Protecting problem properties (new law)

A clarification to rules and regulations for how cities can secure foreclosed and abandoned properties so they cannot be used for improper purposes may help in some troubled areas.

Rep. Jeff Hayden (DFL-Mpls), who sponsors a new law with Sen. Linda Higgins (DFL-Mpls), said that Minneapolis had about 3,000 foreclosed properties in 2008 and is on pace for about the same this year. However, the state’s largest city is far from being alone during the current foreclosure crisis.

When a property is deemed abandoned by a court, a city is permitted a limited right of entry to secure the property. The law limits which city employees can determine an entrance to the property is necessary, including a housing official.

In order to get the property sold, the law allows a political subdivision to request reduction of the mortgagor’s redemption period to five weeks from six months on a foreclosed abandoned property.

Other aspects of the law, which has various effective dates, include:

• specification of certain notice requirements;

• extension of the deadline for action by a property owner from six to 14 days from being ordered to secure the premise, and specifying that failure to do so could result in municipal action;

• classification of the sale or gift of alcohol in an abandoned property as a public nuisance in certain circumstances; and

• the holder of a sheriff’s certificate of sale — the official document granted to the purchaser of real property sold at a mortgage foreclosure sale — is required to secure and protect the premise if there is prima facie evidence the property has been abandoned. If the locks are changed, the mortgager must be provided a key.

HF1394/SF1147*/CH123