A landlord in Ontario, Canada recently pleaded guilty to fire code violations in connection with a fire that occurred in an apartment building. http://www.mykawartha.com/news/news/article/905196 What caught my attention in the article that discussed the case was a statement that landlords can be held liable if any occupant is injured in a fire because the building is not compliant with the fire code. This is true in the United States, as well. Owners run a risk when they do not fix code violations because if someone is injured or killed, there is very good chance the owner will get sued for negligence. Sometimes when a law colleague is pursuing a personal injury suit, I’ll get a call from him or her asking for help in understanding how building and fire codes work. Usually, I can find something in the code that covers a violation that led to the injury. Good landlords don’t take risks and try to avoid problems so they don’t end up on the other end of a lawsuit.
Once again a building has collapsed because the building code was ignored. 65 people were killed when a building collapsed in East Delhi, India. http://blogs.wsj.com/indiarealtime/2010/11/16/qa-how-safe-are-buildings-in-indian-cities/ India has a national building code but it is up to the local jurisdictions to implement it according to Virendra Kumar Paul, head of the department of building engineering and management at Delhi’s School of Planning and Architecture. In an interview with the Wall Street Journal he says that there is a lack of concern among authorities, building owners, engineers and management. Some buildings are constructed without a building permit or without any regard for the building codes. When I teach Legal Aspects of Code Administration, I discuss the cycle of complacency and outrage. Human beings throughout history have reacted strongly to large tragedies, adopting stronger codes, stepping up enforcement, etc. However, complacency sets in and the codes are ignored or weakened in the interest of expediency until the next tragedy. Then, the cycle continues until another building collapses.
The cycle of complacency and outrage
After writing this morning’s post, I came across a chart that someone had made to show who was the actual owner of his mortgage. You can find it at http://www.zerohedge.com/article/just-when-you-thought-you-knew-something-about-mortgage-securitizations One of the comments on the article says it looks like the wiring design on a hybrid car. Unbelievable.
We are all yearning for stability in the housing market so inspectors no longer have to deal with foreclosure issues and bank owned properties. However, it doesn’t appear that could happen anytime soon. In my classes around the country I’ve tried to explain how the real estate market got so bad with the sub-prime loan mess. I’ve explained that a real estate mortgage is not held by one lender but by thousand of investors who own a tiny piece if it after it has been bundled into a security sold on Wall Street. The robosigner scandal shows that the lenders really don’t have a clue as to where all of the paperwork from these loans is located. In some cases, there isn’t a person anywhere who can sign an affidavit to support a foreclosure because the paperwork is simply lost in the black hole of the mortgage securities hidden fortress. There is a fear this is going to drag out the crisis as lawsuits and investigations continue to find out what the financial industry was really up to in creating these monstrous financial inventions. There’s a good analysis of the potential problem at http://www.huffingtonpost.com/2010/11/16/robosigners-foreclosures_n_784098.html?utm_source=DailyBrief&utm_campaign=111610&utm_medium=email&utm_content=NewsEntry&utm_term=Daily+Brief
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.
Every time I hear that a jurisdiction wants to weaken its building code to placate local developers, I shake my head in disbelief. We forget that modern building codes prevent tragedies. On Saturday, a 7 story apartment building in Bangladesh started tilting drastically into a 17 story building nearby. A report from that area states that:
The foundation of Kathalbagan building which was constructed on a filled up pond was required to reach a depth of 65 feet below the ground. But the developer found it convenient to carry out piling work up to a depth of 25 feet.
(You can see a picture at http://www.thedailystar.net/newDesign/latest_news.php?nid=26902 We need to remind our local officials that these types of tragedies rarely happen because we have strong building codes.
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.
The Chicago Tribune had an informative article on the problem of half-built residences and the effect on neighborhoods on Sunday. http://articles.chicagotribune.com/2010-10-16/news/ct-met-half-built-houses-20101016_1_half-built-homes-construction-site-property-values We’ve been struggling with the problem for over 2 years now with spotty success. The homes are half-built because the contractor or homeowner ran out of money and can’t get a new loan. Many of the properties are in foreclosure. Sometimes we’ve been able to get the exterior of the building finished so the house looks like it’s occupied even if the interior is not. Usually though we have to wait until the lender takes possession so that we have someone with resources to do something. Another option is to file an action for demolition if the property is unsafe or unsound after being open to the elements though the local jurisdiction has to be willing to spend legal fees on such a lawsuit. Once the building permit expires, I’ve been using the property maintenance code for enforcement. I’ve been arguing that once there is no construction going on, the structure is an “existing structure” of some type and, therefore, subject to the IPMC. Another approach is to declare an unfinished building a nuisance under the local nuisance ordinance and then order that the nuisance be abated. However, the lack of financial resources may make this impossible for the current owner.
