May 2, 2016
by Camille R. Hawk
Walentine, O’Toole, McQuillan & Gordon, L.L.P.
USFN Member (Nebraska)
While vacant property ordinances are not new to many of you across the United States, Nebraska (specifically, Omaha) has its first “Vacant and Abandoned Property Ordinance.” We creditors’ attorneys watched with some concern as these kinds of ordinances were sweeping across the nation, wielding power against creditors as lienholders — often in the form of a stick and not a carrot. Granted, it is best that properties be maintained for all involved. No one, including the creditor, wants a deteriorating or dilapidated property, which then reduces its value, as well as the value of the properties surrounding it, or causes a danger to the public.
Further, the general taxpayer should not have to foot the bill for the responsibilities of owners who allow their properties to be in disrepair. That being said, with the passage of these types of ordinances, the creditor as a lienholder and not an owner can now be held responsible for the abandoned and vacant properties, often with great burden and financial impact.
Chapter 48 of the Omaha Municipal Code (entitled “Property Maintenance Code of the City of Omaha”) now includes Division 15 (entitled “City of Omaha Vacant and Abandoned Property Ordinance”). It became effective December 2, 2015 and covers the City of Omaha and properties within a three-mile radius of the city. Simply put, it established a vacant and abandoned property registration program wherein owners and sometimes lienholders (i.e., the “responsible party”) must register the properties, pay a $500 registration fee every three months, and provide evidence of maintenance of the properties.
The applicable properties must be vacant and show evidence of vacancy. Additionally, the lienholder can become the responsible party in the event that the property is the subject of a decree of foreclosure in favor of the lienholder, a deed-in-lieu of foreclosure that has been delivered to the lienholder, or in the event that the lienholder is the highest bidder at a foreclosure sale.
The responsible party must register the abandoned real property and pay the fee within thirty days of the notice to do so from the Permits and Inspections Division (P&I Division). The registration is to be done with a form specified by the P&I Division. Failure to timely register an abandoned real property, neglected building, or vacant parcel as defined within the ordinance can lead to registration by the city itself, with fees and penalties assessed upon the land and against the responsible party. Failure or refusal to perform such duties outlined in the ordinance can also lead to personal liability of the responsible party, including but not limited to criminal violations and penalties.
The responsible party (specifically the lienholder) must have timely and regular inspections of the abandoned real property and is responsible to ensure that the property is well secured and maintained. The use of property managers does not negate the duties of the responsible party, and the inspection requirements become even more frequent.
A property may be removed from the registration requirements under certain circumstances, but the registration is non-transferrable; a new registration is required for each change of ownership. A thorough review of the new ordinance is a must for anyone, creditor or attorney, dealing with real property in and around Omaha, Nebraska.
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Spring 2016 USFN Report