Improving Dilapidated And Abandoned Properties

Improving Dilapidated and Abandoned Properties

Iowa League of Cities

2011 Small City Workshops

2011 Small City Workshops

Improving Dilapidated and Abandoned Properties

Workshop Outline

1. Nuisances defined and enumerated

· Nuisances defined and enumerated in Chapter 657 of the Iowa Code.

· Nuisances defined and enumerated in the city code.

ü How should your city define and enumerate the nuisances that it wants to prohibit and deal with?

ü To assist cities in designing their nuisance abatement ordinances, nuisance abatement ordinances from selected cities are available for download from the League’s Web site. See links in List of Online Resources.

2. Determining and Documenting the Existence of a Nuisance by Inspection

· City inspector/representative views the property and attempts to document the existence of the nuisance (creates written report; takes photos).

· If a property owner won’t allow the city inspector/representative onto the property to inspect and document the existence of the nuisance, the city can file documents in court in an attempt to obtain an administrative search warrant.

· Required forms for use in obtaining an administrative search warrant are available for download from the League’s Web site. See links in List of Online Resources.

3. Informal Nuisance Abatement Efforts

· City inspector/representative makes multiple personal contacts with property owner, advises owner of the existence of the nuisance and requests that the property owner correct the nuisance condition.

· If property owner fails to abate the nuisance, the city follows up with letters identifying the nuisance and requesting the property owner to correct the nuisance condition.

4. Administrative Nuisance Abatement Process under Section 364.12 of the Iowa Code, Responsibility for Public Places

· If the property owner fails to respond to city’s informal efforts to abate the nuisance, the city serves Notice/Order to Abate Nuisance on the property owner. The Notice:

ü Identifies the location and nature of the nuisance;

ü Orders that the nuisance be abated by taking specific action;

ü Orders that the nuisance be abated by a date certain;

ü Advises property owner of right to request a hearing before the City Council within a certain period of time;

ü Advises the property owner that if the nuisance is not abated as directed and no request for hearing is made within the time prescribed, the city may:

§ abate the nuisance and assess the costs against the property for collection in the same manner as a property tax, or

§ file a civil citation to initiate a municipal infraction proceeding against the property owner.

· If the property owner doesn’t abate the nuisance as ordered, the city proceeds with abatement of the nuisance and assessment of the costs of abatement. It is recommended that the city only attempt to abate the nuisance and assess its abatement costs in relatively minor nuisance matters involving minimal abatement costs, such as:

ü Mowing weeds, clearing brush;

ü Cleaning up trash, debris, solid waste; or

ü Cleaning snow and ice accumulations from public sidewalks.

· If the property owner doesn’t abate more serious nuisance violations, including:

ü the removal and disposal of junk vehicles, or

ü the demolition of dangerous buildings,

it is recommended that the city initiate a municipal infraction proceeding against the property owner.

5. Municipal Infraction (Court-Assisted) Nuisance Abatement Process under Section 364.22 of the Iowa Code

· City serves on the property owner and files in court a civil citation charging the property owner with a municipal infraction. The civil citation:

ü charges the property owner with maintaining a nuisance in violation of a particular section of the city code;

ü requests the imposition of a civil penalty on the property owner (not to exceed $750 for first violation; $1,000 for second and succeeding violations);

ü requests that the property owner as ordered to take specific action to abate the nuisance violation; and

ü requests that the property owner be enjoined and restrained from future violations.

· In a municipal infraction proceeding, the court can:

ü Approve a consent decree negotiated by the city and property owner, outlining the actions the property owner agrees to take to abate the nuisance;

ü After trying the case and finding that the property owner committed the municipal infraction, impose a civil penalty by entry of a personal judgment against the property owner and enter an order directing the property owner to take specific actions within a certain period of time to abate the nuisance.

· If the property owner fails to abate the nuisance as provided in the consent decree or as provided in the court’s order after trial, the court can:

ü Hold the property owner in contempt;

ü Impose a civil penalty by entry of a personal judgment against the property owner;

ü Authorize the city to abate the nuisance; and

ü Order that the city's costs for abatement of the nuisance be entered as a personal judgment against the defendant or assessed against the property where the violation occurred, or both.

6. Impact on City Nuisance Abatement Proceeding of Intervening Sale of Nuisance Property to Third Party

· In some instances, after a city initiates a municipal infraction nuisance abatement proceeding against a property owner, the property owner will sell the property to a third party, who is not a party to the city’s nuisance abatement proceeding and who would not be subject to the court’s determination and order in that proceeding.

· In effect, this would force the city to start over on its proceeding, assuming it could find and serve suit papers on the new owner.

· Under legislation passed by the 2010 Session of the Iowa Legislature (SF 434), a city’s nuisance abatement proceeding is put on the lis pendens list, which puts other third party purchasers on notice of the city’s nuisance abatement proceeding, gives the court jurisdiction over them and makes them subject to the courts determination and order the same if they had been named and served.

7. Impact on City Nuisance Abatement Proceeding of Intervening Tax Sale of Nuisance Property

· In some instances, after a city initiates a municipal infraction or other nuisance abatement proceeding against a property owner, the property owner ceases paying taxes on the property and it is put up for tax sale. A tax sale occurring after city initiation of municipal infraction nuisance abatement proceedings used to derail those proceedings, because the purchaser of the tax sale certificate could end up with a tax deed to the property, free and clear of the city’s nuisance abatement costs.

· Under legislation passed by the 2010 Session of the Iowa Legislature (SF 434), cities can now file their municipal infractions with the county treasurer, which then prevents the county treasurer from selling that nuisance property at tax sale.

8. Tax Sale Remedies for Abandoned Nuisance Residential Properties under Chapter 446 of the Iowa Code

· Sometimes a property will become so dilapidated that it is infeasible for the property owner to correct the nuisance conditions and recover his or her investment in the property and the costs of correcting those nuisance conditions. When that happens, property owners will often stop paying taxes on the property.

· Chapter 446 of the Iowa Code, Tax Sales, offers various remedies to cities to assist in the abatement of nuisances on abandoned residential properties.

· Section 446.31. City Negotiation for Voluntary Assignment of Tax Sale Certificate.

ü City negotiates with tax sale certificate holder to acquire by assignment the tax sale certificate.

ü City may be able to acquire the tax sale certificate for less than the total principal and interest owing to the certificate holder if the property is in bad shape and there is little chance that the owner will redeem the property by paying the full amount of taxes and interest owing.

ü Time Period for Starting Tax Sale Certificate Foreclosure: 18 months after tax sale.

ü Time Period for Completing Tax Sale Certificate Foreclosure: 90 days.

· Section 446.19A. City Purchase of “Abandoned” Residential or Commercial Multifamily Housing Property at Tax Sale.

ü County passes ordinance allowing city (or county) to purchase “abandoned residential or commercial multifamily housing property”.

ü Prior to tax sale, city files verified statement with county treasurer that a parcel is an “abandoned residential or commercial multifamily housing property” and that it is “suitable for use as housing following rehabilitation”.

ü City purchases the property at tax sale; city receives tax sale certificate.

ü City may assign (sell) the tax sale certificate to person who demonstrates the intent to rehabilitate the abandoned property for habitation or build a residential structure on the vacant lot if the property is not redeemed.

ü Time Period for Starting Tax Sale Certificate Foreclosure: 3 months after tax sale.

ü Time Period for Completing Tax Sale Certificate Foreclosure: 90 days.

ü Under this process, although the city bids on the property, the city incurs no cost because the taxes owing on the property are charged off to the city and all other taxing bodies.

· Section 446.19A. City Purchase of Tax Sale Certificate for “Abandoned Residential or Commercial Multifamily Housing Property”.

ü County passes ordinance allowing city (or county) to purchase “abandoned residential or commercial multifamily housing property”.

ü After tax sale, city files verified statement with county treasurer identifying a parcel sold at tax sale as an “abandoned residential or commercial multifamily housing property”.

ü City may require the purchaser of the tax sale certificate for that property to assign the tax sale certificate to the city by paying to the holder of such certificate the total amount of principal and interest due.

ü If a certificate holder fails to assign the certificate of purchase to the city or county, the county treasurer is authorized to issue a duplicate certificate of purchase to the city.

ü Time Period for Starting Tax Sale Certificate Foreclosure: 18 months after tax sale.

ü Time Period for Completing Tax Sale Certificate Foreclosure: 90 days.

ü Under this process, the cost to the city is the principal and interest due on the tax sale certificate, which it must pay to the certificate holder.

· Section 446.19B. Purchase of Tax Sale Certificate for Abandoned Residential Property by Redeveloper at “Public Nuisance Tax Sale”.

ü County passes ordinance authorizing the county treasurer to separately offer and sell at the annual tax sale delinquent taxes on parcels that are abandoned property and are assessed as residential property or as commercial multifamily housing property and that are, or are likely to become, a public nuisance.

ü On or before May 15, the city files with the county treasurer a verified statement containing a listing of parcels, declaring that:

§ each parcel is abandoned property,

§ each parcel is assessed as residential property or as commercial multifamily housing property,

§ each parcel is, or is likely to become, a public nuisance, and

§ each parcel is suitable for use as housing following rehabilitation.

ü On the day of the tax sale, the treasurer separately offers and sells those parcels at the "public nuisance tax sale".

ü Only persons who have entered into an agreement with the city to rehabilitate the property as housing are eligible to bid at the public nuisance tax sale.

ü Time Period for Starting Tax Sale Certificate Foreclosure: 3 months after tax sale.

ü Time Period for Completing Tax Sale Certificate Foreclosure: 90 days.

ü Under this process, there is no cost to the city because the redeveloper who bids at tax sale pays all amounts due at tax sale.

9. City Petition for Title to Abandoned Nuisance Residential Property under Iowa Code Section 657A.10A

· City files petition in district court, alleging that the building is:

ü used or intended to be used for residential purposes; and

ü “abandoned” (i.e. has remained vacant and has been in violation of the city housing code for a period of six consecutive months).

· Petition is served upon owner and any other named respondents by certified mail and by posting the notice in a conspicuous place on the building.

· Hearing on city’s petition is held not less than 60 days after it is filed with the court.

· In determining whether a property has been abandoned, the court shall consider:

ü Whether any property taxes or special assessments were delinquent when the petition was filed.

ü Whether any utilities are currently being provided.

ü Whether the building is unoccupied.

ü Whether the building meets the city's housing code for being fit for human habitation, occupancy, or use.

ü Whether the building is exposed to the elements such that deterioration of the building is occurring.

ü Whether the building is boarded up.

ü Past efforts to rehabilitate the building and grounds.

ü The presence of vermin, accumulation of debris, and uncut vegetation.

ü The effort expended by the petitioning city to maintain the building and grounds.

ü Past and current compliance with orders of the local housing official.

· If the court finds that the property is “abandoned”, the court can enter judgment awarding title to the property to the city “free and clear of any claims, liens, or encumbrances held by the respondents”.

10. Programs Available Through State Agencies to Address Derelict Building Concerns.