Bill: In Voting Plot Liens Act

[multiman155]

PLOT LIENS ACT

Sponsor: Multi Man, MP
Type: Act of Parliament

A
BILL
TO
AMEND THE INTEGRATED PROPERTY REGULATION ACT, BANKING FOUNDATIONS ACT, AND SEIZURE ACT; ESTABLISH REGISTERED PLOT LIENS AND COURT-ORDERED SALES TO ENFORCE THEM; AND REMOVE THE BANKING FOUNDATIONS ACT'S RULE THAT IT OVERRIDES OTHER LAWS​

Preamble: This Act sets rules for registering, enforcing, and ending plot liens. A clear lien law gives creditors a reliable way to seek payment through a court-ordered sale of the plot. Lenders can then manage their risk and lend more, which should put money into circulation and increase economic activity. Owners and debtors also need protection from unfair or arbitrary enforcement. The Act also removes the Banking Foundations Act's rule that it overrides other laws, because laws should be able to develop over time and that rule no longer fits Azalea's modern laws.

1. Short Title and Enactment

(a) This Act may be cited as the "Plot Liens Act".

(b) This Act takes effect immediately upon royal assent, except for Section 8(a)(i).

(c) Section 8(a)(i) takes effect upon royal assent to this Act if Section 6(b) of the Bankruptcy and Debt Relief Act takes effect before that royal assent. Otherwise, section 8(a)(i) takes effect one second after Section 6(b) of the Bankruptcy and Debt Relief Act takes effect.

2. Liens and registration

(a) A plot lien gives a creditor the right to seek a court-ordered sale of the plot under Section 4. The creditor may claim payment from the money received from the sale to satisfy the obligation secured by the lien.

(b) The secured obligation is the debt or other obligation to pay money covered by the lien.

(c) The debtor is the person who owes the secured obligation.

(d) A plot owner may grant a lien to a bank or private creditor through a written agreement. The agreement must identify the owner, debtor, creditor, plot, and obligation that the lien secures. It must also state the maximum amount that the creditor may recover from the plot under the lien.

(e) The Ministry of Economic Affairs (the MEA) must verify the following before it registers a lien:

(i) who the owner and creditor are;​

(ii) that the named owner owns the plot;​

(iii) that anyone acting for the owner or creditor has that party's permission to agree to the lien on its behalf; and​

(iv) that both parties agreed to the written terms.​

(f) The owner and creditor may confirm the written terms through a ticket with the MEA.

(g) The MEA registers a lien by publishing the verified agreement in a public lien registry. The entry must identify the plot, owner, debtor, and creditor. It must also state the lien's maximum amount, the date and time of registration, and its place in the registration order.

(h) A creditor may enforce a plot lien only after the MEA registers it.

(i) The MEA may set procedures for applying to register liens and maintaining the registry.

(j) The MEA must register any increase in a lien's registered maximum as a separate lien. The new lien covers the additional amount.

(k) If an obligation is not covered by the existing registered agreement, the MEA must register any security granted for that obligation as a separate lien.

(l) If a plot is in the bankruptcy property pool, the MEA must have the bankruptcy court's permission to register a new lien or an increase under paragraph (j). This requirement lasts while the bankruptcy petition or proceeding is pending.

(m) This paragraph applies to a right agreed before a payment default that allows a creditor to take ownership of a plot, or require its transfer or sale, because of that default. The creditor may exercise that right only through foreclosure under Section 4, after the MEA registers the lien.

3. Payment order and changes of ownership

(a) Registered liens on the same plot have priority in the order in which the MEA registered them.

(b) A registered lien continues to apply to the plot when ownership changes.

(c) A registered lien may still be enforced against the plot after bankruptcy releases the debtor from personal responsibility for the debt.

(d) For a plot in a bankruptcy property pool, money left over under Section 4(f) joins the other assets distributed in the bankruptcy. For a plot owned by a bank or company in liquidation, that money joins the assets distributed in the liquidation.

(e) If the secured obligation is lawfully transferred to another creditor, the lien passes to that creditor with it. The lien keeps its existing place in the registration order.

(i) The MEA must verify the new creditor's identity. It must also verify that the secured obligation has passed to that creditor. The MEA must then record the transfer and notify the debtor and plot owner.​

(ii) The new creditor may enforce the lien only after the MEA records the transfer.​

4. Foreclosure and other forced sales

(a) Foreclosure is a court-ordered sale to enforce a lien.

(i) The creditor must notify the debtor, current plot owner, and all registered lienholders of the proposed foreclosure. The notice must also describe the debtor's failure or clear refusal to make a required payment.​

(ii) The creditor must allow a reasonable time to correct the failure or refusal. The creditor may file a foreclosure claim while that time is still running. When deciding whether the time allowed was reasonable, the court must consider the obligation's total term and how long payment has been overdue. The court must also consider whether there have been multiple independent defaults. It must consider whether the debtor has willfully refused to pay or has repeatedly made false promises to pay.​

(iii) For a secured obligation payable in installments, the debtor or plot owner may stop the sale by paying the overdue installments, lawful accrued interest, and valid charges. This right remains available until the plot is sold. The payment restores the installment schedule in effect before the default. This applies even if the agreement made future installments due early because of the default.​

(b) The court may authorize a foreclosure sale only for a material breach of a secured payment obligation. The court must decide whether the creditor allowed a reasonable time to correct the failure or refusal. It must not authorize the sale before that time expires. It must not authorize the sale if the failure or refusal has been corrected.

(i) The MEA must stop the sale if the failure or refusal is corrected before the plot is sold.​

(c) The MEA must conduct a public sale and notify the persons listed in paragraph (a) of the sale.

(i) The MEA sets the auction schedule, bidding procedures, and other routine arrangements under the court's sale order.​

(ii) The court must set the reserve price, meaning the lowest price at which the plot may be sold.​

(iii) The court may impose other conditions on the sale.​

(d) The court may authorize a foreclosure sale only if each holder of a lien registered before the foreclosing creditor's lien meets one of these conditions:

(i) the holder consents to ending the lien; or​

(ii) the holder will receive its full secured payoff after sale expenses are paid.​

(e) For a sale under this Section, a lien's secured payoff is calculated as follows:

(i) It includes the unpaid principal and lawful interest that has accumulated through the payment date. Principal is the debt before interest and charges. The payoff also includes agreed charges for processing repayment, but those charges must be limited to reasonable processing costs.​

(ii) The total secured payoff must not exceed the maximum amount registered for the lien.​

(iii) The payoff must not include interest for any period after the payment date. It must not include compensation for profit lost because of early repayment.​

(iv) Payment may come from the money received from the sale.​

(f) Money from the sale must first pay necessary sale expenses approved by the court.

(i) The remaining money must go to registered lienholders in the order in which the MEA registered their liens. The total paid under each lien must not exceed its secured payoff.​

(ii) In a sale under paragraph (h) outside bankruptcy or liquidation, the remaining money must go toward the debt that the court authorized for collection. The payment must not exceed the amount still owed on that debt.​

(iii) The plot's current owner receives any money left over, unless Section 3(d) requires the money to join a bankruptcy or liquidation distribution.​

(g) The MEA must not complete a sale that does not meet the payment or consent requirements in paragraph (d) or (i). A completed sale ends the registered liens on the plot.

(i) The MEA must record that the liens have ended.​

(h) For a plot sale in bankruptcy or in a court proceeding to collect a debt, a court order is required. The sale must follow paragraphs (c), (e), and (f). This paragraph does not apply to a foreclosure sale.

(i) These requirements also apply when a bank or company in compulsory liquidation sells a plot that it owns, if a registered lien applies to that plot.​

(ii) If a creditor's registered lien on the plot secures the obligation being collected, a debt-execution sale must meet paragraphs (a) and (b). The creditor's claim requesting that sale must be filed within the deadline in Section 5(a).​

(i) The court may authorize a sale under paragraph (h) only if every registered lienholder consents to ending its lien or will receive its full secured payoff. A sale in bankruptcy or compulsory liquidation may take place before the debtor has failed or refused to make a required payment.

5. Time to file

(a) A creditor must file a foreclosure claim in a civil suit within the civil filing period under the Judiciary Act. The period begins when a material breach of the secured payment obligation occurs.

(b) A payment breach is material when it substantially defeats the bargain.

(i) A clear refusal to make a secured payment before it is due counts as a material breach if it is communicated to the other party and withholding the payment would substantially defeat the bargain.​

(ii) When deciding whether a later payment default is material, the court must not count an earlier default for which foreclosure is barred by the filing deadline in paragraph (a).​

(c) A creditor may bring or continue a foreclosure case during bankruptcy.

(d) A creditor may use a claim filed with the bankruptcy court to meet the deadline in paragraph (a). To meet that deadline, the claim must be filed within that period, identify the registered lien, and specifically ask the court to order a foreclosure sale.

(e) If a bankruptcy stay covers collection or a forced sale, the creditor must obtain the bankruptcy court's permission before proceeding. A bankruptcy stay is a temporary suspension of that action during bankruptcy.

6. Ending liens and correcting the registry

(a) A lien ends when every obligation it secures has been fulfilled.

(i) Within seven days after the secured obligation has been fulfilled, the creditor must confirm this to the MEA.​

(ii) The MEA must then record that the lien has ended.​

(b) The debtor or plot owner may apply to the MEA, without the creditor's confirmation, to record that a paid lien has ended.

(i) The MEA must review the evidence of payment and notify the creditor of the application. It must give the creditor a reasonable opportunity to object.​

(ii) The MEA must record that the lien has ended if it verifies from the evidence that the secured obligation has been paid in full and the creditor has not disputed payment.​

(iii) The debtor or plot owner may also ask a court to order the MEA to record that a paid lien has ended.​

(c) At the plot owner's request, a court must end a lien if:

(i) the deadline to file a foreclosure claim has passed for every obligation the lien still secures;​

(ii) no claim filed on time seeking foreclosure or a sale under Section 4(h)(ii) remains before a court; and​

(iii) no order or judgment authorizing a sale in such a claim remains enforceable.​

(d) The court must preserve the lien to the extent that it secures obligations not yet due.

(e) The MEA must update the registry when a creditor gives written notice ending a lien, or when a court ends a lien or orders a correction.

(f) The MEA may correct an obvious recording error. It may do so only if the agreement it verified or the original registration record shows the correct information.

(i) A correction must not change the lien's terms or original registration order.​

(ii) The MEA must keep the original entry and publish the correction.​

7. Existing claims

(a) The filing deadline in Section 5 applies to breaches after enactment.

(b) If the right to bring a claim arose before enactment, the remedies and filing deadline that previously applied continue to apply to that claim.

8. Amendments

(a) Amend the Integrated Property Regulation Act as follows:

(i) Amend Section 6(b)(i), as replaced by Section 6(b) of the Bankruptcy and Debt Relief Act, as follows:​

(i) Any government-run plot auctions or sales will use this price-per-block value as the base selling price. Sales under section 4 of the Plot Liens Act and court-authorized bankruptcy sales are exempt from this requirement. The court sets the reserve price for each exempt sale.

(ii) Add Section 14(e) as follows:​

(e) A plot lien registered under the Plot Liens Act continues to apply to the plot during eviction and escrow under this section and after the government acquires the plot. Before the plot becomes government property under paragraph (d), MUD must notify each registered lienholder.

(b) Amend the Banking Foundations Act by adding section 10(g) as follows:

(g) In a liquidation under paragraph (b)(iii) or (c)(iii), the sale of a plot owned by the institution and subject to a lien registered under the Plot Liens Act must follow section 4 of that Act.

(c) Amend Section 4(b)(iii) of the Seizure Act as follows:

(iii) Marked For Dissolution. The company is not salvageable or the Ministry believes it needs to be dissolved. The appointed manager will work to end any obligations, sell off any assets, and then pay out the necessary individuals. Creditors shall be paid first, then customers, then shareholders. For a bank, for example, any loans the bank has taken out from other entities shall be paid back first, then customers shall receive their deposits back, and then anything left over goes to the shareholders receiving the base value of their investment back. The sale of a plot owned by the company and subject to a lien registered under the Plot Liens Act must follow section 4 of that Act.

(d) Amend section 11 of the Banking Foundations Act as follows:

11. Ordinary Law.

(a) The Banking Foundations Act does not automatically override other laws.
11. Supersession

(a) In any legal conflict the Banking Foundations Act shall supersede any other current, previous or post-creation bills or acts.