Friday, March 14, 2014

Have you heard what Cincinnati is doing with foreclosures?

Those of us that work in the world of real estate have become quite accustomed to keeping up with changes in the law. There are few industries that are more regulated than ours and it is vital to stay abreast of changes that may affect our livelihood. Many times a new local law or ordinance can spread like wildfire and before you know it the entire country has a new rule or regulation to comply with.

I’m not saying that this is a bad thing. I’ve seen a lot of changes since I began my real estate career and there were many of them that I agreed with wholeheartedly. Of course there were some that I felt were a product of “over regulation” or nothing more than a waste of time but the law is the law.

Recently I became aware of new regulations that have been put into force in Cincinnati, Ohio. Actually the whole thing began in just one district of the city in 2012 but is now being considered for the entire city. In a nutshell the city has had enough of run down vacant properties bringing down property values and has decided to make someone accountable, namely, the banks that hold the mortgages on the foreclosed properties.

The plan requires that lenders register all vacant foreclosed properties with the respective city agency that will then hold them accountable for maintaining the appearance of the now empty home. And just in case you’re wondering, yes, there are fines and fees involved. One of the objectives of this program is to prevent tax dollars from being spent for routine maintenance needs and to prevent other homes in the area from lessening property values. Specific responsibilities for the lenders include such tasks as mowing the grass, removing weeds, and landscaping; in other words, maintaining the exterior appearance of the homes.

An interesting point to consider is that even good intentioned neighbors cannot perform these tasks because technically speaking, they would be trespassing. Another new law is currently being considered in the Ohio senate that would allow local residents to clean up an abandoned or foreclosed property during day light hours without fear of prosecution.

So what does Cincinnati have to do with the rest of the country? As I mentioned earlier sometimes what begins as a local ordinance can quickly become a very popular idea with the “powers that be” and sooner or later the entire real estate industry is affected.

My question is this; do you agree with this new law and would you like to see similar legislation in your neighborhood? I find it hard to argue that someone should be maintaining the many thousands of vacant homes that have experienced foreclosures and after all, the bank does own the home, right? The only other choice is to either allow property values to continue to drop in areas that have a high number of “abandoned” homes and in that case we all suffer the consequences. Of course there is a third alternative, we could simply continue to do nothing and allow the remaining homeowners in these areas deal with the consequences.

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