One of the most difficult situations I deal with as a prosecutor is trying to find someone to take responsibility for a property where it is in foreclosure, the owners have abandoned the building and the lender fails or refuses to complete the foreclosure process. Some nonprofit organizations are stepping in under those circumstances and using state laws on abandoned properties to take them over, fix them up and then sell them. One such organization is featured in an article in the Huffington Post. Unfortunately, in some states, the waiting period for action is lengthy. While the clock is running, the property continues to deteriorate. It is shocking to me that legislatures fail to address the problems these derelict properties create for communities and local government. Far too often state law protects lenders from having to take possession of these properties and maintain them prior to the foreclosure judgment even though the owners are no longer around and the mortgage document gives the lender the right to ask for possession. These nonprofits that take on this difficult task should be applauded for their efforts but there aren’t enough of them to make a dent in this horrendous problem.
The New York Times has a story about a new website that tracks slum landlords in New York city. Tenants can find out about any landlord’s portfolio by clicking a link, “NYC’s worst landlords,” on the apartment search pages on Craigslist. Bill de Blasio, who is a public advocate in New York has launched NYC’s Worst Landlord Watchlist. The list will track irresponsible landlords and enable tenants to report bad landlords. Sometimes we underestimate the power of bad publicity. In one set of cases I was involved in, the municipality issued press releases directed to the hometown newspaper of landlords who were renting without a license because of code violations in their buildings. Nobody likes to see themselves in the local police blotter. I was surprised how quickly some tenants received attention once names got in the newspaper and embarassed the negligent owners.
Is your city included in this list: http://www.huffingtonpost.com/2011/03/30/foreclosures-ghost-towns_n_840663.html#s259246&title=Cleveland_Ohio ? It shows us that the crisis is not behind us yet and we’re going to continue to have problems for a long time. If you have a similar situation, let me know how you’re coping with it.
I was recently contacted by someone who is gathering data on the housing market with a special interest in the health of condominium associations. He was concerned that many of them, especially those that are recent conversions, are struggling financially as more and more units are subject to foreclosure. This raises problems for inspectors. If an association falls apart. who is responsible for common area problems? I’ve had this situation happen a number of times, especially with fire code problems and building code violations. The first question that needs to be answered is how is title held regarding the common area in a condominium development? In some developments the title is held by the condo association but in others, each unit owner owns an undivided share of the common area. After that question is answered, the next one is: what does the declaration of condominium say about who or what is responsible for the upkeep and repair of the common area? Typically the association is responsible. If the association owns the common area and is responsible for its upkeep, the answer is easy. I tell the inspector to notify and cite the association if necessary. I’ve known some jurisdictions that have even helped associations get reinstated that had lapsed. However, if the common area is owned by the individual unit owners, it gets trickier. If the association is responsible for the upkeep under the declaration, then it is in control of the property and is considered an “owner” under the IPMC. However, if the association doesn’t exist, who does the inspector pursue? In that case, all of the owners are responsible and should be notified and cited if necessary. This can be a huge undertaking in a large condo complex. Sometimes following this procedure stirs up the unit owners enough to form a working condo association. It’s far easier dealing with one entity than multiple owners and the local jurisdiction should encourage the owners to follow the condominium declaration and form a viable association.
No better case can be made for rental inspections than when a terrible fire happens. In San Bernadino, California, 26 dwelling units were destroyed in a fire. When inspectors went back to check out the remaining units, over 50 code violations were found including exposed wires and other electrical problems. There were also building code violations including illegal construction and property maintenance issues. Yearly inspections uncover these problems before they become troublesome. It’s fashionable to rail against government intrusion and landlords convince their tenants they shouldn’t cooperate with building inspectors but this is an area where we know people will die if they don’t have an outside party advocating for their safety. It’s all about saving lives.
Access to building permit information has taken an impressive step forward in New York City. DNAinfo.com reports that people with a smart phone can scan a building permit at a site and have access to a variety of information:
“Anyone passing by who wants to know more about a project will be able to scan the QR code with a smart phone and learn about the property owner, the scope of work and any complaints or violations related to that project,” said Mayor Michael Bloomberg, who tested the technology for himself using a permit tacked to the door of 25 Broad Street.
It’ll probably be a chance for most people to play with their phones but the app might reduce calls to the building department in certain situations.
Do you work in a jurisdiction where housing prices continue to fall? Check out this report at Clear Capital to see if your jurisdiction can expect more problems. Housing prices continue to fall due to foreclosure sales and continued unemployment but some area are harder hit than others. Areas with a lot of REOs are especially troublesome. The report found that:
…..every spike in REO saturation (REO saturation calculates the percentage of real estate owned properties sold as compared to all properties sold in the last rolling quarter) has corresponded with a decline in home prices, and vice versa.
The report was not all gloom and doom, finding that some areas of the country are doing better in 2011. But it looks like our problem with foreclosed homes is not going to go away anytime soon.
There are consequences for the homeowner who has work done on his or her home without a permit beyond contending with the local building official. What if a fire breaks out and an insurance claim is filed. Will the insurance company pay? Sam Schneiderman, broker owner of Great Bostom Home Team recently addressed this issue on the Bostom.com’s blog, Boston RealEstateNow. He asked a number of insurance agents and brokers what would happen if someone finished off the attic of a home without permits and a fire destroyed part of the residence. One possibility was that the insurance company would pay the claim and then sue any prior owner responsible for work done if negligence were involved. (Often homeowners don’t realize that work was done without a permit unless they check with the local building department before buying a residence). Another insurance agent said that the company might not cover construction defects. Homeowners looking to save money are being penny-wise and pound foolish when they try to save a few dollars by not applying for a building permit. Having a professional inspect the property not only protects their safety but also protects against liability in the future when it comes time to sell the residence. Work performed without a permit must be disclosed at the time of sale. Failure to do so could result in legal complications for the seller down the road.
I actually escaped the snow in Chicago this week by heading up to the Region III ICC conference in Minnesota where the weather was sunny. I always have a great time at that extraordinary conference. It was great to see that attendance was very healthy and maybe we’re beginning to see a thaw in some of the gloom we’ve all been dealing with since the economy tanked. I taught Advanced Legal Aspects for Fire Code Inspectors and the inspectors asked a lot of good questions. We had a healthy discussion about post-deprivation hearings after an emergency evacuation. There’s quite a few cases now that make it clear that people (tenants and owners) who are deprived of their property rights in a building because of an emergency evacuation order, have a right to be heard after the fact at such a hearing. Most of the time no one actually appears at a hearing or files a notice appealing the order of the fire official. But, in order to meet the requirements of the fourteenth amendment, they must be given the opportunity. By keeping an appropriate record of the hearing or appeal, the local jurisdiction can easily avoid a civil rights lawsuit for depriving an individual of his or her property without due process.
My friends at the Women in Code Enforcement and Development ICC group have their new website up and running. You can find it at www.wicedicc.org The group is dedicated to providing mentoring, advocacy and education for women in the profession. It is the first national ICC chapter and was formed in 2007. It’s an honor being a colleague of these very dedicated women.
