By Darryl Holliday
March 28, 2011
Owners of neglected and abandoned buildings in Chicago—many of which are the result of foreclosure—could face time in jail if the properties aren’t safely secured when left vacant, despite banks’ and third party services’ reluctance to maintain the buildings before foreclosure processes are complete.
Section 13-12 of the city’s Municipal Code was amended on Feb. 9 to include incarceration of up to six months for property owners when a person is severely injured in an unsecured property.
In addition to requiring that a watchman be posted at any vacant and open building in the city between the hours of 4 p.m. and 8 a.m., the ordinance charges “any person or persons owning, maintaining, operating, collecting rents for, or having any legal or equitable interest in a vacant building” with the responsibility of securing it. According to Alderman James Balcer (11th Ward), this would include banks that manage foreclosed homes.
“I would hope, No. 1, that the banks—which have money—secure these buildings, and if not, they’ll be held accountable,” Balcer said.
Of the roughly 18,000 vacant properties in the city, approximately 69 percent are “red-flag” properties—vacant properties where a foreclosure has been filed but no outcome has been reached—according to Geoff Smith, senior vice president of the Woodstock Institute, a nonprofit research and policy organization.
“In a lot of those [red-flag] properties, the servicer is choosing not to complete the foreclosure because once it’s completed, they have the legal responsibility to secure and maintain the properties,” Smith said. “They’re accountable for those properties.”
However, before the foreclosure process is complete, it is up to the property’s occupant, who may have already left the home due to a notice of foreclosure, to maintain and secure the property.
In the event of the occupant walking away from the property, a bank, servicer or third party property owner may wait to secure the building—allowing it to remain unsecured—until foreclosure is complete and the property can be resold, according to Smith.
“Their goal is to ultimately sell [the property], but the logic would be the cost associated with maintaining and securing those properties will exceed what they can expect to get in return,” he said.
Balcer and Smith agree there are definite dangers associated with vacant homes left unsecured, such as break-ins, robberies and drug use in the properties. There are major concerns people may illegally take up residence in the buildings, Balcer said.
There is also a broader community-wide issue involved when unsecured properties deteriorate through a lack of maintenance, according to Smith.
“It can become a detriment to the surrounding community and serve as a magnet for criminal activity,” he said. “It’s essentially considered a blight at that point … that really has a negative impact on the quality of life of those folks who are still living on the block. It destabilizes the community to a great extent.”
According to Smith, the ordinance’s penalties are a decent step, but as far as city residents are concerned, he would rather see people kept in their homes.
“The best step, we always say, is to keep those buildings occupied in some way,” Smith said.