DeKalb County Approves Foreclosure Registry – Agents Be Prepared!

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Connie Stokes, a DeKalb County Commissioner AND a Georgia real estate licensee has proposed and gotten passed an ordinance called the “Foreclosed Registry Program” requiring that all VACANT FORECLOSED properties in DeKalb County be registered with the county at an annual fee of $155 (in the written copy of the ordinance I obtained) or $175 (as reported in the Atlanta Journal Constitution) beginning in 90 days (exact date not published, but the ordinance was passed on July 27, 2010).

Supposedly, this is to stress to owners of foreclosed properties (typically banks) the requirement to maintain and secure these vacant properties in order to “prevent blight, decreased property values and crime”. As desirable as these outcomes appear, this effort is extremely burdensome on Ms. Stokes’ fellow real estate agents, and will place real estate agents squarely in the line of fire from the public and code enforcement when banks won’t or don’t attend to their properties and will “stigmatize” otherwise normal properties. 

Here are the few details which are available as of today, August 9, 2010: 

  • “Beneficiaries”, meaning the lenders under notes secured by deeds of trust, will be required to record with DeKalb County the contact information including street address and telephone number for the person or persons directly responsible for the property. 
  • IF such person or persons are located Out of Area (more than 100 road/driving miles distance from the property), such person or persons must designate and retain a local individual or local property management company responsible for the security and maintenance of the property.  This is where the listing agent will often come into the situation.
  • This designation of a local person must state the contact information, including street address and phone number for the staff of any applicable property management or property preservation company responsible for the security, maintenance and marketing of the property. 
  • Such persons responsible for the property must be empowered to (1) comply with code enforcement orders issued by the County (read this as able to pay for maintenance and preservation work), (2) provide a trespass authorization upon request of local law enforcement authorities if the property is unlawfully occupied, (3) conduct weekly inspections of the property, (4) accept rental payment from tenants of the property if no management company is otherwise employed.

So far, I’m OK with this, but here comes the kicker: 

  • The property must contain a “posted sign with the name and 24-hour contact phone number of the local individual (read that as listing agent) or property management company responsible for the maintenance.  This sign must be posted on the front of the property so it is clearly visible from the street.“

It seems, therefore, that real estate agents who list REO properties in DeKalb County will also be required to post a sign on the front of each listing stating that he/she is the person responsible for the maintenance and security of the property. 

This posting of information which must be clearly visible from the street is essentially “labeling” the property as a foreclosure, even if it’s well maintained. Stigmatizing the property, if you will, and potentially branding the property as “a danger to the neighborhood”. Some are even arguing that this labeling violates the property owner’s rights. Although I understand that many neighborhoods have been decimated by the plunging sales prices of bank-owned properties (and bank-authorized short sales, to be perfectly honest), I hear from property owners that they don’t want to publicize that every third or fourth home is a foreclosure. If it has a sign posted on the front, easily visible from the street, isn’t that exactly what WILL happen? 

My opinion is that the registry is not a bad idea so that the county Code Enforcement people know who owns the property to cite for hazardous conditions and failure to maintain the property, but posting the information on the front of the house invites passers-by to
(1) notice that the house is vacant and available for mischief,
(2) count the number of “labeled” homes in the area and use that information to justify an even lower offer,
(3) harass the real estate agent named on the posted sign rather than call county Code Enforcement to report condition issues, and
(4) in the case of vacant foreclosures owned by local banks (those within 100 driving miles of the property), BYPASS the listing agent and attempt to contact the seller directly to negotiate a sale.

None of these are good. 

Failing to register the property or re-register it each January 1, if still vacant and bank-owned, can result in a $1,000 per day fine up to a maximum $100,000 fine per year. The fines and the registration fees will supposedly be used to fund more code enforcement officers.

Agents, if you have or will list REO properties in DeKalb County, please make your bank clients aware of this oncoming requirement. Connie Stokes, interviewed in the AJC, stated that registration can be done online, but no details have been released yet. I expect/hope we will read much more about this in the near future.

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11 Responses to “DeKalb County Approves Foreclosure Registry – Agents Be Prepared!”

  1. Ruth Lewis Says:

    I definitely don’t like the idea of the posting indicating foreclosure, being visable to the public, although hud and va foreclosed properties have always been labeled. With that being said, it would be nice to see data showing the frequency of vandalism reported by hud and/or va. What is good about this proposal is the acountability factor from either the banks or the agents. I think if we as agents want to list in this arena, we must be willing to either maintain ourselves (being reimbursed of course) or ensure that our clients (the banks) assume accountability for their assets and any penalties associated.

  2. Vanessa Calhoun Says:

    Although I understand the need for some sort of ordinance code enforcement, I do think that this is another situation in which overcorrection of a present problem has presented another different problem.

  3. Britt Argo Says:

    Thank you Ann. Valuable information. I’m sure if Dekalb is successful with this program– we may see other counties follow suite. Between Dekalb’s ordinance to change to low flow toilets and shower heads before selling– and now this- agents really have to keep the sellers informed. Thanks for update.

  4. Robert Broome Says:

    The Atlanta Board of REALTORS opposed this ordinance, and I submitted a comment letter to the Commission on ABR’s behalf. Although we are not pleased that the ordinance was adopted, it’s worth noting that our efforts led to several onerous provisions being removed from the final version. In addition to limiting the ordinance to foreclosed properties (an earlier draft included all properties in default), the final version omits the signage requirement you reference above. Unless the listing broker has a concurrent contract to provide property management services for the REO property, the listing broker should have no additional legal exposure under this law. To read the final version of the ordinance, as well as ABR’s comment letter, please go to http://bit.ly/aVkehU. If you have any questions, please feel free to contact me at 404-250-0051, ext. 146.

    • ann bone Says:

      Robert,

      I appreciate you providing the link to the FINAL version of this ordinance. When I Googled this last Friday, there was very little information available. In fact the only copy of the ordinace I was able to find was not the final version. DeKalb County is not known for its ability or willingness to give public notice of serious considerations like this. In fact, I had no idea of this ordinance even being proposed until after it was passed on 7/27/10.

      You are correct to point out to real estate licensees that the proper party to be identified on the registration will usually be the Asset Management Company hired by the bank-owner. Unless licensees also hold executed Property Management Agreements with the bank-owners, they are not charged with all the authority listed in the ordinance.

      Thank you so much for taking a stand on behalf of all REALTORS and succeeding in removing the worst part (in my opinion) of this ordinance – the signage on the property.

      And thank you for helping limit the ordinance to only properties ALREADY foreclosed upon (the original ordinance presented would have required this registration and labeling of even properties “posted” for foreclosure).

      Proud to be a REALTOR.

  5. Sandi Rodrick Says:

    Wow! What a great example of how an educational, informed blog works. Today’s blog began with a good article admitting some facts were still in research and then – BAM! [Hope I’m not stepping on Emeril’s copyright]- there’s a reply with the rest of the info! It was sort of a Metro Brokers “Paul Harvey – Rest of the Story [dating myself, I’m sure] experience. As I read the article this morning, the theme from Jaws kept playing in my head and I kept thinking about sharks- greedy financial sharks. Today’s market justifies some measue of control but as originally prepared it appeared the wrong parties were being put in the “hot seat”, but as it turns out the agent liability isn’t as eminent as first thought and that’s good for our side. So, as the day closes my theme music can morph into more a Flipper theme song and I can rest assured that fellow REALTORS are watching out for each other and that is how it should be.

  6. David K. Scott Says:

    A lot of the foreclosed properties in Dekalb County are eyesores. The banks are only interested in selling the properties, they have no interest in the maintenance of them. I think that it is way past time that they were held accountable.

  7. John Malek Says:

    What happens if it is a sign agents sign in the yard of said property for the actual listing agent in the REO department?

    • ann bone Says:

      John,

      Excelent question. From my conversation with Robert Broome, the Atlanta Board of REALTORS Gov’t Affairs coordinator, and from his comment posted above, it seems that the SIGN AGENT need NOT be the same person who is the registered responsible party. If we do have REO listings for which the bank/owner AND the asset management company are both over 100 driving miles away, then the registration would be handled by our REO department with contact info for an REO department staff member responsible for the property maintenance. The sign agent would NOT have this responsibility. If a sign agent were to receive any complaint calls about overgrown grass, broken windows, nefarious activities, etc., the caller should be referred to the REO department. Sign agents can concentrate on showing the property and meeting and assisting possible buyers!

  8. Reed Williams Says:

    It seems to me the county, with access to the court property recording system, will have access to who owns the property anyway (no point for the registration….another way to increase their fees I suppose).

    These code enforcement officers are deputized by the county’s marshall department and have authority to issue citations requiring you to go to court if the property in question is not kept up to the code requirements. I have dealt with these problems for years and believe me, they will cite whoever they can and I bet they will be citing agents. Also, the court is impowered to issue fines (and they all seem to be around $1000) and even jail time for noncompliance.

    My suggestion to fellow agents is if you are cited or contacted by a code enforcement officer, contact them right away and explain your position. They like to see an immediate response….don’t put off contacting them. Also, send them the owner’s name and address and explain you have no legal authority to maintain the property. Hopefully, that will help you avoid going to court and explaining your agency relationship to the seller.

  9. Christina Poodt Says:

    Thanks Ann for giving us fair warning, and thanks Robert for clarifying the situation.
    However, I do concur with Reed about the code enforcement officers who will cite any one they can, and they do call the sign agent if the property is vacant, and more than likely looking like it in whatever foreclosure situation the home is in, i.e. pre or post foreclosure. Definitely call the code officers right back and you had better not get agressive with them either when you do. They generally treat you fairly if you explain the situation, and they usually give you a couple of days to “cure the situation.”
    I also think REO banks should take responsibility for the maintenance of the property once they have foreclosed on the home.
    Preforeclosure is the harder problem for the agent. You do not have a bank that you can turn to for funds or maintenance folk to take care of, or pay for, the situation with the property. This is a particular problem with short sales as the home owner is upside down already in their property and can not sell it for what they owe. Also, If they are experiencing financial difficulties, or illness, or loss of a job, they are really in a bad way financially. (It is particularly sad when the home owner was trying to solve the situation with a short sale, and the bank did not work with them or their agent enough, and they still foreclosed on them). This particularly happens when the bank has taken an inordinate amount of time to approve the shortsale. Often it is the bank that has caused the property to deteriorate further BECAUSE THEY TAKE SO LONG with the process TO MAKE UP THEIR MINDS! (ask me how I know this, having done short sales for almost ten years!)
    Meanwhile, the home owner has given up hope and no longer maintains the property, or cannot afford to, and that is when the agent is under more fire from code enforcers. Then, by the time they do approve the short sale, the first buyer has walked, and now you present the bank with a second or even third buyer, and by then the property really can look bad, and you start getting calls from neighbors who threaten to call the code enforcers on your listing.
    I advise all agents(including myself) to think of this as a challenge you face when taking on short sales. If you have several listings, these maintenance costs start adding up. I really feel this is a good reason for all short sale agents to get a retainer fee up front, if possible , from the sellers in your listing agreement while they are usually still in their homes. It seems that, once they leave, it becomes very hard to get them to maintain their properties. And sadly, they have so many folks and creditors after them, they do not take another threatening code enforcement fine as seriously as they should. At least, with a retainer fee, you have the funds to take care of the problem. What is everyone’s opinion regarding that?
    I have not charged this retainer fee yet, but I am seriously thinking of it. Of course, my dilemma is telling the struggling home owner that this is a necessary action on the part of us as agents. I have to remind myself that if they were filing for bankrupscy, they would have to pay a retainer fee to the attorney who will not take on their case if they do not give said attorney a retainer. As Reed pointed out, the fines that agents can face could be daunting so “prevention is better than cure!” My team and I have paid for grass to be cut on several occasions, and we try to get payment back for it, but it is not yet bank owned and the foreclosing banks will not take responsibility for any maintenance to the homes. They blame this fact also on “liability issues. It is thus left up to the agents.

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