When a homeowner loses a property to foreclosure, most would expect that at least the loss would lead to the removal of a burden from their back. After all, when the bank takes back the property; one expects the property to become the bank’s responsibility. However, in one Maryland county, owners of foreclosed, abandoned properties could still be charged for maintenance if the General Assembly gets its way[1]. While lenders could be assessed the actual fees, if the foreclosure is incomplete homeowners could still be on the line.

The County Council in Prince George’s County wants to charge owners of “abandoned, foreclosed, residential property” $75 in registration fees each year. Those fees are to be placed in a fund that is used to maintain all neglected homes in the area. This is necessary, say proponents of the bill, because neglected homes are dragging down property values all over the county. While the county does not currently plan to assess these fees to the debtors who lost the homes to foreclosure, with the current sluggish state of the foreclosure process, it could get complicated quickly when it comes to determining exactly who pays since the same legislation would actually make it a misdemeanor for owners to not keep property up to “neighborhood standards,” meaning “free from dead vegetation and discarded items in the yard.”

County Councilman Will Campos believes that the proposed legislation is a good solution to neglected properties, which have plagued the county. “We can actually be proactive in sending people to check out empty properties,” he explained, adding that if the properties were falling into disrepair, the council itself could “actually pay for a contractor or ourselves to go out there and do this [work].”

Prince George’s County currently has one foreclosure filing for every 457 households – the highest rate in Maryland[2]. This legislation seems to make a lot of sense, but it also seems to threaten homeowners in foreclosure and leaves room for corruption if council members can “pay themselves” out of the fund as Campos suggests. Do you think that this is a good solution to the blight problem in the area?

Thank you for reading the Bryan Ellis Real Estate Letter.

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[1] http://washingtonexaminer.com/local/maryland/2011/02/pg-council-wants-charge-fee-foreclosure-cleanups

[2] http://www.realtytrac.com/states/maryland/prince-georges-county.html