The bill amends Sections 11-40-62 and 11-40-69 of the Code of Alabama 1975, specifically for Class 2 municipalities, by introducing provisions that recognize adjoining homeowners as interested parties in municipal lien foreclosures. This ensures that these homeowners receive notice of foreclosure actions and grants them a bidding preference during the process. Key insertions include the definitions of "adjoining owners" and an expanded definition of "interested party" to encompass these owners. The bill also clarifies the definition of "municipal code lien" as one arising from noncompliance with municipal ordinances and updates language regarding owner-occupied properties and their potential exemptions from ad valorem taxation.

Additionally, HB496 mandates that municipal ordinances related to property rehabilitation and sales must include a mechanism for input from adjoining property owners, allowing them to participate in the rehabilitation and use of the property. It establishes a bidding process for adjoining owners prior to public auctions, requiring bidders to submit an affidavit confirming their status as owner-occupants and eligibility for tax exemptions. If bids are received from adjoining owners, the municipality must accept the highest bid and cancel the public auction; if no bids are submitted, the public sale will proceed as planned. The bill is set to take effect on October 1, 2026.

Statutes affected:
Introduced: 11-40-69
Engrossed: 11-40-69
Enrolled: 11-40-69