Measure Would Reduce Municipal Blight, Maintain Property Values for Surrounding Homes
TRENTON – A bill sponsored by Senators Ronald L. Rice and Brian Stack which would allow municipalities to penalize creditors for building code violations for abandoned, foreclosed properties to which the creditor holds the deed was approved by the Senate today by a vote of 31-0.
“When a foreclosed home sits vacant within a community, it can become a magnet for criminal activity, and can deteriorate to cause an economic blight on the remaining homes within the community,” said Senator Rice, D-Essex. “When these abandoned homes fall into disrepair, the creditors who are legally responsible for those homes should step up, do the right thing, and maintain the home. If they fail to fix the homes up in a timely manner, municipal officials should have the ability to impose penalties.”
“With the rising number of foreclosed homes in New Jersey, we’ve seen cases where many of these homes aren’t kept up, and they create a blight on the rest of the municipality,” said Senator Stack, D-Hudson. “As a municipal official, I can attest to the high cost that vacant, foreclosed, and blighted properties have on municipal budgets, because there is an added expense for basic maintenance and police patrols. By requiring creditors who initiate the foreclosure proceedings to maintain these homes or face penalties, we’re putting the responsibility for maintenance where it belongs.”
The bill, S-1740, would authorize municipalities to impose penalties on creditors that fail to timely remedy code violations regarding residential properties in foreclosure for which the creditor is legally responsible. The bill would require a municipality to include a description of the conditions that gave rise to the violation with the notice of violation and to provide a period of not less than 30 days for the creditor to remedy the violation. Under the bill, if the creditor fails to remedy the violation within that 30-day time period, then the municipality would be permitted to impose penalties as outlined for violations of municipal ordinances under current law.
“This is about preserving home values for the surrounding community and minimizing the impact of property blight within our municipalities,” said Senator Stack. “The problem with municipal blight is that it creates a cascading effect – a home falls into disrepair within a municipality, it drives down property values, mortgage holders go underwater on their mortgages, and are paying more into their homes than they’re worth, and many homeowners end up defaulting on their own mortgages, starting the cycle up again. This bill would require lenders to invest in the maintenance and upkeep of foreclosed homes to avoid municipal penalties, so that we can stop the process and maintain the safety and beauty of our communities.”
“Creditors need to take a little more responsibility for the homes that they foreclose on, and be a little more concerned about the effects on the community when those homes fall into disrepair,” said Senator Rice. “New Jersey has one of the highest rates of homes that are either in foreclosure or in danger of foreclosure. We’re dealing with a serious foreclosure crisis in the Garden State. If we do not want to exacerbate that crisis, we need to give local officials the ability to penalize lenders that don’t live up to their responsibility and pass the burden of abandoned properties on to the rest of us.”
The bill now heads to the Assembly for consideration.