A.G. Schneiderman Announces Introduction Of Expanded Legislation To Combat Spread Of “Zombie Properties” Across New York State
Abandoned Property Neighborhood Relief Act Would Protect Homeowners And Empower Communities To Rein In Spread Of Vacant, Dilapidated Homes
Bill Would Require Mortgage Lenders and Servicers To Notify Homeowners Of Their Rights and Maintain Vacant and Abandoned Properties Earlier; Penalties Would Fund Efforts By Local Government To Address Widening Problem
Schneiderman: This Bill Will Equip Our Local Communities With the Resources They Need To Halt the Spread Of Abandoned And Vacant Homes
SYRACUSE – Attorney General Eric T. Schneiderman announced today that an expanded version of a bill he proposed last year, the Abandoned Property Neighborhood Relief Act, has been reintroduced in the New York State Legislature. The modified bill, which addresses so-called “zombie properties” – vacant and abandoned homes that are not maintained during a prolonged foreclosure proceeding – includes several new key provisions to expedite the foreclosure process for properties that are confirmed to be vacant and direct penalties for noncompliance to a fund to aid local enforcement of the law. The bill (A.6932/S.4781), reintroduced this month by Assembly Judiciary Committee Chairwoman Helene Weinstein (D-Brooklyn) and Senate Coalition Co-Leader Jeffrey D. Klein (D-Bronx/Westchester), comes amid new data showing a troubling increase in the number of zombie properties across New York State. According to data analyzed by the Office of the Attorney General (OAG), zombie property foreclosures increased by 50% from 2013 to 2014, bringing the total number of zombie properties in NYS to 16,701. As a result, almost 1 in 5 residential foreclosures is now a zombie property.
“New York will never be able to fully recover from the devastation of the financial crisis until we seriously reckon with the crisis of zombies,” said Attorney General Schneiderman. “The Abandoned Property Neighborhood Relief Act, which enjoys the support of local elected officials, law enforcement, and fair housing advocates all across New York, will equip our local communities with the resources they need to halt the spread of abandoned and vacant homes. Albany can finally alleviate the burden that these blighted properties impose on our towns and cities by passing the Abandoned Property Neighborhood Relief Act during this legislative session.”
Attorney General Schneiderman’s bill, the Abandoned Property Neighborhood Relief Act, would address the problem of zombie properties in several ways.
Since many families do not understand that they have the right to remain in their home until a judge declares the foreclosure complete, the bill would require that homeowners be provided with early notice that they are legally entitled to remain in their homes until ordered to leave by a court. The bill would also make it unlawful for a mortgagee or loan servicing agent, or a person acting on their behalf, to enter a property that is not vacant or abandoned for the purpose of intimidating, harassing or coercing a lawful occupant in order to induce them to vacate the property, thereby rendering it vacant and abandoned.
In the event that homeowners do leave their property before the foreclosure is complete, the bill would require mortgage lenders and their servicers to take responsibility for properties soon after they have been vacated – and not, as under current law, at the end of a lengthy foreclosure process. Under this provision, lenders and their servicers are required to identify, secure, and maintain vacant and abandoned properties and pay for their upkeep. The bill would also establish a periodic inspection requirement for mortgagees and loan servicing agents to determine if property subject to a delinquent mortgage is currently occupied.
To help municipalities secure zombie properties, the bill would require mortgagees or their agents to electronically register these properties with a newly-created statewide Vacant and Abandoned Property Registry to be established and maintained by the OAG. The registry would be supplemented by a toll-free hotline that community residents can use to report suspected vacant and abandoned properties to the OAG and receive information regarding the status of registered properties, including the identity of the mortgagee or agent responsible for maintaining them. Banks that fail to register an abandoned property will be subject to civil penalties.
One of the new provisions of this year’s Abandoned Property Neighborhood Relief Act would direct penalties for noncompliance into a fund for local municipalities to support code enforcement within the municipality where the violations occurred. Another new provision would create an expedited foreclosure process for properties that are confirmed to be vacant.
"The foreclosure crisis left neighborhoods scarred by vacant and abandoned properties. The introduction of the Abandoned Property Neighborhood Relief Act brings New York State a step closer to curing the blight these properties bring to neighborhoods by holding banks accountable for their upkeep,” said New York State Senator Jeff Klein, Senate Coalition Co-Chair and sponsor of S.4781. “We expect banks to maintain properties and we will keep a list of empty homes. We want to support towns and counties who have been dealing with the blight of zombie properties for too long. With the support of Attorney General Eric Schneiderman, my colleagues in the Senate and the Assembly, I hope we can pass this crucial package of legislation for New Yorkers."
"In too many neighborhoods across New York State, lenders have permitted vacant and abandoned residential properties to fall into disrepair,” said New York State Assemblywoman Helene Weinstein, Assembly Judiciary Committee Chair and sponsor of A. 6932. “These properties are a blight on neighborhoods and bring down the property values in communities. I commend Attorney General Eric Schneiderman for proposing this bill that I am proud to sponsor. I look forward to working with him to help protect our neighborhoods by identifying and ensuring maintenance of properties early on.”
“Improving the quality of life in our neighborhood starts with ensuring we have a good housing stock and this has been a top priority of my administration,” said Syracuse Mayor Stephanie A. Miner. “Vacant, blighted properties become havens for criminal activity and reduce the values of neighboring homes. In Syracuse, we have taken steps to address this issue by starting a vacant property registry and establishing one of the first land banks in New York State. Attorney General Schneiderman appreciates the importance of urban housing needs and has supported our land bank with generous funding and pushed for important legislation, like the Abandoned Property Neighborhood Relief Act, which has the potential to help address even more abandoned properties. I am pleased to join with the Attorney General in calling on the legislature to pass this important bill.”
“Foreclosed and abandoned properties have become a serious problem in our neighborhoods, affecting quality of life for residents and forcing localities to spend precious resources on maintaining them,” said New York State Senator David J. Valesky. “I commend Attorney General Schneiderman and Senator Jeff Klein for recognizing the seriousness of this issue, and working on legislation to address the problem of zombie properties. I am confident it will make a difference here in Syracuse and across the state.”
“For too long, local communities in Onondaga County and the City of Syracuse have been suffering from the growing plague of zombie properties,” said New York State Assemblyman William Magnarelli. “I applaud Attorney General Schneiderman for continuing to work with the state legislature to protect our homeowners and the communities in which they live.”
“The blight of abandoned homes attracts crime, lowers property values and hurts communities, placing an unfair economic burden on local taxpayers who are already struggling,” said New York State Assemblyman Al Stirpe. “This continues to be a problem for Central New York, which has one of the highest incidences of vacant properties in the state. Attorney General Schneiderman’s efforts will help keep more families in their homes, protect taxpayer dollars and revitalize neighborhoods throughout Central New York. I commend him for his leadership and I encourage my colleagues in the Legislature to pass this important legislation necessary to ensure the safety and stability of our communities."
“Zombie properties are a growing problem in our neighborhoods, and I commend Attorney General Schneiderman for his leadership and proactive approach in working with local governments to address this serious issue,” said Utica Mayor Robert Palmieri. “I fully support this legislation and appreciate and thank Attorney General Schneiderman for his efforts.”
“Abandoned and vacant properties attract crime and put the lives of our law enforcement officers and other first responders at risk,” said Syracuse Police Chief Frank Fowler. “This isn’t just about the tax base or property values or the aesthetic appeal of our neighborhoods; it’s about the basic safety of the people who live and work in these communities, too. The state legislature should pass the Abandoned Property Neighborhood Relief Act and give local municipalities the resources they need to keep their streets safe.”
"Land banks are designed to get vacant and abandoned properties back into productive use, but are best equipped to address tax-delinquent vacant properties,” said Katelyn Wright, Executive Director of the Greater Syracuse Land Bank. “About 2/3 of the vacant structures in Syracuse are not tax-delinquent and are more challenging to address. Complementary tools like the Abandoned Property Neighborhood Relief Act will better equip communities like ours to address the full range of vacant buildings that negatively impact our neighborhoods."
“Zombie properties are a scourge on our neighborhoods and frustrate the residents who need to live near them, non-profits and public officials alike,” said Kerry Quaglia, Executive Director of Home HeadQuarters. “One bad property can negatively affect an entire block, so someone or some entity needs to have accountability for that property – it’s just common sense.”
Attorney General Schneiderman’s Abandoned Property Neighborhood Relief Act is one component of his broad strategy to help New York homeowners and communities recover from the foreclosure crisis. He successfully fought for a strong National Mortgage Settlement that delivered more than $2 billion in relief to New York families. He dedicated $100 million from the settlement to create the Homeowner Protection Program (HOPP), a network of free legal and housing counseling services that has served more than 40,000 families statewide.
Attorney General Schneiderman has also pursued relief for communities by directing funds from the National Mortgage Settlement to community “land banks,” which are nonprofit organizations that can acquire property that is tax delinquent, tax foreclosed, vacant, or abandoned and use it for a variety of purposes to counter neighborhood blight.
In June of 2013, Attorney General Schneiderman announced the Community Revitalization Initiative (CRI), which has provided $33 million in funding to land banks that are working at the local level across New York State to rebuild and revitalize their communities. In the first round of funding, which took place in October 2013, OAG disbursed $13 million to eight land banks. After passing legislation to increase to double the maximum allowable number of land banks, Attorney General Schneiderman disbursed an additional $20 million in a second round of funding in October 2014.