Citations Affected: IC 13-26-12; IC 36-9.
Synopsis: Sewer liens on rental property. Requires a municipality that
operates a sewage works to require a security deposit. Provides that a
lien for unpaid sewage fees does not attach against real property if
someone other than the owner occupies the property, and that a lien
that attached before July 1, 2004, to property occupied by someone
other than the owner is void. Repeals a provision allowing a sewer lien
to attach against real property occupied by someone other than the
Effective: July 1, 2004.
January 13, 2004, read first time and referred to Committee on Local Government.
A BILL FOR AN ACT to amend the Indiana Code concerning local
municipality that operates sewage works under this chapter
by ordinance, require the owners, lessees, or users of property served
by the works to pay a deposit to ensure payment of sewer fees.
(b) The deposit required may not exceed the estimated average payment due from the property served by the sewage works for a three (3) month period. The deposit must be retained in a separate fund.
(c) The deposit, less any outstanding penalties and service fees, shall be refunded to the depositor after a notarized statement from the depositor that as of a certain date the property being served:
(1) has been conveyed or transferred to another person; or
(2) no longer uses or is connected with any part of the municipal sewage system.
A statement under subdivision (1) must include the name and address of the person to whom the property is conveyed or transferred.
(d) If a depositor fails to satisfy costs and fees within sixty (60) days after the termination of
his the depositor's use or ownership of the
property served, he the depositor forfeits his the depositor's deposit
and all accrued interest. The forfeited amount shall be applied to the
depositor's outstanding fees. Any excess that remains due after
application of the forfeiture may be collected in the manner prescribed
by section 31 or 32 of this chapter.
(e) A deposit may be used to satisfy all or part of any judgment awarded the municipality under section 31 of this chapter.
(f) A deposit made under this section that has remained unclaimed by the depositor for more than seven (7) years after the termination of the services for which the deposit was made becomes the property of the municipality. IC 32-34-1 (unclaimed property) does not apply to a deposit described in this subsection.
for delinquencies, is due not less than fifteen (15) days after the date of
the notice. If payment is not received within one hundred eighty (180)
days after the date of the notice, the amount due may be expensed as a
bad debt loss.
(c) A lien attaches against real property occupied by someone other
than the owner only if the utility notified the owner within twenty (20)
days after the time the utility fees became sixty (60) days delinquent.
However, the utility is required to give notice to the owner only if the
owner has given the general office of the utility written notice of the
address to which his notice is to be sent.
(c) After June 30, 2004, a lien does not attach against real property for fees assessed against the property under this chapter if a person other than the owner of the property occupies the property.
(d) The municipality shall release:
(1) liens filed with the county recorder after the recorded date of conveyance of the property; and
(2) delinquent fees incurred by the seller;
upon receipt of a verified demand in writing from the purchaser. The demand must state that the delinquent fees were not incurred by the purchaser as a user, lessee, or previous owner, and that the purchaser has not been paid by the seller for the delinquent fees.
served or to be served by the works, including interested parties, have
had an opportunity to be heard concerning the proposed fees. After
introduction of the resolution fixing fees, and before they are finally
adopted, notice of the hearing setting forth the proposed schedule of
fees shall be given by publication in accordance with IC 5-3-1. After
the hearing the resolution establishing fees, either as originally
introduced or as amended, shall be passed and put into effect.
However, fees related to property that is subject to full taxation do not
take effect until they have been approved by ordinance of the municipal
(d) A copy of the schedule of the fees shall be kept on file in the office of the board and must be open to inspection by all interested parties. The fees established for any class of users or property served shall be extended to cover any additional premises thereafter served that fall within the same class, without the necessity of hearing or notice.
(e) A change of fees may be made in the same manner as fees were originally established. However, if a change is made substantially pro rata for all classes of service, hearing or notice is not required, but approval of the change by ordinance of the municipal legislative body is required.
(f) If a fee established is not paid within thirty (30) days after it is due, the amount, together with a penalty of ten percent (10%) and a reasonable attorney's fee, may be recovered by the board from the delinquent user or owner of the property served in a civil action in the name of the municipality.
(g) Fees assessed against real property under this section also constitute a lien against the property assessed. Except as provided in subsection (k), the lien attaches at the time of the filing of the notice of lien in the county recorder's office. The lien is superior to all other liens except tax liens, and shall be enforced and foreclosed in the same manner as is provided for liens under IC 36-9-23-33 and IC 36-9-23-34.
This subsection applies to fees due after July 1, 1988. Except as
provided in subsection (k), a fee assessed against real property under
this section constitutes a lien against the property assessed only when
the fee is delinquent for no more than three (3) years from the day after
the fee is due.
(i) In addition to the penalties under subsections (f) and (g) and section 11.5 of this chapter, a delinquent user may not discharge water into the public sewers and may have the property disconnected from the public sewers.