Rising Maintenance Costs Of Vacant Homes Worry Kansas City

June 30th, 2008

When a homeowner defaults on mortgage payments and is compelled to vacate the property, who becomes responsible for its upkeep?

Kansas City officials are spending thousands of dollars looking after vacant properties because they are unable to locate the owners. During the last fiscal year itself, the city raked up a bill of $ 1.4 million just removing trash, clearing weeds and boarding up abandoned houses.

Locating the rightful owners is increasing becoming difficult, say city officials. A recent trend has homeowners abandoning their properties when they are unable to keep up with mortgage payments. At the same time lenders are delaying foreclosure on them. And the city is caught in between.

The legal status of an abandoned property depends on where the owner-lender relationship stands at that time. If the property has been foreclosed or the owner has handed it over to the bank then the lender is considered to be the owner. On the other hand if the lender has not taken possession then the homeowner continues to be responsible.

City officials are compelled to locate the legal owners when a vacant property falls into disrepair. Apart from mounting garbage and overgrown vegetation, the property may present a security hazard and a site for breeding disease. Its value depreciates and so do that of other homes in the neighbourhood. Caring for the property is an expensive proposition and even tearing it down costs at least $8,000.

Official records filed when foreclosure proceedings are initiated can help city officials locate the present owner and assign responsibility for upkeep and trash abatement. But increasingly, it is becoming very difficult to pinpoint the actual owner. On one side there is the owner of the property who has abandoned it and is not traceable now. On the other is the lender, who has not taken it over yet and so cannot be held responsible for it.

Even when the ownership is clear, actually contacting the person or company responsible can be quite a chore. Instances of unanswered phone calls and missing forwarding addresses are commonplace.

City officials are at a loss when the ownership remains unassigned as they have few means by which they can recover the maintenance costs of the property.

Nathan Pare, head of the dangerous buildings department in Kansas City, believes that the onus of maintenance lies with the lender. Otherwise the city will be forced to recover the amount from the taxpayer’s money. He says, “Let’s not beat around the bush. It’s not fair.”