Foreclosure Dilemma
I was in Peoria teaching Legal Aspects this week and met lots of enthusiastic inspectors eager for tips on how to more effective at enforcement. One of the biggest problems we are all running into is who to enforce the code against in the in-between stage in a foreclosure. Too often the owners are abandoning the property but the lender hasn’t taken possession yet and takes a hands off approach while the property goes downhill. This time period can go on for months. I’m also hearing that in some cases the lenders are walking away altogether. I’ve had some success notifying the lender under the theory that it meets the definition of “owner” under the IPMC. At least the grass gets cut. I’ve encouraged clients to begin demolition lawsuits when appropriate but that usually is for half-built structures. Has anyone found any techniques that work well in this situation? There are a great number of these buildings out there and are so detrimental to the neighborhood.
I am one of the authors of the City of Fort Wayne’s minimum housing ordinance. When there is a violation on a property, we send an “Order to Repair” to both the owner and the mortgage holder. They are required to attend a hearing to answer to the violations. If nobody shows up to the hearing, a civil penalty may be assessed against the property. We have the potential to assess up to $2500 per hearing. This must be paid when property taxes are paid or the property could go to a tax sale. This is getting the attention of lenders in our community. If lenders face the potential of losing houses in tax sales due to penalties racking up, the motivation is there to repair.
Thanks so much for your comment. I’d like to post it on the blog itself, do you mind?
I welcome any comments or feedback. Our new ordinance for both commercial and residential took effect on 7/1.