Code Attorney

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.

During a recent presentation in Missouri, one of participants raised an issue that has caused problems in enforcement.  He said that many judges and prosecutors insist that an individual be named as a defendant even when it was clear that an owner of the property was a corporation or LLC.  Prosecutors prefer having an individual to prosecute so a warrant can be issued if the individual fails to appear for court.  However, if an individual is named and is not the responsible party, a defense attorney can file a motion to dismiss the charges against him because the proper party is a corporation or LLC.  I think that the reasons judges and prosecutors make this mistake is because they just aren’t familiar with prosecuting corporate entities.  Even corporations can be charged with criminal offenses.  Therefore, prosecutors need to refer to the criminal code to see what procedure exists in those types of cases.  In my jurisdiction, we serve the registered agent and if no one appears for the corporation, we obtain a default judgment and eventually issue some type of process against an officer of the corporation to obtain compliance.  It’s hard to change procedure when “that’s always the way it’s been done” but ultimately, to get results, you have to target the responsible party whether it’s a corporation or not.  In fact, when you’re dealing with commercial or multi-family housing, it’s rare to have an individual as an owner because of the liability issues associated with such ownership.

The Mortgage Bankers Association has updated its list of contacts and servicers for properties in foreclosure. You can find this very helpful information at http://www.mbaa.org/IndustryResources/ResourceCenters/PropertyPreservationResourceCenter.htm

There’s even a link which will let you search for information on a property by address:  https://www.mers-servicerid.org/sis/

Thanks to Kelly Anbach for continuing to pass on these tidbits to share with her fellow inspectors!

The other day one of the inspector’s I work with received a letter from a lender dismissively informing her that unless she provided proof via a recorded document that the bank had a connection with the property in question, it would basically ignore her notice of violation regarding code violations on the property.  (She had actually gotten the name of the lender from the law firm representing the bank!) I quickly researched the property on the county’s Recorder of Deeds website and discovered a document known as a lis pendens.  A lis pendens is a document filed by the bank with the local recorder’s office when it files a foreclosure lawsuit against the owner of the property who has a mortgage with the lender.  “Lis pendens” means simply that a lien is pending.  It notifies any potential buyers about the lawsuit.  As I expected, the name of the plaintiff in the lawsuit was the bank denying knowledge of a relationship between it and the property.  I sent the document on to the inspector who planned to compose a pointed letter to the lender.  It reminded me of how important this document can be.  It contains the full name of the lender (plaintiff) and all of the names of the owners and anyone having an interest in the property (defendants).  It contains the case number of the foreclosure suit so anyone can go to the local circuit court clerk and ask to see the file.  It also contains the name of the lawyers representing the lender which means that an inspector has the name, address and telephone number of a live human being he or she can call to get more information about a problem property.  Whenever you see a lis pendens in the chain a title, you know the property is in or has been in foreclosure so use that information to obtain as much information as you need to identify the responsible parties for the property.

In Victorville, CA a lender decided to tear down new homes and other structures that hadn’t been completed to avoid future fines from the local government for code violations.

Officials of Guaranty Bank of Austin, Texas, which took over the development last year, were unavailable for comment. But Victorville city spokeswoman Yvonne Hester said the bank decided not to throw good money after bad.

“It just didn’t pencil out for them,” she said. “They’d have to spend a lot of money to turn around and sell the houses. They just made a financial decision to just demolish them.”

You can read the entire story in the L.A. Times at this address

http://www.latimes.com/business/la-fi-demolish5-2009may05,0,4930126.story

Local governments frequently use fines as a way to motivate defendants to come into compliance with the code. Sometimes buildings have to be torn down if they’ve suffered too much damage from being open structures. But, this is the first time I’ve heard of tearing down brand new buildings as a way of coming into compliance with the local codes.

One of the most powerful tools  that can be used to force compliance with the law is contempt of court.  When someone wilfully disobeys a court order, that person can be held on contempt of court.  The judge then has the option of imposing a fine on the defendant or sending him or her to jail until there is compliance with the court order.  The person is entitled to a hearing before being sentenced to show why he or she should not be held in contempt of court.  I have found that just the possibility of being found in contempt is enough to encourage a recalcitrant defendant to do what he or she was previously ordered to do.  Only one of the defendants I have prosecuted ever served jail time for contempt.  The rest complied by the date they had been ordered to surrender in court to begin their jail stay, thereby purging themselves of contempt.   While fines usually get most people to comply with the code, there are always a few defendants who are defiant.  In those rare cases, a petition for rule to show cause is the document that ought to be filed by the prosecutor to seek compliance.

I am always surprised to discover that many fire departments and districts don’t make use of the operational permit provisions in the International Fire Code in Section 105.1.1 and 105.1.2(1). Jurisdictions adopting that code can require persons and entities to obtain a permit to engage in certain activities and processes. It’s a useful way to monitor different kind of activities in an organized fashion and to generate revenue through permit fees. This issue came to my attention recently because of a situation I was reviewing involving the improper storage of hazardous materials. The company ignored the notices until ticketed. If it has been warned of the possible revocation of its operational permit to conduct the activity, it would have given the jurisdiction added leverage. Since most departments and districts conduct yearly inspections of commercial structures anyway, additional inspections probably wouldn’t be required. If the company didn’t pass its inspection, it could be subject to a revocation of the permit. Faced with the possibility of losing its ability to conduct business, the business might be more likely to comply quickly. I created forms for operational permit applications and operational permits in my book, “The Fire Inspector’s Guide to Codes, Forms and Complaints”. The CD-Rom that comes with the book contains the forms in Word and PDF formats so the inspector can easily create forms for his or her local jurisdiction. You can access the link to the book by clicking on the “Linda’s Publications” tab at the top of this page.

If you want to find out what houses are owned by Fannie Mae in your jurisdiction, go to http://reosearch.fanniemae.com/reosearch/

Once again credit goes to Kelly Anbach, code enforcement officer extraordinaire, from Hinsdale, IL who discovered this website and passed the information on to me.

I had the privilege of doing a seminar for MACE, the Missouri group for code inspectors, last month in Springfield, Missouri.  The members were energetic and a joy to instruct.  I especially enjoyed speaking with Gary Schlottach, a police officer/code enforcement officer with the Florissant Police Department.  He truly understands that strict code enforcement is law enforcement’s best friend.  He gave example after example of how the code department and police department successfully can work together to improve the quality of life in a community.  One of his ideas was checking with the local recorder of deeds to find out many other properties in other jurisdictions a troublesome landowner has and then contacting the authorities in those jurisdictions to find out if they’re experiencing problems too.  Sometimes it results in getting more up to date contact information or a joint effort to pressure the lawbreaker to become compliant.  Code enforcement inspectors with police training are very good at obtaining information from a variety of sources and are comfortable with obtaining administrative search warrants.  They also understand right of entry restrictions.  Gary knew all of the tricks. He was very generous with his time and advice and expressed an interest in sharing his knowledge with other departments.

This article in the Wall Street Journal describes a scenario we’ve been seeing recently, owner occupied property in distant suburbs turning into rental neighborhoods.  It’s entitled, In the Exurbs, the American Dream is Up for Rent. http://online.wsj.com/article/SB123845433832571407.html

Local governments need to be ready for this change by adopting rental inspection programs that includes single family homes.  By making sure that minimum standards are met from the beginning of this changeover, cities and towns can take steps to make sure that these rental properties don’t have an adverse effect on the quality of life in those communities.