Sometimes the best thing that can happen to a problem property is for it to be sold. If the local jurisdiction is operating under the International Property Maintenance Code, the seller must inform the buyer of the code violation notices he or she has received pursuant to Section 107.6 and the buyer must accept responsibility for fixing the violations without reservation. A sworn statement to this effect must be given to the code official of that jurisdiction. If the new buyer goes into the deal with a plan of action, the code official rarely has to take enforcement action against the new owner. This used to happen all of the time to problem properties where I was prosecuting the owners prior to the housing market crash. It’s harder given the economic situation now, but, a savvy buyer can obtain a distressed property at a price where he or she can still make a profit.
Buyers of any type of real estate, residential or commercial, should always have the property checked out by a competent inspector who is familiar with building and fire code regulations. Most buyers can’t recognize less obvious building, property maintenance and fire code violations and could end up having to put thousands of dollars into a property after closing the sale. Under the International Property Maintenance Code, sellers aren’t supposed to transfer property for which they’ve received compliance orders without notifying the new owner of the order and obtaining a signed and notarized statement, signed by the new owner, acknowledging receipt of the compliance order and accepting without condition responsibility for making the corrections or repairs required. (Section 107.6) However, most property owners have never received a notice of violation because the problems are in the interior of the building and the local jurisdiction’s inspector has no way of knowing they exist. When I represented clients purchasing property, I always told them to obtain a home inspection (making sure such requirement was part of the contract) and then insisted that any code violations revealed be fixed by the seller before closing or that my client be given a credit for the cost of repair. If a seller refused to fix the problem, the buyer had the option of cancelling the contract pursuant to the conditions set forth in the contract. People try to save money by not having a lawyer when they buy property. However, this is the time when buyers could end up spending more money than they ever expected if they don’t have proper representation.
It always disheartens me when an important rental inspection ordinance encounters opposition. Based on personal experience, I am convinced that a well executed ordinance can prevent buildings from becoming blighted and can protect tenants from negligent landlords. I was recently reading about a town that adopted a less stringent rental inspection program. http://adirondackdailyenterprise.com/page/content.detail/id/521399/Village-adopts-milder-rental-inspection-plan.html?nav=5008 The town decided not to make owners register rental property. The problem with this approach is that the most effective rental inspection programs require that the owner has a license or permit to rent the property. If the property does not meet minimum code standards, the property cannot be rented until the problem is fixed. Regular inspections are part of the program. If an ordinance is watered down, the inspector has to keep sending notices of violation and citations to the owner while the owner continues to collect rent from the tenant living in substandard conditions. While eventually, the court will order the owner to comply, those owners covered by a rental licensing ordinance seem to comply more quickly. Once landlords become used to a rental inspection ordinance, they tend to do a better job of making minor repairs so large ones don’t become necessary. An inspection program is often considered as part of a crime-free housing ordinance. I’ve been helping local governments understand the benefits of rental inspection programs by making presentations at workshops and board meetings. Sharing my experience with people who are concerned about reducing crime and preserving property values is very rewarding. As more and more owner occupied properties turn into rentals, strong rental inspection ordinances become vital in preserving the quality of life in a community.
Inspectors often get frustrated with how slow demolition suits proceed through the court system under their state statutes. Most states establish a a strict procedure that must be followed before a building can be torn down. Some local authorities adopt the International Property Maintenance Code as their ordinance. The IPMC contains Section 110 which describes the procedure to be followed when that code is used. The code official can order the removal of a structure that is so dilapidated as to be dangerous, unsafe, insanitary or otherwise unfit for human habitation. After the proper notice and order have been served, the code official can cause the structure to be demolished or removed if the owner fails to comply with the demolition order within a specific time prescribed and has not appealed the order. There is no involvement of the local court unless an appeal of the order is filed. One of the concerns that municipal attorneys have is whether state law preempts local ordinance procedure in these kinds of situations. A recent case in Illinois supports the position that a municipality is not precluded from using a procedure established by a local ordinance instead of the state statute where there is no language in the state statute that indicates it is meant to preempt the use of local ordinances. In Village of Northfield v. BP America, Inc., 342 Ill.Dec. 827(2010), an abandoned gas station was located on a parcel of property. The Village of Northfield issued a citation against BP America because the property was a public nuisance under its local ordinance. The local ordinance requires an abatement of the nuisance, including the possibility of razing the structure. When BP did not comply, the village filed a lawsuit against it and the court found it to be in violation and issued a daily fine. BP argued that it was not required to pay a fine because the local ordinance was preempted by the Illinois Municipal Code. The court found that BP was correct because the state law preempted the local ordinance. The Village of Northfield appealed the decision. The Appellate Court found that there is nothing in the state statute that specifically limits a municipality’s ability to regulate an abandoned building to the procedures provided for in that section of the Municipal Code. Therefore, the village nuisance provision was not preempted by state law. This decision only applies to Illinois cases, specifically in the First District, but courts in other states may look to it for guidance if such an issue comes before their courts on the same issue.
When dealing with unsafe buildings, code inspectors shouldn’t forget to consider whether criminal charges might be appropriate. A builder in Pennsylvania was recently charged with theft, deceptive practices and other related offenses. Montgomery Media reported that:
“According to articles in a local daily newspaper, the breadth of shoddy workmanship was staggering: The building had exposed electrical wiring, fire escape stairwells built of wood instead of the required steel, stair landings were constructed of particle board, the sprinkler system was inoperable, concrete block walls held together solely by mortar joints, and a garage wall had cracked concrete blocks, and other structural deficiencies were found by inspectors.” http://www.montgomerynews.com/articles/2010/10/27/springford_reporter_valley_item/news/doc4cc1fe499a784668359492.txt
In criminal cases, the judge can set specific requirements as a condition of probation that may aid the inspector in getting compliance with the code.
One of the greatest sources of satisfaction in my work is helping inspectors achieve observable results, e.g. the roof that gets fixed, the yard that gets cleaned up, finding the right owner to charge. Consequently, when I have difficulty reaching a goal, I get very frustrated. I can think of few situations that are more difficult to deal with than when I am dealing with an occupant or owner who appears to be suffering from a mental illness. All of the normal carrot and stick approaches don’t work, i.e. fines, court orders, contempt of court. Unfortunately it’s difficult to tell which came first, the illness or the lack of maintenance. I recognize that many hoarders suffer from OCD (obsessive compulsive disorder) and others are dealing with bipolar disorder or schizophrenia. Rational conversations are not often possible. Many of these individuals also lack family support, sometimes because their behavior has driven away the very people who could help them. While neighbors may be sympathetic (unless the person’s behavior has antagonized them as well), there comes a point where the neighbors just want the problem fixed. Many are willing to help the offender but usually the offender doesn’t want anyone to help them or doesn’t even recognize the problem. (Again, this may be due to the illness when paranoia is part of it). I’ve written in the past about my success with hoarders, bringing them into court and working closely on a schedule to bring the property into compliance. Most hoarders I’ve dealt with though haven’t lost touch with reality. It’s people who are somewhat delusional that are such a challenge. Sometimes the police can help if the person is a danger to his or herself or others but that’s the standard for involuntary commitment in my state and most mentally ill people don’t qualify. An alternative is a guardianship where a petition is filed with the court asking it to appoint someone to make the day to day decisions for the ill person because he or she is not competent to help his or herself. However, there has to be someone willing to file the lawsuit and take on the responsibility for the person’s care. I don’t think we can ignore problem properties by not issuing tickets for violations just because the offender is mentally ill. A sympathetic inspector who can gain the trust of the offender can get results by closely supervising the person’s progress. I’ve sometimes seen a person’s mental state improve as the residence looks better. If anyone out there has a magic solution, I’d love you to share it with my readers.
I recognize that hoarding cases can be extremely time consuming to deal with and difficult for a property maintenance inspector because the person the inspector is dealing with is not rational about the state of the inside of the residence but I don’t think that’s a reason to do nothing. A woman died in her home in Skokie, IL and the only way to get her was to cut a hole in the roof in this story reported today. http://www.dailyherald.com/story/?id=395161 I had a case last week where the defendant pleaded guilty (he doesn’t even live in the home anymore but stays in an extended stay hotel due to the condition of the house) and the judge ordered him to remove the rubbish within 30 days. I had a picture of a dumpster on the property with just a small amount of items in it to show he hadn’t made much progress. The defendant said he couldn’t possibly do it within 30 days because of his physical condition. After quizzing him, the judge determined that he had the financial resources to hire someone to do it for him. Then the defendant argued that that wasn’t possible because that person wouldn’t know what to keep and what to throw away. The judge told him that he could do that by being the manager of the rubbish removal and he could give directions to the hired help. The defendant still protested but we’ll see next month if progress has been made.
There is a very disturbing report, The Multifamily Housing Market and Value-at-Risk Implications for Multifamily Lending, just released by DePaul University’s Institute for Housing Studies regarding the impact of recent property price declines and foreclosure on multi-family housing mortgages in Cook County, Illinois. The study found that 42% of small rental buildings (2 to 6 units) are in danger of default because they are upside down on their mortgage debt. The study said that if the trend is similar across the nation, it would be on par with the subprime mortgage meltdown. In Cook County, the property value of small rental buildings have fallen to 46%. Few lenders want to provide financing for these types of buildings leaving only Freddie Mac and Fannie Mae as lenders of last resort. For many owners, the income from their buildings are less than the operating expenses. Here’s what’s of concern for local jurisdictions:
The point, in any case, is that a significant amount of disinvestment could occur in this environment, particularly in
those markets where the housing inventory has been vastly overbuilt. The usual argument is that negative equity
and declining rents will fuel foreclosures, which in turn will force down multifamily property prices, setting off a
downward spiral, particularly if credit is tight and lenders (including Fannie Mae and Freddie Mac) are unwilling
to make loans. A side implication, of course, is that, other things equal, as rents decline, the quantity of space
demanded should increase. But where there are requirements that multifamily units meet some minimum building
standards, investors will generally find operating these units financially infeasible when rents fall below this
operating cost threshold level. Thus, at or below this point the property will generally be vacated or abandoned.
You can download the entire report at http://ihs.depaul.edu/ihs/
The Vacant Property Toolkit from the Business and Professional People for the Public Interest is finally ready and posted on its website at http://www.bpichicago.org/VacantPropertyResources.php I’ve written about this organization’s work in the past to address this very important issue and the Toolkit is a great starting point for any agency trying to deal with the problems presented by vacant and abandoned property.
Calling all inspectors. Help me help a prosecutor decide what violations this picture contains
Up on a Roof
. The person is storing tires on a roof and says they’re planters. Illegal outdoor storage may be one violation but I’m looking for something creative
