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HSB 205

A bill for an act relating to cities or counties canceling the sale of property containing abandoned buildings to a tax sale certificate holder.

2025-2026 Regular Session

Allows counties or cities to cancel a tax sale for abandoned-building parcels and refund the certificate holder's purchase money plus 2% monthly interest before redemption.

Subcommittee recommends passage.
#buildings #citygovernment #countygovernment #taxsales #vacantproperty
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Bill Summary · HSB 205

Summary: HSB 205 — Cancellation of Tax Sale for Abandoned-Building Properties

Purpose and intent

HSB 205 provides a mechanism for local governments (cities or counties) to cancel a tax sale and refund the purchase money to the tax sale certificate holder when a parcel sold at tax sale contains an abandoned building, as defined in Iowa Code section 657A.1. The goal is to allow local governments to reclaim parcels with abandoned structures and handle the financial restitution to certificate holders before redemption or issuance of a tax deed.

Key provisions

  • Amends Section 448.13 (Cancellation of tax sale and certificate of purchase; refund of purchase money):

    • If the county treasurer receives a verified statement from a city or county stating that a tax sale parcel contains an abandoned building (per 657A.1), before redemption under Chapter 447 or issuance of a tax deed, and the statement is accompanied by a petition by the city or county under 657A.10B for title to the parcel, the treasurer shall:
    • Cancel the sale in the county system.
    • Refund the purchase money to the tax sale certificate holder (including interest and associated amounts as provided in 657.10B).

  • Amends Section 657A.10B, subsection 7:

    • If a city or county files a petition naming the tax sale certificate holder as a respondent, the city or county must also file a petition with a verified statement declaring the property contains an abandoned building with the county treasurer.
    • Upon receipt, the treasurer shall:
    • Cancel the sale in the county system.
    • Refund the purchase money to the certificate holder, including interest at 2% per month (counting any fraction of a month as a full month), on the sum of the purchase money plus any amounts added under 447.1, from the date of purchase to the date of refund.
    • All amounts due, including interest, are refunded.

  • Definition reference:

    • Abandoned building definition used is the one in 657A.1.

Affected parties

  • Tax sale certificate holders (investors who purchased parcels at tax sale): Eligible for cancellation of the sale and a refund of purchase money plus interest if the conditions are met.
  • Cities and counties: Must file the petition for title and provide the verified statement of abandonment; act as the requesting local government entities.
  • County treasurers: Administer the cancellation in the county system and process the refund (including interest).

Procedural and timeline aspects

  • Status: Subcommittee recommends passage.
  • Introduced: February 18, 2025 (referred to Local Government).
  • Subcommittee: Siegrist, Blom, and Gosa.
  • Subcommittee meeting: Scheduled for February 27, 2025; outcome: recommendation to pass.
  • Final substantive action to watch: If enacted, the process triggers before redemption (Chapter 447) or tax deed issuance.

Practical impact and considerations

  • Financial impact on holders: Refunds include principal, any added amounts under existing tax sale provisions, and 2% monthly interest, calculated from purchase date to refund date—potentially significant sums depending on timing and outstanding amounts.
  • Local government leverage: Enables proactive recovery of parcels with abandoned buildings, potentially enabling title transfers to public entities or redevelopment efforts.
  • Timeliness: Applies prior to redemption or tax deed issuance, which could alter timelines for tax sale proceedings involving affected parcels.
  • Definitions: Relies on the existing definition of an “abandoned building” in 657A.1.

If you’d like, I can provide a side-by-side comparison with current law to highlight exactly what changes and any potential edge cases.

Compiled from official sources — confirm details with the bill’s official record.

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