Indiana Executive Order 20-33 Extends Eviction and Foreclosure Moratorium through July 31, 2020
The prohibition on filing eviction or foreclosure actions involving residential property was further extended by Governor’s Executive Order 20-33 on June 30, 2020. The order provides that the moratorium is extend to July 31, 2020. It further carves out an exception for creditors to file emergency evictions or foreclosures if there is a specific immediate and serious injury, loss or damage to the property other than nonpayment. Finally, it provides that the prohibition against foreclosure does not apply to vacant or abandoned properties.
Indiana Supreme Court Order Regarding Tolling of Interest Leading to Differing Interpretations
The Indiana Supreme Court issued an order tolling interest on March 23, 2020 along with various orders essentially closing the courts to most creditors’ claims. With the state now in Stage 4 of its reopening, courts are starting to review and enter orders on motions for judgment, thus making this part of the state’s executive order more relevant today and moving forward.
The order issued on March 23, 2020 states, “no interest shall be due or charged during this tolled period,” which was effective March 23, 2020 through April 6, 2020, and then subsequently extended through the declared state of emergency via Indiana Supreme court Order dated April 3, 2020. As such, the tolling remains effective until the Governor removes the state of emergency declared back in March 2020.
Through this Indiana Supreme Court order, the Indiana Supreme Court order left us all with an open-ended question: can creditors collect interest under the contract post-default yet prior to judgment?
Indiana has no case law specifically excluding a creditor from collecting contractual interest post-default; Indiana has a strong history of supporting a party’s right to contract and post-default interest has traditionally been collectible. In the current state of affairs, however, the emergency relief order tolled “interest” generally, and it’s leading to interesting interpretations.
Recently, one local court has issued a formal statement regarding its interpretation of the tolling of interest provision. Clark County court issued a notice to creditors attorneys last week stating that they will not enter judgments that include either contractual, pre-judgment interest or post-judgment interest during this tolling period. As courts continue to open, we may discover more counties giving a broad interpretation to that law, causing more and more confusion and possible contests over the balance due. Expect delays on judgment entries, revisions to amounts that may be pursued either as part of the sheriff’s sales total bid amount or deficiency balances, and a likely return to the prior provisions for interest going back into effect.
As always, if you have questions about your referrals, don’t hesitate to contact Indiana attorney Amanda L. Krenson.
Radical Reform of Indiana Code Concerning Witnessing of Recorded Instruments
Effective July 1, 2020, Indiana Code § 32-32-2-3(a) shall require that any instrument to be recorded in any Indiana county recorder’s office requires that the document be (1) acknowledged by the grantor of the power, and (2) proved before a witness. This change in the law essentially changes how many of our clients handle Assignments of Mortgages, Deeds-in-Lieu of Foreclosure, Affidavits in Aid of Title, and Powers of Attorney. Moving forward, any instrument must contain a proof of witness that is notarized. That means that there are now two (2) notarizations required on each recorded instrument – one for the grantor of the power, and one for the witness.
At this time, there has been no formal guidance issued within the legislation or by the Indiana Recorder’s Association as to whether the Recorder’s will accept instruments executed prior to July 1, 2020 which do not have the witness proof included or attached. Further, the legislation fails to address the notarial acts or certificates required for the instruments to be entitled to recording. However, the Indiana State Bar Association has issued guidance, including a suggested form that may be used as an addendum to previously prepared instruments, provided below.
If you have any further questions, please feel free to reach out to Indiana counsel, Amanda L. Krenson.