Code Attorney

I just returned from St. Louis and Kansas City, MO after teaching the Legal Aspects of Code Administration class.  I came across an interesting article in the St. Louis Post-Dispatch about firefighters reconsidering going into vacant structures to fight fires given the risk to the firefighters.  Here’s the link:

http://www.stltoday.com/stltoday/news/stories.nsf/nation/story/928FB8B217BCBA4E862575D8000A8315?OpenDocument

I’m a big advocate of vacant building registry so that the fire and police departments are aware when they go on a call that the building is not inhabited.  We’re doing it in Hinsdale, IL and the response from those departments have been very favorable.  In the town in which I was doing a consultation in Missouri, I was told that in one section of the municipality 12% of the homes were vacant.  This makes is even more important to keep track of these structures.  There’s no sense in someone getting hurt or killed for a building that has been abandoned and is worth little.

I recently met with an attorney who represents lenders to share information about our mutual concerns over properties that have been taken over by lenders.  She gave me some good tips for inspectors who are trying to navigate this confusing area.  She suggested that if you don’t have a contact with the lender begin with the Loss Mitigation Department.  She said that banks really don’t want to own real estate and try to work with mortgage holders to readjust mortgages.  She also said that it’s rare but sometimes a lender will ask the court for early possession if there are problems with the property that jeopardizes its interest.  It’s always wise to inform the lender if you have special concerns prior to the sheriff’s sale, e.g. water in the basement, mold growth.  Ultimately, getting results is all about maintaining relationships, that is, finding key people and developing ongoing relationships so you can be helpful to each other over time.

I am always surprised about the things people build without a permit.  Recently in court I had a defendant who had built an addition without any permits.  He couldn’t even claim ignorance because he was in the building trade.  He then complained when the inspector saw that his deck had been built without a permit.  The defendant’s excuse for that one was that he bought the house that way.  In another case, the homeowners only hired subcontractors who wouldn’t apply for permits.  One of the potential subcontractors asked too many questions, didn’t get hired and turned the owners in to the municipality.  In my book, The Building Process Simplified, I discussed the trouble people can get into when they cut corners and don’t do their due diligence before they buy property.  I only wish more people would read that chapter in the book before they begin construction.  Given the current economic circumstances I’m suspect that more and more people are failing to get permits in order to save money.  Inevitably this is going to lead to some tragic consequences.

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.

The Center for Public Integrity has released a report showing who the top 25 sub-prime lenders were and how they were financed by the very banks receiving bailout money.  If you’re wondering if the lender you’re dealing with is on the list, check out this article:

http://www.publicintegrity.org/investigations/economic_meltdown/articles/entry/1286/

It makes for pretty depressing reading.

The Wall Street Journal has an interesting story on “underwater” houses, those where the amount of the mortgage exceeds the value of the residence.  It estimates that 1 out of 3 homes now fit this category.  The article goes on to say that:

…borrowers who owe 30% more than their homes are worth are far more likely to walk away from their property than those who owe just 5% or 10% more and expect prices to rebound.

It’s important for local governments to consider the implications on the housing stock in their communities in light of this trend.  The article can be found at:

http://online.wsj.com/article/SB124156804522089735.html

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.