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COUNCIL UNITED ON BARRING SALES OF FORECLOSURES TO BAD LANDLORDS

All 13 Common Council members are behind a plan to prevent the sale of foreclosed properties to bad landlords.

The plan would involve checking would-be purchasers against lists of owners with housing code violations.

Lovejoy Council Member Richard Fontana hopes to stop speculators who acquire properties cheaply for resale or rent. If things go sour, they let the property go to tax sale again.

"Every year in October we have an auction of 800 or more properties," said Fontana, adding that a property speculator is not a neighbor he would want.

"These aren't people coming in looking for first homes," he said.

Fontana and his co-sponsor, Masten Council Member Byron W. Brown, propose checking prospective buyers before letting them make a purchase.

"If he has no code violations and is not in arrears on any city tax or fee, he is a responsible landlord," said Fontana.

The city can foreclose after one year, and the office of Ellicott Council Member Barbara A. Miller-Williams recently alerted 600 owners of properties within the district that they are in danger of foreclosure because of back taxes.

"The same names (of owners) kept showing up," said Miller-Williams, who asked to join Fontana and Brown as a sponsor.

Every other Council member immediately signed on, to Fontana's satisfaction. "There are going to be a lot of unhappy slumlords out there," he said.

Senior Tax Administrator Bruna Michaux, who plays a key role in the October sales, said the existing law requiring prospective buyers to clear up any bills they owe the city short-circuited 71 bidders at the last auction.

The city Collections Division sent notices asking them to pay a collective $210,667 in back taxes, user fees, sewer rent, water bills or fees for demolitions carried out by the city on their other properties.

"They must pay all their debts," said Michaux.

Because a successful bidder must put 20 percent down to cover his offer, the bidder who does not pay up stands to lose his down payment.

"We take the 20 percent and apply it to what they owe on other properties," said Michaux.

To date, 45 bidders have paid $113,876 in debt to the city and have gone ahead with their purchases. Three of the remaining 26 have paid $9,413 but have not cleared what they owe. The 26 owe $96,791 and will not be allowed to buy the properties for which they were high bidders. Their down payments at the time of the auction totaled $44,560.

Sometime soon, Michaux will ask the Law Department to go to court to declare the down payments forfeit.

One woman who made down payments of $3,710 on eight properties still has not paid the $1,478 she owes the city in tax on the place where she lives, garbage user fees and parking tickets. So $1,478 of her down payments will go to cover her debt, officials said.

Michaux suggests that it may be possible simply to amend the current law to include clearing of code violations along with paying any money owed the city.

That way a landlord with outstanding code violations would have to correct them. The bidder would have to fix the leaking roof or broken windows in his or her current city properties before taking title to foreclosed buildings.

Joseph Machiejewski, deputy county budget commissioner for real property tax, conducts county property sales in June. The county does not foreclose until three years of county tax is owed. Last year, 900 of 1,400 properties on the block were within the city. But the city took title to many where it wanted control over redevelopment.

Machiejewski, while he commends the Council effort, said devious land speculators can cheat almost any system.

Michaux agrees that some are sophisticated at cheating the system. "But I'm not saying let's not do it," she said. "Whatever will help, I'm for it."

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