I’m recently back from the Region III conference in Brooklyn Park, MN put on by AMBO. This year I stayed an extra night courtesy of Mother Nature (my Southwest flight was cancelled due to the snow storm in Chicago) but it gave me a chance to visit with a great group of people. One of the things that really impressed me is the difference between laws in a state like Minnesota versus those in my home state, Illinois. Inspectors in Minnesota have more tools at their disposal in dealing with the foreclosure crisis because of their ability to clean a property up and collect the costs on the property’s tax bill. In theory, Illinois inspectors can do the same thing but the way the 2005 law is written makes it so convoluted that I don’t know anyone who has been successful in collecting any money this way. Putting a lien on property isn’t sufficient. Years may pass before the property sells or the lien may be wiped out by foreclosure proceedings depending on local law. What is the difference between states? I believe Illinois is in the grip of special interests that defeat bills that would make it easier to get property cleaned up and help local jurisdictions recoup their costs. Being able to collect municipal expenses on next year’s tax bill for a problem property with a process that is simple and direct is a terrific tool that I wish I could use in my practice. It would eliminate the helplessness inspectors experience during the gap period, from the time the homeowner walks away from a property and the time the lender takes title. I envy my Minnesota colleagues.
I recently did an all day training for the Illinois Fire Inspectors Association and I found myself talking about using multiple codes for violations. Fire inspectors often work with both the IFC and the Life Safety Code and have to decide which one to use. I find that the IFC has superior administrative provisions and gravitate towards it for enforcement. The Life Safety Code is a great code to follow when something is being constructed. Beyond that, I sometimes find that using the IPMC is helpful when dealing with a problem property because it has very specific sections on the condemnation of unsafe buildings, structures and equipment. In some jurisdictions, the building department writes the violations for the fire department or fire district. In those cases, I’ve often seen the inspectors use Chapter 7 of the IPMC for fire code violations since it’s fairly comprehensive for common fire safety violations. Ultimately it doesn’t matter which code you use as long as it’s appropriate to the situation and it meets the local requirements of your jurisdiction and state. Being flexible is important because you may find that you hit a dead end using one code but the solution lies in another. When I wrote the guide books for the IBC, IFC and IRC, I included a chapter on using the IPMC when unsafe structures were involved. The IBC and IFC have some guidance for unsafe buildings but not to the point of condemnation. The IRC has nothing about unsafe structures. Now that there are many half-built single family structures standing around, this becomes a problem since the IBC doesn’t apply to them. I usually recommend using the IPMC (if you have adopted it) if the permit has expired. If you don’t hve the IPMC, you better have a decent public nuisance ordinance. Otherwise, the only alternative is a demolition lawsuit which in most jurisdictions can be a costly procedure.
Once again, I’m thanking Kelly Anbach, inspector for the Village of Hinsdale for finding out about a new program. Detroit is working with lenders to keep foreclosed homes occupied with a special program, ROOF (Retaining Occupancy On Foreclosure) whereby former owners of these homes are allowed to stay in them if they pay for the utilities, a fee tied to their income and other costs. When the homes are sold, occupants can receive refunds of up to 50% of the monthly fees they have paid, if they have maintained the property and moved out on time. This sounds like a great way to keep the maintenance up on the property until a new owner takes over. You can read more about it at: http://www.freep.com/article/20091122/COL06/911220515/1322/Detroit-program-to-keep-people-in-foreclosed-homes
Commercial building foreclosures are going to be a big problem in 2010. Many communities already have these “zombie” buildings which were built during the good times but have stood empty or half-built. In some situations, inspectors I work with are going forward with demolition lawsuits or condemnation. Others just remain empty hoping for better days. This link contains an interesting video on the problem. http://www.huffingtonpost.com/2009/11/20/zombie-buildings-are-they_n_365400.html
There’s a sad tale from Jacksonville, Florida about a woman who was found dead under 8 feet of trash in her home. http://abclocal.go.com/ktrk/story?section=news/national_world&id=7054060 The rescue workers had difficulty locating the body because of the trash. There’s an ongoing debate about how aggressive inspectors should be in enforcing the property maintenance code for interior violations. Should a person be allowed to live in a “trash” house if he or she is not harming anyone else or should inspectors seek compliance against the wishes of the occupant? I think this case points out the dangers of ignoring these kinds of cases. As I’ve said before, I’ve had some success by having the court issue an order for a cleanup with an inspector monitoring the progress. Don’t we have an obligation to use the law to help people who because of a hoarding disorder can’t help themselves?
Once again, Kelly Anbach, a whiz on the internet and inspector in Hinsdale, IL, has found something of interest that I’d like to share. There is a conference in Washington D.C., the National Property Preservation Conference 2009, put on by the mortgage service industry. It’s being held November 4 – 6, 2009. Representatives of the mortgage industry, local government and the federal government are attending. Here is the link https://www.safeguardproperties.com/register/dc09/?p=1 It looks like it will cover many of the issue we are all concerned about.
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
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?
A rental inspection ordinance that involves licensing landlords is a very effective tool in keeping property from falling into disrepair or worse. It’s one of the best ways to keep a lid on crime in a multi-family building. While many landlords oppose it at the beginning, successful ones eventually are won over as they see that negligent landlords have to raise their rents because they have to spend money on repairs. This takes away a competitive edge that they have had since they didn’t spend money on normal maintenance. Tenants benefit because they don’t have to be afraid of getting evicted if they complain about conditions as the local jurisdiction’s inspectors identify problem areas. It’s unfortunate that in Illinois, a local jurisdiction needs to be a home rule community to enact a rental licensing ordinance. There has been legislation proposed to allow all communities to pass these types of ordinances and I hope it becomes law someday. It would make my efforts so much effective to have this option when addressing crime ridden housing.
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.
