Condo Media - April 2011 - 19

MASSACHUSETTS

by Howard S. Goldman, Esq.

C A I

Lender Initiated Foreclosures
They Can No longer Shirk Their Responsibilities of Maintaining Vacant Properties
uring the foreclosure process, a property owner may abandon the property because he has no equity or stake in the ownership, leaving the lender in possession or control of the property. But, the lender may be an out-of-state institution with no intention of maintaining the abandoned property and no local property manager to oversee its maintenance. Lenders may delay filing the appropriate foreclosure documentation with the local registry of deeds in order to hide from these responsibilities. These units may be in violation of state and local building and sanitary codes, and may be unsafe and susceptible to vandalism. These problems are even more significant in the context of a condominium. If an abandoned unit is left unlocked, squatters may trespass on the property, cause damage internally to the unit as well as the common areas and may be a safety concern to other unit owners. Or, if utilities are disconnected when the utility bills are not paid, the pipes within the unit could freeze and burst, causing significant property damage to the individual unit as well as the entire condominium building.

R e g i o n a l

Making Lenders Accountable
Boston and other municipalities have recognized the problems that arise with absentee lenders, and have passed ordinances to make the foreclosing lenders accountable and responsible for the property’s maintenance. The City of Boston recently passed an ordinance that requires all owners of residential properties, including lending institutions who have initiated foreclosing activity, to register vacant or foreclosing residential properties,

and to maintain the properties. The ordinance defines “owners” very broadly to include “every person, entity, service company, property manager or real estate broker, who alone or severally with others: (1) has legal or equitable title to any [property] …; or (2) has care, charge or control of any [property] …; or (3) is a mortgagee in possession of any such property; or (4) is an agent, trustee or other person appointed by the courts and vested with possession or control of any such property…” A lender initiating foreclosure procedures may meet one or more of these definitions, especially if it has changed the locks to the abandoned unit and exercises control. Boston’s City Council directed its ordinance at lenders as the ordinance’s specified purpose is “to protect and preserve public safety, security and quiet enjoyment of occupants, abutters, and neighborhoods by: requiring all residential property owners, including lenders, trustees and service companies, to properly maintain vacant and/or foreclosed properties; and regulating the maintenance of vacant or foreclosing, residential properties to prevent blighted and unsecure residences.” In essence, the ordinance provides a database of lenders foreclosing on properties and allows the city to hold such lenders responsible for the failure to properly maintain these properties. Several other cities and towns in Massachusetts have enacted similar ordinances, including Attleboro, Cambridge, Chelsea, Everett, Fall River, Gardner, Gloucester, Holyoke, Lawrence, Lowell, Lynn, Malden, Marlborough, Medford, Methuen, New Bedford, North Adams, Quincy,

Randolph, Revere, Somerset, Springfield, Woburn and Worcester.

N e w s

To Protect and Preserve
If you are a manager or trustee of a condominium building faced with a vacated unit in the process of foreclosure, consider the following: demand to the 1. Send a requiringnoticecomply lender it to with applicable local ordinances to register vacant or foreclosing properties and maintain them in compliance with sanitary and building codes.

2. Report violations of any sanitary or building codes for any vacant
or foreclosing property to the local building inspection department, and provide them with the foreclosing lender’s contact information.

3. Seek legal action in local courts requesting equitable relief for a
lender’s failure to comply with sanitary and building codes, and requesting an order that the lender properly maintain the property. A temporary restraining order can be sought in emergency situations (i.e, lack of heat or failure to maintain smoke alarms) and a preliminary injunction may be sought in a nonemergency. In connection with such an action, you also may request treble damages and attorney’s fees pursuant to M.G.L.c. 93A for a lender’s failure to maintain a property in accordance with relevant codes that appears to constitute unfair and deceptive trade practice. CM Howard S. Goldman, Esq. is a partner in the law firm of Goldman & Pease in Needham, Mass.

CONDO MEDIA • APRIL 2011

Condo Media - April 2011

Table of Contents for the Digital Edition of Condo Media - April 2011