Baltimore’s Receivership ProgramReclaiming Vacant Properties

Pittsburgh ConferenceSeptember 24, 2007

Presented by: Julie Day, Esq. and Blair Griffith, Esq.Code Enforcement Legal Section

For additional information or questions contact:Blair.Griffith@Baltimorecity.gov

410-396-4140www.baltimorehousing.org

GIS technology is utilizedin planning and selection

Receivership

The Baltimore City Receivership process isin the City’s Building, Fire and Related Codes

Section 121

Baltimore Codes are available online at:

http://cityservices.baltimorecity.gov/charterandcodes/

Baltimore’s Receivercan Rehabilitate

Sign contracts, borrow money usingreceiver’s lien as security

Manage the property afterrehabilitation for up to 2 years,applying any rent to retire costsof rehabilitation

Foreclose on receiver’s lien oraccept a deed in lieu offoreclosure

or transfer the property

private sale if at fair market value and allsecured interests agree

or

public auction - publicly noticed, withbidders pre-screened for ability torehabilitate in timely manner

Property owners can defend by:

a. Proving present ability tocomplete the razing orrehabilitation within a reasonabletime,

b. agreeing to comply with aspecified schedule for razing orrehabilitation, and

c. posting bond, in an amountdetermined by the Court, assecurity for performance of therequired work in compliance withthe specified schedule.

Receivership has long been recognized as avalid governmental exercise of police powerin the abatement of public nuisance.

Mugler v. Kansas, 123 U.S. 623 (1887)

As nuisance abatement, it isnot a governmental taking

.

In Baltimore, properties statutorily definedas vacant are deemed nuisances per se.

Designation as a nuisance per serecognizes the vacant building as…

(Building, Fire and Related Codes of Baltimore City (2003) §115.4)c

Can quickly address andremedy nuisance properties

a fire hazard

structurallyde-stabilizingsurrounding

buildings

negatively impacting neighborhoodproperty values and overall quality of life

Neighborhoods are supported,community involvement strengthened

a repository for trash and graffiti

Baltimore’s Code was amended earlier this yearto include vacant commercial structures

Control of property quicklymoves to third-partydeveloper

Target individual vacant properties

in strong neighborhoods

(before…)

Versatility - utilized flexibly – commonlyowned properties, targeted blocks orhouses

After

Clustered in neighborhoods on the brink of renaissance

five adjacent fire-damaged brownstones

become a cleared site for new in-fill construction

Frees municipal acquisitiondollars for other uses

or commonly owned vacants

five in the same neighborhoodowned by one person

Result Total $ to gov't

2313 Callow Ave $138,000.00 $7,955.66

1708 Druid Hill Ave $19,000.00 $2,365.19

1039 W. Lanvale Ave $33,000.00 $2,575.30

1917 McCulloh St $80,000.00 $3,477.00

912 Newington Ave $135,000.00 $17,515.95

924 Newington Ave $113,000.00 $7,761.68

$518,000.00 $41,650.07

Transferred to newowners and recoveredover $41,000 in liens,

costs and fees

Collects governmental liensand costs

Facilitates public andprivate sector cooperation

Monday, September 24, 2007

Court Agent & Receiver's Auctions To The Highest Bidders

7 Baltimore City Homes Requiring Renovation

10:00 A.M.: 3701 Centre Place - Two Story Townhome"Highlandtown" - Baltimore, MD 21224

Pre-Qualification is required for the following properties.

Application Deadline: Mon., Sept. 17, 2007

10:45 A.M. 502 N. Curley Street - Two Story Townhome"Ellwood Park" - Baltimore, MD 21205

11:15 A.M. 1217 N. Luzerne Avenue - Two Story Townhome "Berea" -Baltimore, MD 21213

11:45 A.M. 404 E. Federal Street - Two Story Townhome"Greenmount West" - Baltimore, MD 21202

12:20 P.M. 611 Montpelier Street - Two Story Victorian Home "Better Waverly" -Baltimore, MD 21218

1:00 P.M. 403 Presstman Street - Two Story Townhome"Druid Heights" - Baltimore, MD 21217

1:15 P.M. 2020 Division Street - Two Story Townhome"Upton" - Baltimore, MD 21217(

Auctions Today

Timeframe from referralto transfer

Day 1 = Referral for receivership

Day 45 = Receive Title Work

Day 60 = Notice of Filing

Day 120 = Petition Served/Court Hearing

Receiver Appointment

Day 190 = Sale Ratified

Day 160 = Auction

Day 240 = Transfer to new owner

34 completed receiverships

Over $1.9 million total sale proceeds

$368,000 in city liens and gov’t fees recovered

28 open receiverships8 auctions = additional $999,000 in proceeds

7 auctions scheduled for September 24, 2007

Progress to date

Total

Gov't $

$368,130

$1,611,063

$304,097

$24,266

$10,162

$29,603

City Tax/Stamps Municipal Liens

State Tax/Stamps State Transfer Tax

Unexpected surprises:

Owners resolve housing code violationsand pull permits to be able to participatein receivership auctions

Owners consent to receivership, somewith a specified stay of the receiver’sactions

Creation of recognized “comparative salevalues” utilizing auction prices to helpstabilize market

More unexpected surprises:

Number of dead people holding title

Auction sale price less than governmentliens on property

Successful bidder becomes anotherreceivership candidate

Top 10 Reasons BaltimoreRecommends Receiverships

1. As nuisance abatement it is not a governmental taking

2. Can quickly address and remedy nuisance properties

3. Neighborhoods are supported and community involvement strengthened

5. Versatility - utilized flexibly – commonly owned properties, targeted blocks

4. Control of property quickly moves to third-party developer

10. Assists in transferring dead people’s property

9. Can be utilized collaboratively with municipal acquisition

8. Facilitates public and private sector cooperation

7. Collects governmental liens and costs through sale proceeds

6. Frees municipal acquisition dollars for other uses

Sheila Dixon,Mayor