Receivership as a strategy for notorious nuisance properties
The Washington City Paper has an important cover story this week, "Life Is Hell for Tenants of Giant D.C. Slumlord Sanford Capital," about the systematic abuse of tenants by a residential property owner that seems to specialize in poorly maintained properties catering to the extremely impoverished. The company has been sued off and on over the years.
For as long as I've written this blog, I've mentioned how some states and cities have very strong receivership statutes, which allow for the seizure of properties, in order to "cure" nuisances and correct behavior. Ohio has a particularly strong statute.
-- Ohio Revised Code; Title 37: Health-Safety-Morals; Chapter 3767, Nuisances; Section 3767.41
Pennsylvania too ("Pennsylvania passes receivership law with regard to vacant/nuisance properties," 2010). Also see "When tax lien sales further, not staunch, disinvestment: Indianapolis," 2015.
Note that DC Government's management of properties is not such a great track record that they ought to be the manager of such properties. In my writings, I've suggested this authority be given to nonprofits, as is the case in Ohio. To win receivership, a management and action plan must be created and approved by the Housing Court. To clear title of liens and to be awarded the property, the nuisances have to be successfully cured.
Why Sanford Capital's properties aren't being seized is beyond me. (Other than the fact that the city doesn't want to have to have too contentious a relationship with commercial property owners.)
Having such a statute and process in DC would go a long way towards correcting the negative actions of companies like Sanford Capital.
Taking the property will have a lot bigger impact than paying a legal judgement, which is tax deductible.
Labels: law and the legal process, neighborhood revitalization, nuisance properties, provision of public services, public finance and spending, public safety, receivership
posted by Richard Layman @ 11:36 AM&Permanent Link
4 Comments:
Why they aren't being seized... might be because of what happens the day after the property is seized.
DC government is a lousy landowner. When DC Gov takes a property it will sit vacant for years..... YEARS. DC Gov also doesn't appear interested in being a landlord. To hand if off to a non-profit seems interesting, but what non-profit out there that presently exists that is a real non-profit and not a "non-profit" that only exists to get contracts from municipalities?
Taking a property would make an impact, but it would also use up a lot of resources.
I missed this comment.
You are of course, absolutely right.
In my early writings, I joked that DC's primary property management strategy is "demolition by neglect." And that in an objective evaluation, using criteria of the Housing Courts in Ohio, DCG wouldn't be deemed a credible and eligible receiver, based on past practice.
That's why starting from the very beginning, I've argued that DCG shouldn't be the receiver, but capable nonprofits.
In Ohio, such activities are monitored by the Housing Court, so a receiver has to act, implement the plan to cure the nuisance, or they lose control of the property too. And receivers that fail don't get properties awarded to them in the future.
I can't claim to know all the ins and outs of the various nonprofits in DC, but one that I observe to be very credible is Jubilee Housing. An organization like that could become a receiver. (There are some good for profit property managers. They could act as receivers too.)
In Cleveland, it was the Cleveland Restoration Society (but because the job was so difficult, they got out of it for awhile). They were motivated to save historic properties from demolition.
And recently I wrote about a "nonprofit" business in Philadelphia set up to cure nuisances and make them habitable, usable properties that strengthen the neighborhood. (I can't claim to like their design choices but they do good work otherwise.)
http://urbanplacesandspaces.blogspot.com/2017/01/a-great-example-of-market-at-work.html
Story about the use of Pennsylvania's receivership act to take over a neglected cemetery in Philadelphia.
https://www.inquirer.com/news/mount-vernon-cemetery-philadelphia-conservator-barrymore-20210908.html
Some big time abuse of the process, including seizing lived in properties.
https://www.inquirer.com/real-estate/act-135-philadelphia-blight-conservatorship-law-city-council-hearing-20240322.html
https://www.inquirer.com/news/philadelphia/inq2/act-135-philadelphia-neighborhood-blight-property-conservators-20240305.html
Many of their stories echoed the findings of an Inquirer investigation that uncovered an ecosystem of single-purpose nonprofits, many of them run by real-estate investors, using Act 135 for their own benefit — by filing cases in order to obtain cash settlements, or buying properties targeted for conservatorship at a discount and then flipping them for large profits. In other cases, the law’s fee structure, which reimburses conservators all their costs plus up to 20% of the sale price, meant that property owners were left with nothing.
https://www.inquirer.com/real-estate/philadelphia-act-135-conservatorship-scioli-turco-penn-law-study-20231121.html
https://www.inquirer.com/news/philadelphia/act-135-fishtown-bid-conservatorship-family-home-20231227.html
https://www.law.upenn.edu/live/news/16299-the-disproportionate-impact-of-act-135
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