With the increase in foreclosures against residential properties and homeowners facing financial difficulties, the number of severely neglected and abandoned homes is on the rise. While such situations are unfortunate for the owner of the deteriorating property, the condition of the property can also have a significant impact on neighboring property owners. In addition to being a neighborhood eyesore, the consequences can range anywhere from a higher risk of insects, rodents or other pests, to lower property values and vandalism. This can adversely affect the ability to sell a property in the area or even to refinance it if there are too many abandoned properties in the area.
Most municipalities have nuisance abatement and health ordinances which empower the municipality to take action to force a homeowner to correct a property condition which threatens the public health or safety. Contacting the municipal building code official or health officer is often the first line of defense.
However, in some situations, homeowners abandon their property upon the commencement of foreclosure litigation. Since they will be losing the property through foreclosure, they vacate the property and then fail to maintain it. New Jersey is in the forefront of addressing this issue. Under the New Jersey Foreclosure Fairness Act” (the “Act”) passed in January 2010, lenders serving foreclosure summons and complaints on residential properties must, within ten (10) days of service, notify the municipal clerk where the property is located. The notice must contain the name and contact information for the representative of the foreclosing lender who is responsible for receiving complaints of property maintenance and code violations.
The Act also imposes upon the lender the responsibility for notifying the municipality if the owner of the residential property vacates or abandons the property after a foreclosure action has been started.
If the owner of a residential property vacates or abandons any property on which a foreclosure proceeding has been commenced or if the residential property becomes vacant at any point subsequent to the lender’s filing the summons and complaint to foreclose on a mortgage, but prior to title vesting in the lender or another third party, and if the property is found to be a nuisance or in violation of any applicable State or local code, the appropriate municipal official shall notify the lender, which shall have the responsibility to abate the nuisance or correct the violation in the same manner and to the same extent as the title owner of the property. Thus, the municipality can require the foreclosing lender to clean up an abandoned property. If the municipality has to perform the clean up itself, thereby expending public funds to abate the nuisance or correct a violation on a residential property, then the municipality may take action against the foreclosing lender in the same manner as it could against the owner of the property.
Performing any maintenance yourself on a neighboring property should not be done without express permission from the property owner and, if applicable, the foreclosing lender. Otherwise, one could be subject to trespass charges and other potential liability.