The Kansas City Council is considering an ordinance that allows the city to seek a receiver to fix up, demolish or sell vacant buildings whose owners have failed to maintain them. The city ordinance follows on the heels of a change in state law that specifically authorizes Kansas City to draw up its own receivership law. This ordinance will be considered by the public safety and neighborhoods committee on September 23rd.

Following is a summary of the proposed legislation along with a report from the Kansas City Star.

• If within 60 days of a written notice nuisance conditions on a vacant property have not been abated, then the director of neighborhood and community services may petition the circuit court for appointment of a receiver to rehabilitate a vacant nuisance property, to demolish it, or to sell it to a qualified buyer.
• Vacant: a property which is lacking habitual presence of human beings who have a legal right to be on the property, or at which substantially all lawful business operations or residential occupancy has ceased.
• Nuisance: any property which
• Constitutes a public nuisance because of its physical condition or use;
• Constitutes blight on the surrounding area; or
• Is in violation of code requirements so much that it is a threat to the life, health, or safety of the public.
• The petition to the circuit court for appointment of a receiver must include:
• A copy of the original violation notice or order to repair; and
• Verified pleadings that:
• The rehabilitation has not been completed
• Identifies and states the qualifications of the proposed receiver (if other than the city) such as the receiver’s location, experience, and capacity to take on an additional property.
• The pleadings must name as defendants all parties in interest of the property.
• Parties in interest means any owner or owners of record, lessee, mortgagee, trustee, trustor, property trust trustee, personal representative, agent, or other party having an interest in the property as shown by the land records of the recorder of deeds of the county in which the building or structure is located.
• A party in interest may be appointed as receiver if he:
• Demonstrates the ability to complete it within a reasonable time
• Agrees to comply with a specified schedule
• Posts bond as security for performance
• Powers of receiver:
• Right of possession
• Authority to contract for necessary labor and supplies
• To borrow money for the rehabilitation/demolition/sale from an approved lending institutions using the receivers lien against the property as security
• Enter into leases or other agreements on the property and apply the rent to current operating expenses and outstanding rehabilitation expenses
• Pay all expenses associated with operating and maintaining the property
• Pay taxes, penalties, assessments and other government charges on the property
• Dispose of all abandoned personal property found on the property.
• Sell the property to a qualified buyer via a court administrators deed either through a public auction or private sale for fair market value.
• Foreclose on the receivers lien
• Demolish the structure
• And any other powers deemed appropriate by the court
• Sale requirements:
• Notice of auction
• Buyer qualifications: the buyer must demonstrate (10-days before any sale) the ability and experience to rehabilitate the property in a reasonable time
• Profit from the sale must go towards the expenses of the sale, outstanding taxes or fees, the receivers loan, petitioners costs and expenses, then the liens against the property, and finally to the owner of record.
• The receivership may not last more than one year after rehabilitation.
• Receiver must keep a detailed accounting of costs and file a final accounting with the court at the end of the receivership.

KC to consider another way to address vacant properties

The Kansas City Council this week will try to add another weapon in its efforts against vacant, nuisance buildings.

The Public Safety and Neighborhoods Committee will debate an ordinance Wednesday that allows the city to seek a receiver to fix up, demolish or sell vacant buildings whose owners have failed to maintain them. The city ordinance follows on the heels of a change in state law that specifically authorizes Kansas City to draw up its own receivership law.

“We hope to use this new tool to stop the cycle of abandonment and deterioration that is harmful for our neighborhoods and their residents,” David Park, acting director for neighborhood and community services, said in a fact sheet to the council.

The number of vacant and abandoned properties in Kansas City has grown to more than 7,000 in recent years.

The city has tried a variety of strategies to combat these blighted properties, including requiring owners of vacant properties to register them. It has also launched an administrative court, which can levy fines against absentee owners.

But the receivership law may help the city gain control of the most blighted properties.

Park said he got the idea from a similar approach in Baltimore. He explained that the city could ask a circuit court judge to appoint a receiver to determine how best to handle a problem property. Anyone with an interest in the property would be notified, although receivership would most likely proceed on properties for which the owner had long shirked responsibility.

“With most of our tools, we hope that it actually provides motivation for folks to do something,” Park said. But if owners fail to take the initiative, the receiver could figure out how to get the home fixed, torn down or sold.

If repairs are needed, Park said, the receiver could borrow from a lender for construction work, using the property as collateral.

The receiver could be a mortgage company, private investor or community development agency. Park said the city would have to be strategic in picking the right properties so as not to overwhelm the court. He said the law department thought it could start with two or three properties to get a handle on how the process worked.

To view the online article, please click here.

 About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 700 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.