Code Attorney

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

RealtyTrak has just released a study charting the cities with the most home foreclosures. You can find it at: http://www.realtytrac.com/ContentManagement/PressRelease.aspx?channelid=9&ItemID=6965

The Sun Belt is the hardest hit.

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.

Simon Goldstein with the Business and Professional People for the Public Interest shared a great resource with me. It’s a brochure that deals with police-code-community partnerships and it discusses the relationship between code enforcement and neighborhoods. Its opening paragraph is as follows:

Effective enforcement of building and housing codes is a key ingredient in many neighborhood revitalization efforts. Community developers have found that the long term success of their revitalization work often hinges on cleaning up or redeveloping problem properties that deter investors, frustrate existing residents and generally contribute to an environment of fear, disorder and crime. Law enforcement also understands the important relationships of crime, blight, and code enforcement. Under the rubric of the “broken window theory”, social scientists have documented the opportunistic nature of crime, showing that vacant properties and dilapidated buildings become magnets for crime. Applying the techniques of problem-oriented policing, more law enforcement agencies today use a place-based approach to tackle these neighborhood hot spots deploying special nuisance abatement teams with assistance from their code enforcement partners.

You can download the entire brochure at http://www.lisc.org/content/publications/detail/5648

I have had some pretty awful trash houses filled with animals in my years of prosecution but this woman kept 150 cats in her mansion in New Jersey. The largest number of animals I ever dealt with were slightly over 100 Bichon dogs where the inspectors did an administrative search warrant. In the past if an inspector found a house like that, we’d put the owner in touch with a developer who would buy the property, tear the house down and build something new. With the current economy, that doesn’t happen and these cases can be real nightmares, especially if the owner doesn’t have the financial resources to hire someone for the cleanup. The residence has to be sanitized before anyone can move back in so it usually has to be condemned, often on the spot. I wonder if the local government will actually collect the fines?

http://www.dailyrecord.com/apps/pbcs.dll/article?AID=2009907100335

One of the things I love about living in the Chicago area is the entertaining misdeeds in which city workers get involved.  Here’s a story from the Chicago Sun-Times about an inspector who catches other people working without a permit.  He is alleged to have installed a flood control system without permits and was caught when he busted a water pipe.  It gets better. He called the city emergency number after the mishap and then asked the responding personnel to give him city-owned parts so he could fix the problem.  Apparently, this was a long standing tradition.  Unfortunately for him, the inspector who responded was a whistleblower on a separate corruption case.

http://www.suntimes.com/news/cityhall/1654513,CST-NWS-leak07.article

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.