Dear Associates:
The following information is an update of recent legislation by the Indiana General Assembly. 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.
BUSINESS ENTITIES
Limited Liability Companies (LLC)
I.C. 23-18-3-1 et seq. (SEA 571)
Effective: July 1, 1999
Unless otherwise provided in a written operating agreement, an interest in the LLC is assignable without dissolving the LLC and without providing membership status to the assignee. I.C. 23-18-6-3. The assignee has no liability unless membership is conferred upon the assignee. The members can unanimously consent to extend membership to the assignee. I.C. 23-18-6-3.1 and 4.1 The wind up procedures of the LLC are described in I.C. 23-18-9-1.1 and are based upon the operating agreement, written consent of 2/3 interested members or each class of members, and/or a court decree of dissolution. The personal representative of an LLC's last surviving member may agree in writing to continue the company's business and to become a member of the LLC.
Nonprofit Public Benefit Corporation
I.C. 6-1.1-10-16.5 (HEA 1056)
Effective: January 1, 1999
This type of corporation can own real property that is exempt from property taxation if the land is located in a county with a population between 18,500 and 18,1820 or 23,000 and 23,500. The requirements for the exemption are: A.) a tract of land under or adjacent to a lake or reservoir; B.) the lake or reservoir was formed by a public utility structure or dam; C.) the corporation is exempt from federal taxation under 26 USCA § 501c (3); and D.) the corporation actively participates in enhancing the environment and water quality for public recreational use of the lake or reservoir. The exemption applies to property taxes due and payable after December 31, 1999.
COURTS
Small Claims Courts
I.C. 33-5-2-4, I.C. 33-11.6 et seq.
(HEA 1440)
Effective July 1, 1999 & January 1, 2001
The small claims docket of county superior courts for counties with a population of 300,000 to 400,000 (Allen County) can address claims up to $6,000.00. HEA 1440 also provides for the conversion of Marion County small claims courts to township small claims courts with an effective date of January 1, 2001.
LIENS
Environmental Liens
I.C.36-7-29-22.5 (HEA 1544)
Effective: January 1, 1999
The Environmental Response Financing Board can file an environmental lien for a landfill or industrial site that existed on July 1, 1994. The lien addresses cleanup and remedial costs for the site's hazardous substances. Thirty (30) days prior to filing the lien, a written notice must be sent by certified mail to the last known address of the property owner and/or tenant to provide notice of the Board's intended date to file a lien. A copy of the written notice is also provided to the recorder. The recorder enters the lien in the miscellaneous records. A notice of the lien's filing is subsequently sent by certified mail to the property owner or tenant. This environmental lien is effective for twenty (20) years. Currently, remedial or clean-up sites exist in Tippecanoe County and Columbia City (Whitely County).
Mechanic's Liens
I.C. 32-8-3 et seq. (HEA 1367)
Effective: July 1, 1999
Under the prior version of I.C. 32-8-3-3, sworn statements must be recorded within sixty (60) days after performing labor or furnishing materials. HEA 1367 creates different recording requirements for commercial and residential property. Commercial property is ninety (90) days and residential property is sixty (60) days from the last day of performing labor or furnishing materials.
Since Ward v. Yarnelle, 173 Ind. 535, 91 N.E.7 (1910), Indiana cases have discussed and applied an equal priority position to construction mortgages and mechanic's liens. HEA 1367 limits the effect of this parity rule on mortgages by the following lenders: 1.) an individual; 2) a supervised financial organization (See I.C. 24-4.5-1-301); 3) an insurance company; 4) a pension fund; and 5) any other entity that has the authority to make loans. Ind. Code 32-8-3-5 now provides that a construction mortgage by these lenders have priority over liens recorded after the mortgage's recording date where the mortgage and lien relate to the same commercial project. Priority is to the extent of funds actually owed to the lender. Construction mortgages for residential property or public utility projects are still affected by the parity rule.
Ind. Code 32-8-3-16 limits the use of no lien contracts to residential property and utility property. "No lien" provisions are void with commercial property contracts. If provisions require another state's law or court to govern resolution of a contractual dispute, these provisions in the improvement contract are void. I.C. 32-8-3-17
PROBATE
Personal Representative
- Intestate Estate -
I.C.29-1-7-4; I.C. 29-1-7-5 (HEA 1144)
Effective: July 1, 1999
Unless the heirs consent, a court cannot appoint the decedent's spouse as an administrator when 1) an interested party petitions for appointment of administrator where the person died intestate; and 2) an action is pending to dissolve the marriage between the decedent and the decedent's spouse is pending.
Unsupervised Estate
I.C. 29-1-7.5-3.2 (HEA 1144)
Effective: July 1, 1999
The court may also grant an unsupervised estate if: A) the decedent's will provides for unsupervised administration; B) the estate is solvent; and C) the personal representative is qualified to be an administrator without supervision.
The personal representative can certify to the court the availability of an inventory and any amendments. However, the filing of the inventory and related supplements or amendments with the court is not required.
PUBLIC RECORDS
Mortgage Assignments
I.C. 32-8-12-2 (HEA 2027)
Effective: July 1, 1999
A mortgage assignment must include the assignee's business address in order to record the assignment.
Public Access Counselor
I.C. 5-14-4 et seq. (HEA 1002)
Effective: July 1, 1999
The governor appoints a public access counselor for administrating educational programs about a public agency's responsibilities and the public's rights with public access laws. The counselor is also to establish a complaint process to address denial of access to public records or meetings. A complaint should be filed within thirty (30) days after denial of access to a public record or a public agency's meeting.
Public Records - Copying Fees & Uses
I.C. 5-14-3-8, I.C. 36-2-7-10, I.C.36-2-7-10.1 (SEA 321)
Effective: July 1, 1999, January 1, 2000
Public agencies except state agencies may charge actual costs for paper and copying or facsimile equipment when charging for certified, copied, and/or facsimile documents. I.C. 36-2-7-10 provides a schedule of the recording charges and the placement of various fees in a record perpetuation fund. The schedule is to be posted an accessible area in the recorder's office. I.C. 36-2-7-10 becomes effective January 1, 2000 and provides charges for "bulk users" who obtain bulk form of recorded documents for a particular day, week, month, or year and the indices for retrieving the recorded documents. Bulk form fees are also placed in the record perpetuation fund.
REAL ESTATE INDUSTRY
Attorneys
I.C. 27-1-15.5-7.1 (SEA 559)
Effective: July 1, 1999
An Indiana licensed attorney in good standing can apply insurance related continuing legal education courses toward required continuing education requirements for an insurance license.
Loan Brokers
I.C. 23-2-5 et seq. (HEA 2027)
Effective: July 1, 1999
Loan brokers and any of their employees involved in loan origination must be licensed. Licensees will have requirements for continuing education in order to renew or receive a license: 12 hours for renewal and 24 hours for initial licensure. Exemption for certain professionals are detailed in I.C. 23-2-5-19.
Real Estate Broker
-Agency Relationship
I.C. 24.-4.6-2.1-1 et seq. (SEA 358)
Effective: July 1, 1999
A real estate broker is referred in the amended statutes as a licensee. A limited agent is a licensee with a real estate license who represents both the seller and buyer or the lessor and lessee with a written and informed consent by all parties. The limited agent may disclose property information to the buyer and seller. An individual licensee represents only the client despite the licensee's affiliation with a principal broker. I.C. 25-34.1-10-12.5. Unless stated otherwise in a contract, the licensee has an agency relationship with the client. Subagency through a multiple listing service or other agreement is no longer available. I.C. 25-34.1-10-17.
STATE PROPERTY
Indiana Dept. of Administration
I.C. 4-13-1-4 et seq.; I.C. 4-20.5 et seq.
(SEA 542)
Effective July 1, 1999
The Indiana Department of Administration (IDA) can lease the state's real property for a term of four to ten years. IDA can grant an easement in state real property without monetary consideration and without the governor's approval. I.C. 4-20.5-7-15.
Special Conveyances
I.C.4-13-1-2, I.C. 4-20.5-7-1,
I.C. 14-30-1-4
Various enrolled acts outline the following conveyances of real property to certain cities and organizations: HEA 1191- City of Evansville; HEA 1322- American Red Cross for property in Vanderburgh County; HEA 1385- Jefferson County Historical Society; and SEA 466- Kankakee River Basin Commission and Alvin W. Landfadt for property in Porter County.
TAXES AND ASSESSMENTS
Property Taxes
I.C.6-1.1-37-10;I.C.26-1-6.1-102; I.C.36-2-6-14.5 (SEA 447)
Effective July 1, 1999
The additional 10% penalty for unpaid property taxes is added the day immediately following the May and November due date of each year following the year of the initial delinquency. Previously, May 10th and November 10th were designated as the dates to add this penalty.
Special Assessments - Certification
I.C. 36-2-6-14.5 (SEA 447)
Effective: July 1, 1999
Unless provided by another law, the county establishes uniform dates to require a uniform time to certify a special assessment to the county auditor. If the county fails to establish a certification date, the special assessment must be certified to the auditor on or before March 1st in order to add the assessment to the tax duplicate.
TRUSTS
Uniform Prudent Investors Act
I.C. 30-4-3-5 et seq. (SEA 9)
Effective 7/1/99
This Act provides various duties of a trustee with an administration of a trust including the prudent investor rule. The trustee can delegate investment and management responsibilities to an agent. I.C. 30-4-3.5-9.