River must be at least two feet above the 100 year frequency flood elevation.

CORPORATIONS

I.C. 23-1-29-4.5 (NEW); I.C. 23-1-38.5-13
(SEA 383)
Effective Date: July 1, 2003

Controlling shareholders of a corporation not registered under the Security and Exchange Act of 1934 may authorize a corporate action by written consent, without prior notice or a meeting, if notice is provided after-the-fact to non-consenting and nonvoting shareholders. Electronic consent is acceptable. A "domestic or foreign other entity" such as a limited liability partnership or limited liability company may convert to a different "domestic or foreign other entity".

CUSTODIAL TRUST

I.C. 30-2-8.6 (NEW); I.C. 30-2-15 (NEW); I.C. 34-30-2-129.8 (NEW)
(HEA 1115)
Effective Date: July 1, 2003

Adopts the Uniform Custodial Trust Act similar to the Uniform Transfer to Minor's Act but applicable to adults. Adds provisions allowing an income trust to be converted to a total return unitrust and a total return unitrust to be converted to an income trust.

DISCLAIMER

I.C. 32-17.5 (NEW); I.C. 32-17-7 (REPEALED)
(HEA 1117)
Effective Date: July 1, 2003

Adopts the Uniform Disclaimer of Property Interest Act for Individuals. Repeals existing statutes concerning disclaimer of property interests. One significant change is that the prior nine month deadline for making the disclaimer has been eliminated. The new statute also addresses the disclaimer of a wider range of property interests and powers over property.

ELECTION AGAINST WILL-SUBSEQUENT CHILDLESS SPOUSE

I.C. 29-1-3-1
(HEA 1368)
Effective Date: July 1, 2003

A subsequent childless spouse of a person who dies after June 30, 2003, receives an elective share in an amount equal to 25% of the fair market value, as of the date of death of testator, of the lands of the deceased.

ELECTRONIC MAIL

I.C. 24-5-22 (NEW); I.C. 34-30-2-96.5 (NEW)
(HEA 1083)
Effective Date: July 1, 2003

All unsolicited commercial e-mails sent in Indiana or to Indiana computers must have a code in the subject field clearly identifying the message as an advertisement-ADV:- or as an adult-oriented ad "ADV:ADLT. Applies to emails sent to promote the sale or lease of real property, goods or services. Emails subject to the new law must allow recipients to refuse to get any further emails from the sender and may not contain a phony subject line such as "Re: Your Request". A recipient of an unsolicited commercial e-mail or an internet service provider has a right of action against the sender if the message violates this statute. Violators can be assessed a civil penalty of $500.00 per offense.

FENCES

I.C. 32-26-9-0.5 (NEW); I.C. 32-26-9-6
(SEA 0292)
Effective Date: July 1, 2003

The duty to build, repair, rebuild and maintain partition fences only applies if at least one adjoining parcel is agricultural land as defined by statute.

FOREIGN JUDGMENTS

I.C. 34-6-2-48.3 (new) I.C. 34-54-11 (new) I.C. 34-55-9-2 (reference)
(HEA 1102)
Effective Date: July 1, 2003

A certified and sealed copy of a judgment decree or order of a 1) U.S. court, 2) a court of another state, or 3) another court to which Indiana extends full faith and credit, filed in the office of the clerk of any court of record in county where debtor resides or owns property constitutes a judgment lien against debtor's property in that county. A judgment creditor filing a foreign judgment is required to file an affidavit with the clerk of court setting forth the name and last known address of the judgment creditor and debtor. The judgment creditor must send notice of the filing in accordance with Indiana Trial Rules 4 through 4.17. The judgment creditor cannot execute on the judgment until twenty one (21) days after entry of judgment in the judgment's original jurisdiction. The judgment debtor has twenty one (21) days after receiving notice of the filing to file a notice with the court asserting any defense with respect to execution of judgment in the original jurisdiction. The Court is required to stay enforcement of foreign judgment if debtor shows that an appeal is pending or will be taken or a stay of execution has been granted and debtor has furnished security for the judgment required by the jurisdiction in which the judgment was originally rendered. The judgment debtor may also show grounds upon which enforcement of a judgment of a court in Indiana would be stayed and provide court security in order to stay execution. The judgment creditor may still bring an action to enforce a foreign judgment by other means.

HOME BUILDERS

I.C. 32-27-3 (NEW)
(sea 451)
Effective Date: July 1, 2003

Homeowners must notify a builder in writing of any alleged defects at least sixty (60) days prior to filing a lawsuit. Builders must respond in writing to the claim within 21 days of receiving notice of a claim. The new statute is applicable to homeowners who have either purchased a new home or have had remodeling work done at a cost which exceeds 50% of the assessed value of the residence.

HOME INSPECTORS

I.C. 25-1-2-2.1; I.C. 25-1-2-6; I.C. 25-1-6-3; I.C. 25-1-7-1; I.C. 25-1-8-1; I.C. 25-1-11-1; I.C. 25-20.2 (NEW); I.C. 25-34.1-2-5; I.C. 25-34.1-2-6; I.C. 25-34.1-3-9; I.C. 25-34.1-8-6; I.C.25-34.1-8-7.5 (NEW); I.C. 25-34.1-8-15 (NEW); I.C. 34-30-2-98.8 (NEW)
(HEA 1515)
Effective Date: July 1, 2003 (Section 16 effective May 5, 2003)

The home inspectors licensing board to regulate home inspectors is established. The Governor has until July 1, 2004 to make appointments to the board. The new provisions set forth the requirements to be a licensed home inspector. A person who performs home inspections for compensation without a license commits a Class B infraction. A civil action based upon professional services performed must be filed within two (2) years after date cause of action accrues. An investigative fund for the investigation of real estate and appraisal fraud is established to be jointly administered by the attorney general and the professional licensing agency.

IDENTIFICATION

I.C. 9-14-3-5; I.C. 9-24-11-5; I.C. 9-24-16-3; I.C. 9-24-11-6 (repealed); I.C. 9-24-13-2 (repealed)
(HEA 1968)
Effective Date: July 1, 2003

The bureau of motor vehicles may not disclose a reproduction of the signature required for a driver's license, permit or state identification card. A state identification card must contain a reproduction of the signature of the individual identified.

IDENTITY THEFT

I.C. 35-43-5-1; I.C. 35-43-5-3.5; 35-38-1-2.5 (NEW)
(sea 320)
Effective Date: July 1, 2003

For crimes committed after June 30, 2003: 1) a person's address, telephone number, place of employment, employer identification number and mother's name are identifying information for purposes of the identity theft statute and, 2) a person commits identify theft if the person acts with intent to assume another person's identity or profess to be another person. The trial court, upon motion, may issue an order describing the victims of a crime of deception in order to correct the victim's credit history.

INTESTATE SUCCESSION

I.C. 29-1-2-1
(HEA 1368)
Effective Date: July 1, 2003

Removes the term "net" in defining the estate of a person dying intestate. Changes the amount received by a subsequent childless spouse in real estate from a life estate in one-third to an amount equal to twenty-five percent (25%) of the fair market value as of the date of death of the land owned by decedent with the fee to vest in children from prior spouse or their descendants. Applies to estates of decedents dying after June 30, 2003.

INSURANCE

I.C. I.C. 27-2-21 (New); I.C. 27-4-1-4;
(SEA 178)
Effective Date: July 1, 2003

Restricts insurer's use of credit reports in the underwriting of property and casualty insurance. Excludes commercial insurance from the requirements and restrictions.

LIENS-MEDICAID

I.C 12-15-8.5-2; I.C. 12-15-8.5-3; I.C. 12-15-8.5-6; I.C. 12-15-8.5-7; I.C. 12-15-8.5-8; I.C. 12-15-8.5-12 (new); I.C. 12-15-9-0.5; I.C. 12-15-9-0.7
(hea 1001)
Effective Date: July 1, 2003

A medicaid lien is subordinate to the security interest of a financial institution that loans money to be used as operating capital for the operation of a farm, a business, or income producing real property. Homes in which an individual caregiver, other than a paid caregiver, resided for at least two (2) years prior to the recipient's admission to the nursing facility are no longer exempt from a Medicaid lien. A Medicaid lien continues from the date of filing until the lien is satisfied or released. A Medicaid lien automatically expires if a foreclosure action is not commenced within two (2) years after recipient's death. The provision that formerly prohibited enforcement of the Medicaid lien if the recipient was survived by a spouse, certain children or a parent is removed. Lien may be removed by providing written notice to the State of Indiana to file an action to foreclose the lien. If the state does not foreclose the lien within thirty (30) days after receiving the notice, the lien is void. An affidavit setting forth the facts of the notice and that thirty (30) days have passed since the notice was received and no foreclosure action is pending may be recorded in order to remove the lien. Lien may be enforced against joint tenancy with right of survivorship property passing on the death of the recipient to the value of the property in excess of $75,000.00 (under prior law, the amount was $125,000.00)

LIENS-SEWER

I.C 36-9-23-33
(hea 1243)
Effective Date: July 1, 2003

A municipal officer responsible for collecting municipal sewer fees may record and certify liens relating to delinquent sewer fees by using either a list or individual instruments. A municipal officer in cities other than consolidated cities (Indianapolis) must certify the liens to the county auditor no later than ten (10) days after recording of the list or instrument.

MANUFACTURED HOMES

I.C. 9-13-2-96; I.C. 9-17-6-15.1 (new); I.C. 9-17-6-15.3 (new); I.C. 9-29-4-5.5 (New); I.C. 9-29-4-7; I.C. 36-2-11-14
(HEA 1748)
Effective Date: July 1, 2003

A person who holds title to a manufactured home that is attached to a permanent foundation and that falls within the definition of manufactured home under the federal manufactured Housing Construction and Safety Standards Law of 1974 (42 U.S.C. 5402 (6) may apply for an affidavit of transfer to real estate with the Bureau of Motor Vehicles. The filing of the affidavit with the certificate of title in the county recorder's office is deemed a conversion of the manufactured home to an improvement upon the real estate upon which it is located. The affidavit must be endorsed by the Auditor prior to being accepted for recording.

MECHANIC'S LIENS

I.C. 32-28-3-1;
(sea 202)
Effective Date: July 1, 2003

A contract to prepare property for Class 2 residential construction may include a provision that a lien may not attach to the real estate or building of the owner.

MORTGAGES

I.C. 32-29-6-17
(HEA 1085 and SEA 259)
Effective Date: July 1, 2003

Removes the expiration date (formerly July 1, 2002) governing mortgage releases by title insurance companies.

MORTGAGES-EQUITABLE
SUBROGATION

I.C. 32-29-1-11
(hea 1365 and sea 202)
Effective Date: July 1, 2003

A mortgagee may not be denied equitable subrogation solely because the mortgagee is a lender and had constructive notice of the intervening lien, the lien was released, or the mortgagee obtained title insurance. The new law does not apply to a municipal sewer lien under IC 36-9-23 or a mechanic's lien under IC 32-28-3-1. This legislation addresses issues raised in a line of Indiana cases that denied lenders equitable subrogation for the reasons specified in the revised statute.

ORDINANCE VIOLATION LIEN

I.C. 36-1-6-2
(HEA 1473 and HEA1378)
Effective Date: July 1, 2003

The expense incurred by a municipal corporation to bring real property into compliance with an ordinance is a lien on the property. Prior law provided that the expenses incurred may be made a lien against the property. The lien is superior to all other liens except liens for taxes in amount not to exceed: 1) Two thousand five hundred dollars ($2,500.00) for unimproved land or land that contains one or more occupied or unoccupied single or double family dwellings or appurtenances or additions to those dwellings (such as garage or shed), and 2) Ten thousand dollars ($10,000) for all other real property (i.e. commercial). All persons holding a substantial interest in the property must be given a reasonable opportunity of a least ten (10) days but not more than sixty (60) days to bring property in compliance before action is taken. Bills not paid after thirty (30) days may be certified to the county auditor to be collected as delinquent taxes.

ORDINANCE -ENFORCEMENT BY COMMUNITY ORGANIZATIONS

I.C. 32-30-5-7; I.C. 36-1-6-2; I.C. 36-7-9-2; I.C. 36-7-9-5; I.C. 36-7-9-7; I.C. 36-7-9-10; I.C. 36-7-9-17; I.C. 36-7-9-20; I.C. 36-7-9-26; I.C. 36-7-15.1-15.1; I.C. 36-7-17-2; I.C. 36-7-17-5; I.C. 36-7-17-6; I.C. 36-7-17-7; I.C. 36-7-17-9
(HEA 1378)
Effective Date: July 1, 2003 (Section 16 and 17 effective May 7, 2003)

Community organizations have standing to commence civil actions to promote compliance with ordinances when permitted by the enforcing agency. Community organizations may acquire dwellings through urban homesteading for rehabilitation and sale while allowing priority to individuals that are interested in the same dwelling. An order issued by an enforcement authority under the unsafe building law concerning repair and rehabilitation of an unsafe building to bring it into compliance becomes final ten (10) days after notice is given unless a hearing is requested in writing. Orders must allow property owners at least ten (10) but not more than sixty (60) days to accomplish actions to comply with ordinances. A receiver in possession of unsafe premises is allowed to sell the property, make repairs, and have a lien that is equal to the total amount expended. A municipal corporation and enforcement authority may maintain a registry of properties within its jurisdiction that violate local ordinances and are eligible for enforcement procedures. The owners of property recorded in the registry must provide an address for service of process and the name and address of the insurance carrier providing insurance coverage on the property. New enforcement activities made possible under the new law that affect a property recorded in a registry of properties may not be initiated by the municipal corporation or enforcing authority until October 1, 2003.

PRESUMPTION OF DEATH-NOTICE

I.C. 29-2-5-1
(HEA 1116)
Effective Date: July 1, 2003

Changes the publication of notice requirements for a court to presume that a person is dead from 30 days to once each week for three (3) consecutive weeks.

PROBATE MATTERS

I.C. 6-4.1-5-10; I.C. 29-1-1-3; I.C. 29-1-2-2 (REPEALED)
(HEA 1368)
Effective Date: July 1, 2003

The order of the court in inheritance tax matters is confidential. Changes the definition of "claims" to remove the reference to inheritance taxes and replace it with "taxes imposed by reason of the person's death". In determining "net estate" for purposes of the intestate or elective share, death taxes are not subtracted from the total estate to determine the net estate. The definition of "net estate" is revised to read " real and personal property of a decedent less the allowance provided under I.C. 29-1-4-1 and enforceable claims against the estate" rather than "exclusive of" the allowances. Repeals a provision concerning the portion of the estate a widow receives free from claims by creditors.

RECORDING FEES

I.C. 36-2-9-18
(SEA 238)
Effective Date: July 1, 2003

A county legislative body may adopt an ordinance authorizing the county auditor to charge a maximum fee of $5.00 for each deed or legal description of each parcel contained in a deed for which the auditor makes an endorsement required by I.C. 36-2-11-14.

RESIDENTIAL SALES DISCLOSURE FORM

I.C. 32-21-5-7
(HEA 1167)
Effective Date: May 2003

Requires the Indiana Real Estate Commission to revise the Residential Real Estate Sales Disclosure form to include disclosure of additions that may require improvements to the sewage disposal system.

SMALL CLAIMS-JURISDICTION

I.C. 33-4-3-7; I.C. 33-5-2-4; I.C. 33-10.1-6-10; I.C. 33-10.5-7-1; 33-11.6-4-2; I.C. 33-11.6-4-3; I.C. 33-19-5-5; I.C. 33-19-7-1; I.C. 33-19-7-2; I.C. 33-19-7-3; I.C. 33-19-7-4
(HEA 1047)
Effective Date: July 1, 2005

Makes the small claims jurisdictional limit $6,000.00 across the state. A person who files a small claims action must pay a small claims service fee of $5.00 per defendant after June 30, 2005.

SUBDIVISION

I.C. 36-7-3-2
(SEA 267)
Effective Date: July 1, 2003

The county executive of a county without a plan commission may establish reasonable standards for development of a subdivision and approve or disapprove a subdivision plat based upon compliance with the standards. The county executive must hold a public hearing to approve or disapprove a subdivision plat based upon the established standards.

TAXES

I.C. 6-1.1-27-1;
HEA 1219
Effective Date: May 8, 2003

Counties that did not complete reassessment by the statutory completion date may send property owners a provisional tax bill based upon 50% of the prior year tax liability. The county commissioner may approve a greater percentage not to exceed 70%.

TAX EXEMPTIONS

I.C. 6-1.1-10-16; I.C. 6-1.1-10-21; I.
C. 6-1.1-10-36.3; I.C. 6-1.1-11-3; I.C. 6-1.1-11-3.5; I.C. 6-1.1-11-3.8 (NEW); I.C. 6-1.1-11-5; I.C. 6-1.1-11-6; I.C. 6-1.1-11-7; I.C. 6-1.1-11-8; I.C. 6-1.1-11-10; I.C. 6-1.1-21-4; I.C. 14-33-7-4;
(HEA 2005)
Effective Date: July 1, 2003 (Section 14 and 15 effective May 8, 2003)

Most acreage limitations in the determination of property tax exemptions are eliminated. Land is exempt from property taxes under certain circumstances for the retention and preservation of land and water or if land is used for parking that serves an exempt building. Active pursuit toward erection of a building is required for exemption of a land purchased for construction of building to be used for exempt purposes. Identification of the use of each part of the property must be included in an exemption application. The determination of use and exemption applies separately to each part of the property identified in the application. Establishes a procedure to require that property for which an exemption application is filed is properly assessed. Requires the reporting of leases of exempt real property to the county assessor. Amends various sections to require filing of exemption application with the county assessor instead of the county auditor. Allows a refund for taxes payable in 2001 for certain churches or religious organizations.

TAX SALE

I.C. 6-1.1-24-2; I.C. 6-1.1.24-6; I.C. 6-1.1.-24-6.1 (NEW); I.C. 6-1.1.24-6.3 (NEW); I.C. 6-1.1-24-6.4 (NEW); I.C. 6-1.1.-25-1; I.C. 6-1.1-25-2; I.C. 6-1.1.-25-2.5; I.C. 6-1.1.-25-3; I.C. 6-1.1-25-4; I.C. 6-1.1.-25-4.5; I.C. 6-1.1.25-4.6; I.C. 6-1.1.-25-7; I.C. 6-1.1.25-8; I.C. 6-1.1-25-10; I.C. 6-1.1.-25-11; I.C. 36-1-11-5; I.C. 36-10-3-23;
(HEA 1161)
Effective Date: July 1, 2003

A county may sell one or more tracts together as a condition of sale. A county may sell the tax sale certificate on property that has not sold for the minimum price at two tax sales for less than the minimum price. Increases the maximum assessed value of property that can be sold to an abutting landowner from $5,000 to $10,000.00. Increases the threshold under which an appraisal is not required from $2,000 to $6,000 in assessed value. The purchase price of real property financed by the issuance of bonds may not exceed the average of two appraisals of the fair market value of the land.

UNCLAIMED PROPERTY

I.C. 32-34-1-1; I.C. 32-34-1-20; I.C. 32-34-1-26; I.C. 32-34-1-28; I.C. 32-34-1-31; I.C. 32-34-1-32; I.C. 32-34-1-33; I.C. 32-34-1-36; I.C. 32-34-1-36.5 (NEW)
(SEA 0026)
Effective Date: July 1, 2003

The Attorney General may sell unclaimed property at a commercially reasonable public sale. The language "commercially reasonable" is a new addition. Makes other changes to the unclaimed property law.

TRUSTS

I.C. 30-4-2.1 (NEW)
(HEA Act 1116)
Effective Date: July 1, 2003

Establishes various rules for interpreting trust provisions with respect to adopted children, disinherited beneficiaries, omitted beneficiaries, lapse of specific gifts, descendants and kindred of half blood.

WILL EXECUTION

I.C 29-1-5-3; I.C. 29-1-5-3.1 (NEW); I.C. 29-1-5-3.2 (NEW); I.C. 29-1-5-6; I.C. 29-1-5-9; I.C. 29-2-5-1;
(HEA Act 1116 as amended by HEA 1368)
Effective Date: July 1, 2003 (Sections 9-12 in HEA 1368 effective May 8, 2003)

Retroactive: Applies to all wills executed either before, on or after July 1, 2003. Recognizes as a valid will, a will executed by the testator and two witnesses or a will executed through a self-proving clause under the old language or the self-proving clause under the new language.

ZONING-TRIAL COURT REVIEW

I.C. 36-7-4-1003; I.C. 36-7-4-1005; I.C. 36-7-4-1006; I.C. 36-7-4-1210.6 (NEW)
(SEA 201)
Effective Date: July 1, 2003

A review of a land use decision of a legislative body or the board of zoning appeals by certiorari is initiated by filing a petition with the court. Sets forth the persons that a remonstrator must notify of the filing of the writ of certiorari. An adverse party is not required to be named as a party to the petition for writ of certiorari. A person who is not an elected official may be appointed to serve on an advisory plan commission created by joinder agreement in order to fill a vacancy of a commission member who is a member of a local legislative body if no member of the local legislative body will accept the appointment.

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.