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Sponsor: Multi Man, MP
Type: Act of Parliament
Preamble: This Act sets rules for registering, enforcing, and ending liens and removes the Banking Foundations Act's rule that it overrides other laws. Defining property liens in law will help to better establish a creditors a right to seek payment through a court-ordered sale of the plot. This will provide a more stable basis for the financial industry to loan money while managing risk, which should cause money to circulate and improve economic activity. At the same time, we must protect those who are the subject of liens on their property against unfair and arbitrary enforcement. As to the Banking Foundation Act's supremacy clause, we find a need for bills to be allowed to develop over time and do not see justification for retaining that supremacy clause in the context of 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.
2. Liens and registration
(a) A plot lien gives a creditor the right to, for proper cause, seek a court-ordered sale of a plot and claim payment from the sale in order to satisfy a secured obligation.
(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 bank or private creditor a lien by a written agreement identifying the owner, debtor, creditor, plot, secured obligation, and maximum amount payable from the plot under the lien.
(e) Before registering a lien, the Ministry of Economic Affairs, or MEA, must verify:
(f) The parties may confirm the written terms through an MEA ticket.
(g) MEA registers the lien by publishing the agreement it has verified in a public lien registry. The entry must show the plot, owner, debtor, creditor, maximum amount payable under the lien, registration date and time, and place in the registration order.
(h) A creditor may enforce a plot lien only after MEA registers it.
(i) MEA may set procedures for applying to register liens and maintaining the registry.
(j) MEA must register an increase in a lien's registered maximum as a separate lien for the additional amount.
(k) MEA must register security for an obligation outside the registered agreement as a separate lien.
3. Payment order and changes of ownership
(a) Registered liens on the same plot have priority in the order in which 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) If a plot is in a bankruptcy property pool or is owned by a bank or company in liquidation, any money left over under section 4(f) joins the other assets distributed in that proceeding.
(e) A lawful transfer of the secured obligation transfers the lien with its existing registration priority.
4. Foreclosure and other forced sales
(a) Foreclosure is a court-ordered sale to enforce a lien.
(b) The court may authorize a foreclosure sale only for a material breach of a secured payment obligation. The court must decide whether the time allowed was reasonable and must not authorize a sale before that time expires or after the failure or refusal has been corrected.
(c) MEA must conduct a public sale and notify the persons listed in paragraph (a) of the sale.
(d) The court may authorize a foreclosure sale only if each holder of a lien registered before the foreclosing creditor's lien consents to ending that lien or will receive its full secured payoff after sale expenses.
(e) For a sale under this section, a lien's secured payoff is calculated as follows:
(f) Money from the sale must first pay necessary sale expenses approved by the court.
(g) MEA must not complete a sale that fails the lienholder payment or consent requirements in paragraph (d) or (i). A completed sale ends the registered liens on the plot.
(h) A plot sale in bankruptcy or a court proceeding to collect a debt, other than a foreclosure sale, requires a court order and must follow paragraphs (c), (e), and (f).
(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. Bankruptcy or compulsory liquidation sales 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 statute of limitations specified under the Judiciary Act, with the clock beginning at the time of the material breach of a payment obligation secured by the lien required to seek foreclosure.
(b) A payment breach is material when it substantially defeats the bargain.
(c) A creditor may bring or continue a foreclosure case during bankruptcy.
(d) A creditor meets the deadline in paragraph (a) by filing a claim with the bankruptcy court within that period if the claim identifies the registered lien and specifically asks the court to order a foreclosure sale.
(e) A creditor must obtain the permission of the court overseeing a bankruptcy for collection or a forced sale covered by a bankruptcy stay, meaning 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.
(b) The debtor or plot owner may apply to MEA to record that a paid lien has ended without the creditor's confirmation.
(c) At the plot owner's request, a court must end a lien if:
(d) The court must preserve the lien to the extent that it secures obligations not yet due.
(e) MEA must update the registry when a creditor gives written notice ending a lien or a court orders a correction or ends a lien.
(f) MEA may correct an obvious recording error if the agreement verified by MEA or the original registration record shows the correct information.
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:
(b) Add section 10(g) to the Banking Foundations Act by amending it as follows:
(c) Amend section 4(b)(iii) of the Seizure Act by amending it as follows:
(d) Section 11 of the Banking Foundations Act is amended as follows:
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
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 liens and removes the Banking Foundations Act's rule that it overrides other laws. Defining property liens in law will help to better establish a creditors a right to seek payment through a court-ordered sale of the plot. This will provide a more stable basis for the financial industry to loan money while managing risk, which should cause money to circulate and improve economic activity. At the same time, we must protect those who are the subject of liens on their property against unfair and arbitrary enforcement. As to the Banking Foundation Act's supremacy clause, we find a need for bills to be allowed to develop over time and do not see justification for retaining that supremacy clause in the context of 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.
2. Liens and registration
(a) A plot lien gives a creditor the right to, for proper cause, seek a court-ordered sale of a plot and claim payment from the sale in order to satisfy a secured obligation.
(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 bank or private creditor a lien by a written agreement identifying the owner, debtor, creditor, plot, secured obligation, and maximum amount payable from the plot under the lien.
(e) Before registering a lien, the Ministry of Economic Affairs, or MEA, must verify:
(i) who the owner and creditor are;
(ii) that the named owner actually 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 parties may confirm the written terms through an MEA ticket.
(g) MEA registers the lien by publishing the agreement it has verified in a public lien registry. The entry must show the plot, owner, debtor, creditor, maximum amount payable under the lien, registration date and time, and place in the registration order.
(h) A creditor may enforce a plot lien only after MEA registers it.
(i) MEA may set procedures for applying to register liens and maintaining the registry.
(j) MEA must register an increase in a lien's registered maximum as a separate lien for the additional amount.
(k) MEA must register security for an obligation outside the registered agreement as a separate lien.
3. Payment order and changes of ownership
(a) Registered liens on the same plot have priority in the order in which 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) If a plot is in a bankruptcy property pool or is owned by a bank or company in liquidation, any money left over under section 4(f) joins the other assets distributed in that proceeding.
(e) A lawful transfer of the secured obligation transfers the lien with its existing registration priority.
(i) MEA must verify the new creditor's identity and that the secured obligation has passed to them, record the transfer, and notify the debtor and plot owner.
(ii) The new creditor may enforce the lien only after 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 and the debtor's default on the secured obligation; that is: failure or clear refusal to make a required payment.
(ii) The creditor must allow a reasonable time to correct the failure or refusal and may file a foreclosure claim before that time expires. A Court shall examine the duration in time of the secured obligation, the existence of multiple independent defaults, and the presence of willful refusal or repeated false promises to make payments on a secured obligation in assessing whether time given is reasonable.
(iii) For missed installments of installment loans, the debtor or plot owner may stop foreclosure at any time before the plot is sold by paying the overdue installments, lawful accrued interest, and valid charges. Payment shall restore the original installment schedule, even if the agreement made future installments due immediately or on an accelerated basis 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 time allowed was reasonable and must not authorize a sale before that time expires or after the failure or refusal has been corrected.
(i) MEA must stop the sale if the failure or refusal is corrected before the plot is sold.
(c) MEA must conduct a public sale and notify the persons listed in paragraph (a) of the sale.
(i) MEA sets routine auction arrangements, including the schedule and bidding procedures, 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 consents to ending that lien or will receive its full secured payoff after sale expenses.
(e) For a sale under this section, a lien's secured payoff is calculated as follows:
(i) It includes unpaid principal (the debt before interest and charges), lawful interest accumulated through the payment date, and agreed charges for paying off the obligation.
(ii) The total must not exceed the maximum amount registered for the lien.
(iii) It must not include interest for any period after the payment date.
(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) Any remaining money must pay registered liens in the order in which MEA registered them, up to each lien's secured payoff.
(ii) In a sale under paragraph (h) to collect a debt outside bankruptcy or liquidation, the remaining money must pay any amount still owed on the debt authorized for collection.
(iii) The plot's current owner receives any money left over, except for money distributed under section 3(d).
(g) MEA must not complete a sale that fails the lienholder payment or consent requirements in paragraph (d) or (i). A completed sale ends the registered liens on the plot.
(i) MEA must record that the liens have ended.
(h) A plot sale in bankruptcy or a court proceeding to collect a debt, other than a foreclosure sale, requires a court order and must follow paragraphs (c), (e), and (f).
(i) The same requirements apply to the sale of a plot owned by a bank or company in compulsory liquidation if a registered lien applies to that plot.
(ii) A creditor seeking a debt-execution sale to collect an obligation secured by its registered lien on the plot must meet paragraphs (a) and (b). The claim requesting the 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. Bankruptcy or compulsory liquidation sales 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 statute of limitations specified under the Judiciary Act, with the clock beginning at the time of the material breach of a payment obligation secured by the lien required to seek foreclosure.
(b) A payment breach is material when it substantially defeats the bargain.
(i) A clear refusal to make a future secured payment that is communicated to the other party before it is due shall count as a material breach when withholding that payment would substantially defeats the bargain.
(c) A creditor may bring or continue a foreclosure case during bankruptcy.
(d) A creditor meets the deadline in paragraph (a) by filing a claim with the bankruptcy court within that period if the claim identifies the registered lien and specifically asks the court to order a foreclosure sale.
(e) A creditor must obtain the permission of the court overseeing a bankruptcy for collection or a forced sale covered by a bankruptcy stay, meaning 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 MEA.
(ii) MEA must then record that the lien has ended.
(b) The debtor or plot owner may apply to MEA to record that a paid lien has ended without the creditor's confirmation.
(i) MEA must review the evidence of payment, notify the creditor, and give the creditor a reasonable opportunity to object.
(ii) 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 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) MEA must update the registry when a creditor gives written notice ending a lien or a court orders a correction or ends a lien.
(f) MEA may correct an obvious recording error if the agreement verified by MEA or the original registration record shows the correct information.
(i) A correction must not change the lien's terms or original registration order.
(ii) 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) Replace section 6(b)(i) as follows:
(ii) Add section 14(e) as follows:
(b) Add section 10(g) to the Banking Foundations Act by amending it as follows:
(c) Amend section 4(b)(iii) of the Seizure Act by amending it as follows:
(d) Section 11 of the Banking Foundations Act is amended as follows: