Relating to property tax sales, including bidding procedures and foreclosures on certificates, and including applicability provisions

The bill requires the successful bidder to pay the total amount due, plus the successful bidder fee. Under the bill, bidders shall offer the monthly interest percentage the bidder is willing to accept on redemption from tax sale.1. The bidder offering to accept the lowest interest rate shall be the winner at the auction. Under current law, the treasurer establishes and collects a registration fee from each bidder at the tax sale. The bill eliminates the registration fee. Instead, the treasurer establishes and collects a fee only from the successful bidder. The bill gives the successful bidder hours after receiving notice that they have won the auction to pay the total amount due. If the successful bidder defaults, the person who would have won had the defaulting purchaser not bid shall be notified that they are the successful bidder and pay the total amount due within hours. The bill repeals Code chapter 448 and establishes a new procedure for a purchaser of a tax sale certificate to obtain the title to the property when the previous property owner does not redeem the property in accordance with Code chapter 447. The bill requires the county treasurer to announce the date of a sheriff’s sale to be held for properties for which tax certificates have been issued following a tax sale. The sheriff’s sale is scheduled in consultation with the sheriff and shall be scheduled on a date as close as practicable to the third Monday in January. The holder of the tax sale certificate shall personally serve all persons with an interest in the property no later than days before the scheduled sheriff’s sale. The bill prescribes the form for the notice. The bill allows alternative service to a person whose interest in the property is as a judgment creditor only and prescribes requirements for service for other specified interested parties. For properties primarily used or intended for human habitation containing two or fewer dwelling units, an individual who is either an owner, contract seller, or contract purchaser may demand that the sheriff’s sale be postponed for six months after the scheduled sheriff’s sale date. A written demand for delay of sale must be received by the county treasurer’s office no later than days before the scheduled sheriff’s sale date. On the scheduled date, the treasurer shall announce the properties with delay demands and the new sale date scheduled for the delayed sales. The delayed sales shall be scheduled as close as practicable to the first Monday occurring six months after the originally scheduled January sale date. The bill also requires the certificate holder to post the notice of sale in a weather-resistant form on the main entrance of a property no later than days before the scheduled sheriff’s sale if the property being sold is primarily used or intended for human habitation containing two or fewer dwelling units. The bill specifies that the sheriff’s sale shall be conducted at the treasurer’s office by the sheriff with the assistance of the treasurer. To the extent feasible, the procedures shall be the same as that of a special execution under Code chapter 626, with certain modifications, as specified in the bill. The bill requires the reasonable fees of the attorney representing the tax certificate holder for services from the completion of the tax sale until the sheriff’s sale to be added to the sale bid of the tax certificate holder. A copy of the itemized billing of the attorney shall be given to the treasurer and shall be accessible to the public. If the property is redeemed or purchased at the sheriff’s sale by a third party, the attorney shall deposit the fees in the attorney’s trust account. If no party in interest commences a legal action, or files a pleading in an action demanding a determination of the proper amount of attorney fees and costs owing to the attorney for the certificate holder within days after the sheriff’s sale, the attorney may apply the fees to the tax sale certificate holder’s account. The bill allows for a person holding title of a tax deed issued under Code chapter 448, Code 2026, before July 1, 2026, to request that the tax deed be canceled, a new tax sale certificate be issued, and that the treasurer resell the property at the next annual sheriff’s sale. The request must be made before July of the year following the calendar year in which the tax deed was issued. Sheriff’s sales under this procedure shall not be subject to a demand for delay of sale. The priority of the new certificate shall, for purposes of conflicting claims on the property, relate back to the date of the original tax sale. The bill provides that an overplus at the sheriff’s sale is exempt from execution by a creditor to the same extent that the property was exempt immediately prior to the sheriff’s sale. A person with a previous existing interest in the property, other than an owner, contract vendor, or contract vendee of the property, shall have days after the sale to file a verified claim with the treasurer. The claims may include facts to establish that the overplus is not exempt from execution. A claim not timely filed is barred against the overplus. At any time after the claim filing deadline, the owners, contract vendors, and contract vendees, and persons with timely filed claims may file with the treasurer a written agreement for distribution of the overplus, according to which the treasurer shall distribute the overplus. Within days after the sale, specified persons may file an action in equity in the district court requesting a determination of the claims against the overplus. The action may also determine the proper amount of attorney fees and charges of the certificate holder. If no such action is timely filed, the treasurer shall distribute the overplus, free of all other claims, to the taxpayers of record in the treasurer’s office at the time of the sheriff’s sale, as provided in the bill. The bill also allows for a continuance of sale if the holder of the tax certificate has not timely obtained service on all parties required to be served with the notices. Unless the certificate holder can establish to the treasurer by clear and convincing evidence that the delay is not the fault of the certificate holder, interest, attorney fees, and charges incurred by the tax sale certificate holder shall not accrue after the originally scheduled sale date.1, subsection 6, relating to a treasurer’s deed issued after a sheriff’s sale under Code chapter 447A. The court may grant a continuance of up to days if the taxpayer presents substantial evidence that the taxpayer will be able to redeem the property by payment in full of the delinquent taxes and lawful charges, including reasonable attorney fees and costs for the forcible entry and detainer action, within the continuance period, unless the taxpayer has previously requested such a continuance or has requested a delay of sale. The court may condition such continuance on the taxpayer taking steps, such as authorizing a payroll or bank deduction plan, to ensure that all subsequent taxes are timely paid. If all delinquent taxes, interest, and lawful charges are paid to the treasurer prior to the rescheduled hearing, the property shall be treated as if the tax sale certificate had been timely redeemed. The bill mandates a study of tax sales done by a designee of the governor, in consultation with six county treasurers appointed by the Iowa state county treasurer’s association, including but not limited to the feasibility of a statewide online system or a coordinated online system of county systems. Recommendations shall be presented to the general assembly before January 1, 2027. The bill establishes applicability provisions based on the date of the tax sale affecting the property. The bill makes conforming changes to other provisions of the Code.