Vacant Property Registration

Vacant Property Registration

The Need for Statewide Guidelines

By Robert Klein

Cities across America are now using vacant property registration laws as a tool to catalogue properties in their communities and locate the responsible party for a home.  In 2008, I prompted the creation of the vacant property registration committee for the Mortgage Bankers Association where the concept for this type of ordinance was fully developed. I led the committee in bringing together industry representatives to discuss the impact of these rules on the property preservation world, and recommend more workable alternatives for both cities and servicers.  Over the last five years the property preservation industry has watched as these laws have evolved for the better and for the worse. 

For the better we have seen local governments taking steps to craft smarter laws and work with servicers to more easily achieve compliance.  For the worse we have seen cities use these laws as a tool to pad struggling municipal budgets.  From big cities to small towns we see fees for each vacant property from $10 to $500, with penalties reaching up to $1,000 a day or more for failure to comply with ordinance requirements. 

While there is no doubt that this is troubling, it is not the biggest challenge we face when it comes to registration guidelines.  For servicers the biggest obstacle in complying with these ordinances from city to city is the lack of uniformity.   With an estimated 35,000 municipalities in America, today we are aware of about 1,500 different municipal ordinances.  Those numbers tell us there is potential for thousands more.  A tool that would remedy this problem would be for each state to establish a statewide vacant property registration law.  It would permit each state to consider their local needs when crafting the legislation and give them a better tool to fight blight on a large scale.  This would also allow for servicers to follow 50 different sets of guidelines rather than 1,500 and ultimately support greater compliance. 

Local governments and municipalities have a lot on their plate as they struggle to make ends meet and I believe the statewide law of this nature could alleviate some of that stress.  Not to say that our states are not feeling the same pressure, but I know that this implementation would make our efforts to fight blight more effective and help our struggling communities.