Code Attorney

The recent case of Armstrong v. Mayor and City Council of Baltimore, 2009 WL 217867, expanded the definition of  “single housekeeping unit” to include an apartment with four bedrooms  and a common area with kitchen and bath facilities shared by 4 unrelated people, each of whom had a separate lease with the developer. The apartment building was made up of 26 four-bedroom suites.  The City contended that the apartments in the building were rooming units but because the ordinance did not have a strict definition of what constituted a single housekeeping unit, the court did not agree.  The code provided that a dwelling unit may not be occupied by more than one family.  A family was defined as no more than four unrelated individuals who live together.   None of the tenants had access to each other’s bedroom.  It seems to me that the lack of a clear definition of what constituted a “single housekeeping unit” led the court to make its decision.  It highlights how important definitions can be in zoning ordinances.   I had a case where the landlord chopped up a single family home into 3 units with a common kitchen.  Thankfully, the code was clear enough that he was forced to return the home to its single family character after his appeal was denied. Unless a local government doesn’t mind this type of result, it may want to check the definitions in its zoning code.

This does not bode well for reducing the number of foreclosed properties anytime soon now that the foreclosures are spreading to regular mortgages due to the owners’ loss of employment  This article from the Washington Post describes the problem.

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/17/AR2009081703035.html

The National Vacant Properties Campaign has an interesting summary of different approaches being taken around the country regarding vacant and abandoned property. You can find the summary at http://www.vacantproperties.org/strategies/tools.html I especially like the Chula Vista, CA ordinance approach. This is a description if its ordinance.

The Abandoned Residential Property Registration Program is intended to address those properties that are vacant and financially distressed. The program requires mortgage lenders to inspect defaulted properties to confirm that they are occupied. If a property is found to be vacant, the program requires that the lender exercise the abandonment clause within their mortgage contract, register the property with the City and immediately begin to secure and maintain the property to the neighborhood standard.

They must also hire a local company to inspect the property on a weekly basis. The property must be posted with the name and 24-hour contact number of the company responsible for the weekly inspection, maintenance and security of the property. This will remove the City’s Code Enforcement Section from spending limited resources to act as the property manager. It also allows neighbors to have direct contact with a responsible party. It is hoped that the combination of observant neighbors and an accessible local responsible party will deter and arrest any potential deterioration of the property and thus preserve the neighborhood.

This seeks to address the time between the default on the loan and the sheriff’s sale when the lender actually gets title. Here’s a link to the actual ordinance. http://209.242.175.50/weblink7/docview.aspx?id=52169

I was visiting Milwaukee this past weekend when I came across an interesting article in the Milwaukee Journal Sentinel about a case in Florida where a district attorney in northern Wisconsin was litigating with the city of Fort Lauderdale over fines in excess of $700,000 on property worth only $200,000.  His mother had owned the property prior to her death and it had incurred damage due to a hurricane and eventually she ended up with enormous fines due to its condition and the work done without permits.  The son contended the large fines were excessive but the the federal court of appeals recently disagreed with him and stated:

In this case, the fine is properly characterized as a $150 per day fine for each day their house was not in compliance with the Fort Lauderdale Code. The Moustakises do not allege in their Complaint that a $150 per day fine for violating the Code is excessive, only that the cumulative fine of $700,000, which is more than the value of the house violating the Code, is excessive. But the $700,000 fine was created by the Moustakises’ failure to bring the house into compliance with the Code each day for 14 years. Rather than being grossly disproportionate to the offense, the $700,000 fine is, literally, directly proportionate to the offense. The Moustakises have not alleged any facts that demonstrate that the lien and underlying fines are excessive under either the Florida Constitution or the United States Constitution.

Last weekend I went to visit Frank Lloyd Wright’s home, Taliesen in Spring Green, WI.  When you realize that architects were still building Victorian homes when he began working, his genius is truly amazing.  It’s definitely worth the trip.  A person on the tour asked whether Frank Lloyd Wright ever had problems with building inspectors.

The tour guide said that he had, in fact, run into problems with building inspectors over the course of his career.  I did a little research and found some interesting information.  Here is an example from the book Frank Lloyd Wright and the Johnson Wax Building which discusses how Wright submitted to a load test for the “petals” holding up the structure. The state inspector required it to hold 12 tons.  That wasn’t good enough for Wright. (He had a very large ego).  Wright continued to have more weight added to the top.  The “petal” ended up holding 60 tons.

http://books.google.com/books?id=RalDFRIwofgC&pg=PA62&lpg=PA62&dq=Frank+Lloyd+Wright+and+building+inspectors&source=bl&ots=IffRCAO7dS&sig=qJo78FBSAgdweLa5WAUvr5DwvUU&hl=en&ei=9iSCSsWnC42AMsH2mZQL&sa=X&oi=book_result&ct=result&resnum=6#v=onepage&q=&f=false

Building officials have the power they need to work with geniuses like Wright by approving alternative methods of construction, design and materials under IBC 104.11 if the intent of the code is met.  Many inspectors are dealing with green technology and using this provision to approve techniques and materials that were unheard of 50 years ago.

Remember how I’ve mentioned before that it’s hard to find the actual lender for these securitized loans because thousands of investors actually can own a mortgage on a property?  The “lender” inspectors usually deal with is actually the trustee for the securitized note and not the real lender.  For example, you may be dealing with Wells Fargo who is the trustee for Lehmann Brothers securitized note XXX.  Wells Fargo is not the lender; it’s just taking care of the true investors’ interests in the note.  Apparently this is why so many people are having trouble getting a loan modification.  They’re running into the same problem.  Here’s an interesting article that describes the problem:

http://www.huffingtonpost.com/propublica/analyzing-the-loan-modifi_b_253890.html

John Caywood from Ft. Wayne, writes:

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.

This approach works because the city is able to collect the fines because they’re part of the property taxes.  I only wish that Illinois had this kind of legislation.  Unfortunately, all we can do is lien the property and hope to collect it someday or try to collect it like any other judgment.   Readers, do your states allow you to collect debts as part of the tax bill?

If I want to spark a lively discussion in one of my classes, all I have to do is mention the topic of towing vehicles off of private property.  This is one of those issues that has yet to be resolved by the United States Supreme Court.  The issue is: does the Fourth Amendment require a search warrant to seize an abandoned vehicle on private property even though the property owner has been given a due process hearing?  There is a difference in opinion by the courts on what the answer is.  Based on the caselaw I have read, I take the conservative view and tell my clients, when in doubt, get a search warrant.

For example, Conner v. City of Santa Ana, 897 F.2d 1487(1990) found that the:

Warrant requirement of the Fourth Amendment applies to entries onto private land to abate known nuisances even if property owner is afforded certain “process” in connection with nuisance prior to entry.

In Illinois Redwood v. Lierman, 772 N.E.2d 803, 331 Ill.App.3d 1073, 265 Ill.Dec. 432,(Ill.App. 4 Dist. Jun 07, 2002) the court decided that

Business owners alleging  a violation of their civil rights by local governmental officials in that police had been authorized to seize, without warrant, one of their business vehicles from one of their private residential properties sufficiently pleaded a violation of the Fourth Amendment to stave off the officials’ dismissal motion; while the village in which the seizure occurred argued that the business owners had been given numerous hearings before the decision to seize the vehicle was made, the issue was not whether the business owners had been deprived of due process, but whether the village and its officers had illegally entered the residential property in order to seize the vehicle.

In Bezayiff v. City of St. Louis, 963 S.W.2d 225, 233+ (Mo.App. E.D. Nov 04, 1997) a city ordinance which permitted a warrantless entry by city officials onto private property to remove inoperable vehicles violated the Fourth Amendment, despite the contention that the process provided for in the ordinance was an adequate substitute for warrant.

On the other hand some courts have declined to follow this type of reasoning, for example Santana v. City of Tulsa, 359 F.3d 1241 (10th Cir.(Okla.) Feb 25, 2004) which involved the seizure of computer parts from the backyard of the owner as part of a nuisance abatement.  However, I should note that most of these cases do not involve the removal of vehicles.  Rather they involve the demolition of buildings or the removal of rubbish and garbage.
I think it’s very important for code enforcement officers to have a good legal opinion from your local jurisdiction’s attorney before towing vehicles off of private property without a warrant.  Don’t assume that your attorney has researched this area, ask him or her to check it out for you.  Who knows how long it will be before the United States Supreme Court resolves this dilemma.  Remember, the last really important case in building code enforcement, Camara v. San Francisco was decided in 1967.

Should inspectors be worried about foreclosures involving commercial property?  This article in the August 1, 2009 edition of The Economist suggests that this will be the next area of concern.  Many local governments are facing vacant storefronts. Will commercial owners walk away from their buildings too? It’s probably best to prepare for the worst and hope for the best. Personally, I’m hearing stories of banks refusing to loan money to commercial building owners who have always been good borrowers because the banks are trying to exit the business of dealing in commercial real estate. This is leaving many owners in terrible financial condition.  They have equity tied up in the building they could use to pay bills but can’t refinance to get access to the cash.

http://www.economist.com/businessfinance/displaystory.cfm?story_id=14124366