New Legislation Allows For Daily Fines for Neglected Foreclosure Property
Cities and counties can now impose civil fines of up to $1,000 per day on owners who fail to adequately maintain residential foreclosure property. The new urgency legislation (SB 1137, adding § 2929.3 to Cal. Civil Code) that went into effect on July 8, 2008 authorizes a "government entity" (which includes cities, counties and special districts) to impose fines on a "legal owner" who purchases a vacant residential property at a foreclosure sale or who acquires the property through foreclosure under a mortgage or deed of trust. Under new Civil Code § 2929.3, owners can be fined if they do not maintain the exterior of their property. Some of the examples of "failure to maintain" include permitting vegetation to grow excessively such that the value of surrounding properties is diminished; failing to prevent trespassers or squatters from remaining on the property; allowing mosquito larvae to grow in standing water; and permitting other conditions that create a public nuisance. (Civ. Code § 2929.3(b).)
If a governmental entity seeks to impose a fine under the new provisions, it must first provide notice of the alleged violation, including a description of the conditions, and a notice of intent to impose a civil fine. (Civ. Code § 2929.3(a)(1).) The owner must be given at least 14 days to begin corrective action and 30 days to complete it before a fine can be imposed, unless a specific condition exists on the property that threatens public health and safety. (Civ. Code § 2929.3(a)(2).) If such a public health and safety threat exists, the local entity can require the condition be remedied in less than 30 days, but the owner must be given notice of the determination that a public health and safety issue exists, along with a specified time for compliance. (Civ. Code § 2929.3(c).) Prior to imposing a fine, the governmental entity must allow for a hearing and opportunity for the owner to contest any fine that may be imposed. The fine can be imposed for each day the owner fails to properly maintain the property, beginning on the day after the time to remedy has expired. Any fines collected are allocated to the local government's nuisance abatement programs.
Although the legislation specifically states that it does not preempt any local ordinances and the remedies are cumulative and in addition to any other remedies, governmental entities cannot impose fines under both the new legislation and a local ordinance. (Civ. Code § 2929.3(e).) Local governments are not, however, precluded from imposing a fine under the state legislation and commencing an abatement action under their local ordinances.
This bill, which expires on January 1, 2013, provides an important new tool for the local governments in their code enforcement tool kit.
This post was prepared by Nancy Thorington (nthorington@meyersnave.com) in the Santa Rosa office of Meyers Nave.
