House Bill 1322

AN ACT TO AMEND SECTION 89-8-23, MISSISSIPPI CODE OF 1972, TO IMPOSE CERTAIN DUTIES UPON A LANDLORD AS A RESULT OF HURRICANE KATRINA; TO AMEND SECTIONS 89-7-23, 89-7-51, 89-8-13 AND 89-8-19, MISSISSIPPI CODE OF 1972, IN CONFORMITY; TO AMEND SECTIONS 89-1-301, 89-1-303 AND 89-1-305, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT FORGIVEN MORTGAGE PAYMENTS SHALL BE ADDED TO THE END OF THE MORTGAGE SCHEDULE; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Section 89-8-23, Mississippi Code of 1972, is amended as follows:

89-8-23. (1) A landlord shall at all times during the tenancy:

(a) Comply with the requirements of applicable building and housing codes materially affecting health and safety;

(b) Maintain the dwelling unit, its plumbing, heating and/or cooling system, in substantially the same condition as at the inception of the lease, reasonable wear and tear excluded, unless the dwelling unit, its plumbing, heating and/or cooling system is damaged or impaired as a result of the deliberate or negligent actions of the tenant.

(2) No duty on the part of the landlord shall arise under this section in connection with a defect which is caused by the deliberate or negligent act of the tenant or persons on the premises with the tenant's permission.

(3) Subject to the provisions of Section 89-8-5, the landlord and tenant may agree in writing that the tenant perform some or all of the landlord's duties under this section, but only if the transaction is entered into in good faith.

(4) No duty on the part of the landlord shall arise under this section in connection with a defect which is caused by the tenant's affirmative act or failure to comply with his obligations under Section 89-8-25 of this act.

(5) As a result of the devastation of Hurricane Katrina a landlord shall comply with the following:

(a) Rent may not be increased for a period of one (1) year after September 1, 2005.

(b) Beginning September 1, 2006, rent may only be increased by up to ten percent (10%) for a period of one (1) year.

(d) A landlord may not dispose of a tenant's personal goods until the eviction process is completed.

(e) A tenant shall not be charged for utilities in an area where service is not available.

SECTION 2. Section 89-7-23, Mississippi Code of 1972, is amended as follows:

89-7-23. Notice to quit shall be necessary only where the term is not to expire at a fixed time. In all cases in which a notice is required to be given by the landlord or tenant to determine a tenancy, two (2) months' notice, in writing, shall be given where the holding is from year to year, and one (1) month's notice shall be given where the holding is by the half-year or quarter-year; and where the letting is by the month or by the week, one (1) week's notice, in writing, shall be given. This section shall not apply to rental agreements governed by the Residential Landlord and Tenant Act or rental agreements subject to Section 89-8-23(5).

SECTION 3. Section 89-7-51, Mississippi Code of 1972, is amended as follows:

89-7-51. (1) Every lessor of land shall have a lien on the agricultural products of the leased premises, however and by whomsoever produced, to secure the payment of the rent and of money advanced to the tenant, and the fair market value of all advances made by him to his tenant for supplies for the tenant and others for whom he may contract, and for his business carried on upon the leased premises. This lien shall be paramount to all other liens, claims, or demands upon such products when perfected in accordance with Uniform Commercial Code Article 9 - Secured Transactions (Section 75-9-101, et seq.). The claim of the lessor for supplies furnished may be enforced in the same manner and under the same circumstances as his claim for rent may be; and all the provisions of law as to attachment for rent and proceedings under it shall be applicable to a claim for supplies furnished, and such attachment may be levied on any goods and chattels liable for rent, as well as on the agricultural products.

(2) All articles of personal property, except a stock of merchandise sold in the normal course of business, owned by the lessee of real property and situated on the leased premises shall be subject to a lien in favor of the lessor to secure the payment of rent for such premises as has been contracted to be paid, whether or not then due. Such lien shall be subject to all prior liens or other security interests perfected according to law. No such articles of personal property may be removed from the leased premises until such rent is paid except with the written consent of the lessor. All of the provisions of law as to attachment for rent and proceedings thereunder shall be applicable with reference to the lessor's lien under this subsection.

(3) This section shall be subject to the provisions of Section 89-8-23(5).

SECTION 4. Section 89-8-13, Mississippi Code of 1972, is amended as follows:

89-8-13. (1) If there is a material noncompliance by the tenant with the rental agreement or the obligations imposed by Section 89-8-25, the landlord may terminate the tenancy as set out in subsection (3) of this section or resort to any other remedy at law or in equity except as prohibited by this chapter.

(2) If there is a material noncompliance by the landlord with the rental agreement or the obligations imposed by Section 89-8-23, the tenant may terminate the tenancy as set out in subsection (3) of this section or resort to any other remedy at law or in equity except as prohibited by this chapter.

(3) The nonbreaching party may deliver a written notice to the party in breach specifying the acts and omissions constituting the breach and that the rental agreement will terminate upon a date not less than thirty (30) days after receipt of the notice if the breach is not remedied within a reasonable time not in excess of thirty (30) days; and the rental agreement shall terminate and the tenant shall surrender possession as provided in the notice subject to the following:

(a) If the breach is remediable by repairs, the payment of damages, or otherwise, and the breaching party adequately remedies the breach prior to the date specified in the notice, the rental agreement shall not terminate;

(b) In the absence of a showing of due care by the breaching party, if substantially the same act or omission which constituted a prior noncompliance of which notice was given recurs within six (6) months, the nonbreaching party may terminate the rental agreement upon at least fourteen (14) days' written notice specifying the breach and the date of termination of the rental agreement;

(c) Neither party may terminate for a condition caused by his own deliberate or negligent act or omission or that of a member of his family or other person on the premises with his consent.

(4) If the rental agreement is terminated, the landlord shall return all prepaid and unearned rent and security recoverable by the tenant under Section 89-8-21.

(5) Notwithstanding the provisions of this section or any other provisions of this chapter to the contrary, if the material noncompliance by the tenant is the nonpayment of rent pursuant to the rental agreement, the landlord shall not be required to deliver thirty (30) days' written notice as provided by subsection (3) of this section. In such event, the landlord may seek removal of the tenant from the premises in the manner and with the notice prescribed by Chapter 7, Title 89, Mississippi Code of 1972.

(6) This section shall be subject to the provisions of Section 89-8-23(5).

SECTION 5. Section 89-8-19, Mississippi Code of 1972, is amended as follows:

89-8-19. (1) Unless the rental agreement fixes a definite term a tenancy shall be week to week in case of a tenant who pays weekly rent, and in all other cases month to month.

(2) The landlord or the tenant may terminate a week-to-week tenancy by written notice given to the other at least seven (7) days prior to the termination date.

(3) The landlord or the tenant may terminate a month-to-month tenancy by a written notice given to the other at least thirty (30) days prior to the termination date.

(4) Notwithstanding the provisions of this section or any other provision of this chapter to the contrary, notice to terminate a tenancy shall not be required to be given when the landlord or tenant has committed a substantial violation of the rental agreement or this chapter that materially affects health and safety.

(5) This section shall be subject to the provisions of Section 89-8-23(5).

SECTION 6. Section 89-1-301, Mississippi Code of 1972, is amended as follows:

89-1-301. The provisions of Sections 89-1-301 through 89-1-329 shall apply only in the event that the President of the United States has declared that an emergency or major disaster exists in this state and shall apply only to persons or property directly damaged in an enemy attack, or a man-made, technological or natural disaster declared by the Governor in which Sections 89-1-301 through 89-1-329 was specifically included as a relief measure for those counties covered by such disaster declaration. The provisions of Sections 89-1-301 through 89-1-329 shall apply to any mortgage or deed of trust on real property executed prior to the date of the disaster declaration by the Governor, and to any such instruments executed after the date of the disaster declaration by the Governor which renewed or extended any mortgage or deed of trust executed prior to the date of the disaster declaration by the Governor. When the mortgagee, or owner, or holder, or trustee, or other person having like power shall hereafter determine to foreclose a mortgage or deed of trust on real estate covered by the provisions of Sections 89-1-301 through 89-1-329, he may proceed by bill in chancery, and in the same manner as in proceedings to foreclose under existing statutes in cases where the mortgage or deed of trust contains no provisions for sale by a trustee or otherwise. Any stipulations in the mortgage or deed of trust as to the manner of foreclosure thereunder shall not preclude proceedings to foreclose any mortgage or deed of trust under the provisions of Sections 89-1-301 through 89-1-329. If any mortgagee, holder, owner, trustee, or other person shall attempt to foreclose otherwise than as herein provided, such proceedings may be enjoined by the mortgagor or owner in possessing of the mortgaged premises, or anyone claiming under the mortgagor, or anyone liable for the mortgage debt. Upon the filing of a sworn petition which affirmatively sets forth that neither the petitioner nor any other person owning an interest in the legal title to the mortgaged premises is able to pay the sums in arrears on the mortgaged debt, that no such person or persons have been able to secure a refinancing of the mortgaged debt up to the date of the filing of the petition, after diligent effort, and that because of the destruction of or damage to improvements on the mortgaged premises or because of economic conditions brought about by the effects of such an enemy attack or man-made, technological or natural disaster declared by the Governor, the mortgaged property has depreciated in value as a proximate result of said disaster in an amount in excess of fifteen percent (15%) of its fair market value prior to said disaster, the chancellor of any chancery court of competent jurisdiction shall issue a preliminary injunction enjoining any foreclosure proceedings which have been commenced. The chancellor shall likewise issue a preliminary injunction enjoining any foreclosure proceedings which have been commenced if a sworn petition shall be filed which affirmatively sets forth that as a direct and proximate result of said disaster the petitioner or any other person owning an interest in the legal title to the mortgaged premises is unable to pay the sums in arrears on the mortgage debt, that the petitioner or such other person or persons have not been able to secure the refinancing of the mortgage debt up to the date of the filing of the petition after diligent effort, and that the petitioner has actually sustained a loss in income derived from the mortgaged property, or is presently threatened with such loss as a proximate result of such disaster, in an amount in excess of fifteen percent (15%) of the average annual income from the mortgaged property for the three (3) years immediately prior to said disaster; provided, however, for mortgages or deeds of trust on real property leased or rented for residential purposes from the mortgagor to a third party or parties, the provisions of Sections 89-1-301 through 89-1-329 shall apply only if the mortgagor or landlord has made or is making a good-faith effort to rehabilitate the property to a reasonable standard of habitability.

Upon the issuance of any such preliminary injunction, the mortgagee may file a motion to dissolve said injunction, which motion shall be heard in termtime or in vacation, at a time to be fixed by the court not less than thirty (30) days from the date of the filing thereof. The mortgagor may implead any and all persons owning or claiming an interest in the legal title to said property and all persons who may be primarily or secondarily liable on the mortgaged indebtedness. Process shall be issued for all parties so impleaded in the manner now provided by law in suits to confirm titles and the cause shall be triable five (5) days after completion of service of process on all parties. The court may grant such continuances as may be necessary for the completion of service of process on all parties.

Upon the hearing of the motion to dissolve, unless the petitioner shall prove all of the material allegations of his petition by a preponderance of the evidence, the preliminary injunction shall be dissolved. No injunction bond shall be required for the issuance of the preliminary injunction. If the court shall find the petition was filed solely for the purpose of hindering and delaying collection of the mortgaged debt and without reasonable grounds therefor, reasonable attorney's fees shall be allowed as in other cases upon dissolution of preliminary injunctions, but not otherwise.

If, upon hearing of the motion to dissolve, it shall be determined that said motion should not be granted, then the hearing shall continue in the same manner as provided for in Section 89-1-303, and the court shall enter its order granting the relief provided for by Sections 89-1-301 through 89-1-329 in the case of bills to foreclose. All the terms and provisions of Sections 89-1-301 through 89-1-329 relating to the proceedings had on, or to relief granted under, bills to foreclose shall be applicable.

Provided, however, if a deed of trust be foreclosed according to the provisions therein contained, and the sale be actually consummated without the mortgagor or his heirs or assigns availing themselves of the right to enjoin said sale as provided in Sections 89-1-301 through 89-1-329, the foreclosure and the title resting thereon, if otherwise regular, shall not be controverted on account of any of the provisions of Sections 89-1-301 through 89-1-329, and this limitation shall also apply to minors and all others under legal disability. The provisions of this section shall apply to advertisements for sales already published at the time of the disaster declaration by the Governor in which he specifically included the relief provided for in Sections 89-1-301 through 89-1-329, but in which the sale has not been made; provided that in such case the costs of the advertisement be tendered in cash with the bill for injunction.

A mortgage company who forgives payments immediately following a disaster shall add those forgiven payments to the end of the mortgage schedule and shall not be authorized to demand such payments at the end of the forgiveness period.

SECTION 7. Section 89-1-303, Mississippi Code of 1972, is amended as follows:

89-1-303. Suits for the foreclosure of mortgages and deeds of trust shall be deemed ready for final hearing at any time after the expiration of thirty (30) days from the completion of the service of legal process on all parties. On the hearing, the court or chancellor in vacation shall receive evidence tending to establish the reasonable, normal, actual value of the mortgaged property, may fix a minimum price or reasonable and equitable price thereon, and shall determine the reasonable value of the income on said property, if any. If it has no income, then the court or chancellor in vacation shall determine the reasonable rental value, and in lieu of a present order of sale shall direct and require the mortgagor or those interested therein to pay all or a reasonable part of said income or rental value to be used for the payment of taxes, insurance and interest on the mortgage indebtedness, together with a reasonable sum for the upkeep of said property. Said payments shall be made at such times and in such manner as shall be fixed and determined and ordered by the court or chancellor in vacation which, according to the circumstances, may appear just and equitable for a term not to extend beyond two (2) years from the date of the disaster declaration by the Governor in which he specifically included the relief provided for in Sections 89-1-301 through 89-1-329. After the expiration of two (2) years from the date of the disaster declaration by the Governor in which he specifically included the relief provided for in Sections 89-1-301 through 89-1-329, if any past due principal, interest, taxes and the like have not been paid, a final order for sale may be made. Forgiven payments shall be governed by Section 89-1-301.

SECTION 8. Section 89-1-305, Mississippi Code of 1972, is amended as follows:

89-1-305. If the mortgagor or owner of the mortgaged premises, or other interested person for whose relief Sections 89-1-301 through 89-1-329 are enacted, shall make default in the carrying charge payments, or any of them, required in the order mentioned in the foregoing section, or shall commit any waste, his or her right to a further postponement of a final sale shall terminate thirty (30) days after such default, and the mortgagee or trustee or other persons having the right to foreclose shall thereupon be entitled to apply to the court in termtime or vacation for a final decree of sale upon a satisfactory showing to the court that the default aforesaid has occurred; provided that if the default be explained on the grounds of casualty, inevitable accident, or other good reason wholly beyond the control of the defaulter, and be one which in the judgment of the court can be remedied and made good by the defaulter within a reasonably short period to be fixed by the court, then the court or chancellor in vacation shall have power to excuse the default and to make such order in reference thereto as may be just and equitable. The chancellor shall have power in vacation, at any time after the period mentioned in Section 89-1-303, to hear and determine and to order or decree in respect to any matter that shall arise under Sections 89-1-301 through 89-1-329, to the same extent and as fully as the court could do in termtime, legal notice having been given to all parties of the said hearing in vacation. The court or chancellor in vacation shall have power to revoke the period of extension theretofore granted for the making of the final order of sale in case it may be made to appear to the chancellor in vacation, or to the court in termtime, that the occasion for said postponement no longer exists or is no longer just and reasonable; and, in general, the court, or chancellor in vacation, shall have power to alter and revise its orders theretofore made in any respect insofar as the changed circumstances and conditions may require. Provided further, that prior to two (2) years from the date of the disaster declaration by the Governor in which he specifically included the relief provided for in Sections 89-1-301 through 89-1-329, no action shall be maintained in this state for a deficiency judgment until the period of time extension allowed in any proceeding begun under the provisions of Sections 89-1-301 through 89-1-329 shall have expired. Forgiven payments shall be governed by Section 89-1-301.

SECTION 9. This act shall take effect and be in force from and after its passage.