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Dealing with Distressed Properties

Recently the economy has seen an uptick and property values are restoring, as well as townships’ tax basis.  Prior to this resurgence, however, the 2007-2009 economic collapse caused substantial foreclosure rates, devastating some communities and leaving unoccupied vacant structures.  In other communities, a few vacant properties with overgrown lawns and an accumulation of trash were the most significant issues. In the past 5 years, townships continue to struggle with dealing with distressed properties, whether vacant and unmaintained or occupied and ignored.  This E-letter explains several options that address these concerns!

Are Distressed Properties a Problem in Your Township?

The first step for any township dealing with distressed properties is to assess the distressed properties and determine what the issues are. It could be dangerous buildings, tall grass, or junk. There are options to address each. So, the next step is to focus on current ordinances and available resources that the township has used in the past to deal with these distressed properties.  Are they sufficient? Do the current ordinances address the issue, but are not being used to their maximum potential?  What issues have not been resolved with the township’s current ordinances?  Does the township need different options (as discussed further below) to create a different process for dealing with distressed properties?

What Regulatory Options for Dealing with Distressed Properties are Available?

Many townships already have zoning ordinances adopted pursuant to the Michigan Zoning and Enabling Act.  The Zoning Act provides the township authority to regulate land uses and buildings by districts, locations, and areas.  A zoning ordinance, however, only looks at the use of a property at a snapshot in time—the time when the use commences on the property.  Once the zoning ordinance is satisfied, the zoning ordinance provides minimal protection regarding future activity on the property (unless a change in use occurs).  Any subsequent changes to the zoning ordinance simply means that the property now becomes a nonconforming use.  This is why zoning ordinances are important for many townships, but don’t assist with dealing with distressed properties. Townships need to use a different regulating scheme to deal with distressed properties, which include the following: (1) nuisance/blight ordinance, (2) grass/noxious weeds ordinance, (3) dangerous buildings ordinance, and (4) the property maintenance code.

How Does a Nuisance/Blight Ordinance Help?

Properties that are distressed are often caused by abandonment of the property or a general unwillingness to maintain the property.  This can manifest many issues that can be addressed by a general nuisance/blight ordinance. A township is authorized to adopt such an ordinance under MCL 41.181, “regulating the public health, safety, and general welfare of persons and property” of the township. 

Nuisance/blight ordinances can address the following: abandoned structures; dilapidated structures; abandoned or unused appliances; tall grass and weeds; accumulation of debris, garbage and junk; and unlicensed, abandoned, or junk vehicles that are stored outside. Along with resolving these issues directly related to distressed property, the same ordinance can also address concerns not directly related to dealing with distressed properties such as noise, pollution, and improper keeping of animals.

Violations of the ordinance can be prosecuted as a misdemeanor, a civil infraction, or circuit court action. In pursuing violations, often compliance is more important than collecting fines or requesting that a property owner serve jail time.

What if the Grass Just Doesn’t Get Cut?

All too often the first sign of a distressed property is when tall grass or weeds are in the front yard.  The Noxious Weeds Act addresses this concern by allowing a township to adopt an ordinance appointing a “commissioner of noxious weeds,” who may then ensure weeds are controlled in the township.  The Act has been around for over 70 years, but many communities are still not aware of its strengths when addressing distressed properties.

Certain weeds that are noxious, including poison ivy, poison sumac, mustards, rag weed, and any “other plant” which in the opinion of the township “is regarded as a common nuisance” (i.e., tall grass or weeds), can be destroyed or removed (i.e., cut). The ordinance can prohibit the growth of such weeds and require that the weeds be destroyed and eradicated by the landowner, occupant or person in possession of the distressed property.  In addition to the specific weeds identified in the Act, most ordinances should also include language prohibiting any noxious weed, grass, or other rank vegetation that exceeds a certain height.

If a violation exists and the property owner does not remedy the violation (after proper notice), a township may enter the property and mow and cut as necessary to bring the distressed property into compliance.  The township may then collect the expenses incurred, plus any administrative expenses, from the landowner.  The total amount shall also be a lien against the property collected in the manner as provided by the Noxious Weeds Act (collection as provided for construction liens, tax liens, or as provided by ordinance). This not only provides a means to cure tall grass issues where the property has been abandoned, but also provides an additional measure to help a township collect the expenses of enforcing the ordinance by allowing a lien against the property.

What if the Distressed Property Just Needs to be Maintained?

Townships can elect to enforce the State Construction Code, Public Act 230 of 1972, locally, as opposed to relying on the county or State.  The State Construction Code consists of the International Residential Code, the International Building Code, the International Mechanical Code, the International Plumbing Code published by the International Code Council, the National Electrical Code published by the National Fire Prevention Association, and the Michigan Uniform Energy Code. The State Construction Code can address certain distressed issues on a property, but its adoption requires that a township also enforce and administer it in the local jurisdiction for all building permit requests. Many townships are not interested in assuming this additional responsibility of issuing building permits and conducting inspections. 

While the State Construction Code is useful, townships unwilling to assume the additional responsibility should consider property maintenance codes. Property maintenance codes address existing structures and the continued maintenance of those structures.  These codes can be adopted and enforced by a township without the township becoming responsible for enforcing the State Construction Code.  The most widely accepted maintenance code is the International Property Maintenance Code (IPMC).  A township, however, is not prohibited from adopting its own maintenance code or a different national or recognized code.

Generally speaking, the IPMC provides standards for the maintenance of property and structures; how to provide notice to responsible properties; prohibiting unfit property to be occupied; authorizing emergency action; and providing for violations to be enforceable as a misdemeanor or civil infraction. The IPMC creates a department of property maintenance inspection, overseen by a “code official.”  IPMC 103.1. The code official is responsible for conducting property inspections and issuing notices and orders required under the IPMC.  IPMC 104.3, 104.6.

Pursuant to the IPMC provisions, the code official that identifies a building as unsafe may order repairs be undertaken.The official may also  order its demolition if in the official's judgment, the building is so dilapidated or has become so out of repair as to be dangerous, unsafe, unsanitary or otherwise unfit for human habitation or occupancy, and such that it is unreasonable to repair the structure. IPMC 110.1. The township can enforce violations of the IPMC through a civil infraction citation, seeking injunctive relief in district court to cure distressed properties.

What if the Distressed Property is Now Dangerous?

Michigan Housing Law prohibits maintaining a “dangerous building.” More importantly, the state law also permits a township to adopt its own ordinance to enforce the provisions of MCL 125.538, et seq., locally. The procedure the township must follow when it seeks to require a “dangerous building” to be repaired or demolished is required by state law.  The meaning of “dangerous building” is specifically defined in the state law to include:

  • A building not conforming to approved fire code of the township.
  • A building partially damaged by fire, wind, flood, deterioration, neglect, abandonment, vandalism, or other cause so that structural strength or stability is appreciably less than before damage and does not meet minimum requirements of the building code.
  • A building (or portion) is likely to fall or collapse and injure persons or damage property.
  • A building is manifestly unsafe for the purpose for which it is used, including unsanitary or unfit conditions for human habitation; is in a condition that a health officer determines is likely to cause sickness; or is likely to injure the health, safety, or general welfare of people living in dwelling.

The “dangerous buildings” process requires the township to provide a notice of the dangerous condition to the property owner.  Notice is given to the owner, agent or lessee of the registered properties.  MCL 125.540(2). Notice provides an opportunity for a hearing before a hearing officer.  The hearing officer cannot be an employee of the township and must have expertise in construction trades (i.e., residential builder, architect, or engineer).  The hearing officer will issue a decision regarding whether the building is a dangerous building, and if so, to what extent it must be maintained, repaired or demolished.

The owner, agent or lessee of the property has an opportunity for an additional hearing that must occur before the township board.  During this hearing, the township board must approve, disapprove, or modify the order.  The owner typically has 60 days after the date of hearing to comply with the order.  The owner, agent, or lessee has a right to appeal the township board’s decision to a circuit court.

If the property is not demolished as ordered by the township, the township may demolish the property and bring a judicial action against the owner for the full cost of collection or follow certain notice procedures in the ordinance to assess a lien against the property and collect the lien as tax liens would be collected.

By: Chris Patterson

Click here for a PDF version of this publication.

Fahey Schultz Burzych Rhodes PLC, Your Township Attorneys, is a Michigan law firm specializing in the representation of Michigan townships. Our lawyers have more than 150 years of experience in township law, and have represented more than 150 townships across the state of Michigan. This publication is intended for our clients and friends. This communication highlights specific areas of law, and is not legal advice. The reader should consult an attorney to determine how the information applies to any specific situation.

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