Worried that unkempt vacant and foreclosed properties in Wellington could drag down home values, the Wellington Village Council voted unanimously last week on an ordinance that would give village code some teeth in tackling abatement issues.
Dubbed the “Real Property Mortgage Registration Ordinance,” the measure would require lenders to register with Wellington, pay an annual fee and require them to maintain the foreclosed properties to Wellington’s code.
“Staff believes this program will be a great benefit to Wellington,” Code Compliance Manager Steven Koch said at the Dec. 11 council meeting. “We believe it will reduce the time staff spends dealing with these homes.”
The ordinance would require lenders to register with Wellington’s vendor, vacantregistry.com, within 10 days of foreclosure, to identify a property manager and to pay an annual fee.
This would be beneficial, Koch said, because now it is difficult to know who is responsible for maintaining a property, meaning maintenance goes by the wayside, which causes code issues.
“About one-third of cases at the last special magistrate hearing were foreclosures,” Koch said. “It’s not just uncut grass or poorly maintained pools anymore. It’s issues with dirty roofs and sidewalks. Neighbors next to these homes want to know what is going on. This would give residents an outlet. They can go online and see what is happening with the homes.”
Councilman Matt Willhite said that he has seen similar problems.
“A foreclosed home in my neighborhood had multiple leaks in the roof, and now the home has mold,” he said. “The value of the home dropped. It was one of those problems where if we had known who owned the property, we could have notified them and stopped it.”
Already, the program has been successful in other communities. Koch said that municipalities such as Royal Palm Beach and Delray Beach have similar ordinances and use vendors to manage the registry.
“Almost all of the municipalities we spoke to have a vendor for the registry,” he said. “Royal Palm Beach tried keeping track of properties but decided it was too time-consuming. All of the communities have shown the program cuts down on staff time spent processing these cases. They are also able to get in contact with the lender easier because they have a contact they can get hold of right away.”
Currently, Koch said he has one full-time staff member who handles abatements when a property has gone into decline. That staff member, he said, often must search to find who is responsible for the property. “I’d rather be able to send one e-mail than three letters to get compliance,” he said.
Additionally, it would benefit the Palm Beach County Sheriff’s Office in dealing with crime. “They’ll be able to get updated information to deal with trespassers and other issues,” Koch said.
Vice Mayor Howard Coates asked about Wellington’s projections for foreclosures.
Village Manager Paul Schofield said the numbers are expected to rise slightly in the coming months as courts release properties, but then will decline.
“We expect it to rise to about 1,500 properties,” he said. “But we believe we are at the end. We are seeing more movement in the market, especially in homes in the $400,000 range. The number of homes may go up in the short term, but we believe that in the next three years, it will subside significantly.”
Willhite asked whether the registration fee would need to be paid every time the property changes hands, and Koch said it would.
“If it’s the same vendor, they can annually renew it,” he said. “But it’s similar to a rental license. We still have to process all the information and do the paperwork.”
Wellington would split the registration fee — recommended between $150 and $200 — with the registration company. “There is no upfront cost,” Koch stressed.
Councilwoman Anne Gerwig said she had been against similar measures in the past because costs would be passed on to consumers buying the home. She said this program could help keep homes from needing expensive repairs, however.
“Honestly, somewhere along the way the consumer ends up paying the cost,” she said. “But this keeps down maintenance costs if it’s done all along. It keeps our costs down, and it keeps fines down.”
Gerwig said that with foreclosure rates falling, Wellington probably would not need the program for long. “How difficult is it to get out of?” she asked.
Schofield said there is a year-to-year contract, meaning the council could terminate it at the end of the year.
Willhite said he thought the program would be beneficial.
“I think it’s a good thing to have in place,” he said. “I think it will be helpful to open more dialogue and have more connections. We need to force lenders and banks to start taking care of the property, because they’re leaving us with the problems. It’s not just our problem, it’s the neighbors’. Their home values are decreasing because of the eyesore.”
Willhite added that he would like to see homeowners’ associations notified if the ordinance passes so they can help identify issues.
Coates said he was generally in favor of the ordinance but asked that staff clear up some of the legal language dealing with when the property officially enters the program. He noted that under Florida law, lenders can’t automatically take control of the property.
“They can’t do it without a court-appointed receiver that permits them to have access to and preserve the property,” he explained. “What I think we should do, instead of requiring the lender to do the maintenance outright, we should require them to take all reasonable measures to go to court and get the approvals needed. Then I would be much more comfortable that this complies with the law.”
Coates also pointed out that though the measure was being billed as a vacant homes registry, it was tracking foreclosed homes, whether vacant or not. “This is a foreclosure registry,” he said. “The problem for me is that if the home is not vacant, if someone is occupying it, I don’t know why we don’t have the ability to go to that door and deal with it directly.”
Coates said he would support preliminary approval of the measure but hoped to see the language cleaned up before final adoption.
Willhite made a motion to approve the ordinance, setting the registration fee at $150. It passed unanimously.
