OBTAINING CONTROL OF VACANT PROPERTIES

Some communities want to be able to exert some control over vacant properties in their neighborhoods. This control can take a variety of forms but in essence allows a community to control the condition of vacant properties and act immediately when conditions deteriorate. This helps stabilize the community ensuring its attractiveness and preserving home values.

Possible Actions or Responses:

Some highly organized communities have programs in place to acquire and sell properties in their own neighborhoods. These programs usually operate through a CDC, non-profit, or some other formal business organization established by the community. If managed successfully, this can be a good strategy for obtaining control of vacant properties. This is one way of dealing with the abundance of vacant properties but requires careful thought and consideration. A community must be sure that it has financial and knowledge resources necessary for such an endeavor which may include holding properties for long periods.

If an organization is interested in purchasing properties, it is important to examine sources such as land banks, which have the authority to extinguish taxes and other types of liens on property. If purchasing from a bank it is important to examine the possibilities of short sales and REO sales to avoid over-paying for property in a down market.

While purchasing property is the surest way to absolute control there are other means of controlling the condition of properties in a neighborhood. For instance, communities can utilize nuisance abatement statutes to work with local authorities in controlling the condition of vacant properties. This involves calling appropriate authorities early and often regarding deteriorating properties in a neighborhood. Once a property has entered the nuisance abatement enforcement process the community should stay involved and be proactive by doing things such as providing current information about condition, appearing at hearings regarding the property, and communicating with government officials to ensure compliance with nuisance abatement statutes.

One form of control successfully used in other states is the legal remedy of Receivership. While not true ownership, receivership allows the interested party to “step into the shoes” of the property owner for the purpose of correcting code violations. Receivership can potentially allow neighbors or other interested parties access to the property and the ability to make repairs as needed. DVPC is exploring ways in which Michigan could strengthen its receivership law as a tool for providing communities with increased control over vacant properties.