JAN 11, 2013 3:06pm ET

Rule Fights Blight, Creates Local jobs

JAN 11, 2013 3:06pm ET
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California cities may use $1,000 daily fines to fight neighborhood blight and put locals to work.And it is not a legal loophole.

The law permits it, an insider says, so it is a matter of whether city officials are willing to take the challenge.

According Chris Sorensen of USA Help Inc., a California-based nonprofit dedicated to homeownership education, city officials have the option to charge daily fines to fight the negative effects of vacant bank owned homes and blight in their area.

What Sorensen calls “a simple remedy” is section 2929.3 (a)(1) of the existing California law. It explicitly states that “a city may remedy blight and use health and safety provisions of the law for their constituents as a way to bring in a local work crew, made up of their own constituents and maintain said home” until the legal responsible party takes over.

“Since a city may impose a $1,000-a-day fine for not maintaining a home, this is a sort of piggybank,” he says. Even if a city pays local licensed or insured individuals upfront to maintain REO homes “at some point they will be reimbursed, in full, for doing so.”

Plus the city has the right to reduce the fine to the actual cost of maintaining the home “so no one can claim the city” is abusing its power. Banks may embrace the idea and reimburse a city for the cost incurred to maintain their REO assets, there is room for “a compromise,” if city officials front the money.

In 2012 Sorensen called on local elected leaders, such as city managers and city attorneys to work with the city council to take “decisive action to eliminate blight” by embracing this idea.

Section 2929.3 (a)(1) states the following: “A legal owner shall maintain vacant residential property purchased by that owner at a foreclosure sale, or accquired by that owner through foreclosure under a mortgage or deed of trust.”

It allows a governmental entity to impose a civil fine of up to $1,000 per day for a violation. “If the governmental entity chooses to impose a fine pursuant to this section, it shall give notice of the alleged violation, including a description of the conditions that gave rise to the allegation, and notice of the entity’s intent to assess a civil fine if action to correct the violation is not commenced within a period of not less than 14 days and completed within a period of not less than 30 days.”

The notice shall be mailed to the address provided in the deed and the legal owner receives a remedy period and should a hearing to contest any fine imposed.