However, many rehab projects never take-off, or stall for unforeseen difficulties-- owners can fall victim to a range of personal and business problems that delay or interrupt construction. We have seen them all.
Mayor Scott recently announced a thirty day study period by all departments of City Government. His stated goal is to immediately reduce the City's glut of vacant properties. To this end, the City's January 31, 2022 press release announces that:
As of January 28, 2022, there were 15,032 vacant houses in Baltimore City. About 13,560 of these vacant properties have private owners. Approximately one-third of the vacant buildings are already under a transformation: being rehabbed by a private owner; part of a larger redevelopment plan; in court under a vacant building receivership action; being prepared for demolition; or a City-owned vacant available for immediate sale to a qualified buyer ready to rehab. The Department of Housing and Community Development under Commissioner Alice Kennedy has ongoing initiatives in place to acquire and convert, stabilize or demolish these vacant houses. This directive aims to accelerate, expand, and enhance these processes and reduce the number of vacant homes in Baltimore City.
Young & Valkenet has represented owners, lenders, title insurers and contractors in all phases of Baltimore City receivership actions. We also represent adjoining neighbors who own property that has been damaged by the poor condition of a Baltimore City vacant.
According to Mayor Scott, the City's initiative will result in marked increase in the number of receivership petitions to be filed:
DHCD attorneys are on track to successfully file nearly 500 receivership cases this fiscal year. With this directive, Mayor Scott is seeking to increase these numbers substantially.
In our experience, a majority of receivership actions can be resolved with close coordination between us, our clients, and the City attorney. The District Court of Maryland judges are often willing to let the parties negotiate an agreement that leads to completion of code compliant rehabilitation. However, the City intention to greatly increase filings may trigger changes in how courts accommodate the parties. The courts must find a way to efficiently administer an influx of new cases. This is likely to result in less patience with joint requests to extend schedules to accommodate completion of projects, and more contested hearings and trials. In the midst of a pandemic, construction crews, materials and financing have only become more difficult to locate and engage.
We have also found that a large number of rehabilitated properties remain listed as "vacant," and trigger receiverships AFTER a sale to innocent homebuyers. The rising real estate market and shortage of saleable homes, plus thin pandemic staffing of Government offices has created settlement pressures where the permitting and inspection histories of properties rehabbed over the last two years remain incomplete or difficult to track. We have become involved in numerous disputes where rehabbed properties have been listed as "vacant" for lack of permits, inspections and use & occupancy certificates. This triggers title insurance claims, and claims for breach against sellers and contractors. Meanwhile, the new homeowner must defend a City receivership action.
The City's promised new wave of receivership filings is coming. We have your life vest waiting. Fill out the contact form and let's talk about your situation.
