STEPS IN A DISTRICT COURT VACANT HOUSE RECEIVERSHIP CASE

Initial request: The community organization, our client, identifies vacant houses it wants renovated as part of a community development plan.

Identification of potential developer of the properties: Either the community or the Community Law Center identifies a developer interested in developing the properties. The developer should prepare a simple work write up with cost estimates of the work to be done on each property. This will be the best estimate under the circumstances; it can be changed once we have entry into the property. The Developer pays $200 for the title work needed to file a complaint. We need to identify the Receiver; normally this will be Save A Neighborhood, Inc. which was created by the Law Center for this purpose.

H.C.D. designation: When the above items are completed, we ask the community and the developer to sign agreements and request HCD to designate the community organization as the petitioner able to file suit in district court seeking to have a receiver appointed for the property. HCD will send a designation agreement which the community organization will also need to sign. We also request information on the registered agent for the property.

Receipt of designation: The Law Center receives the designation from HCD authorizing it to proceed. Typically, within a week we send the required 10 day notice to the owner. Prior to requesting a designation, we have a developer able to obtain identified financing. Before we file the petition in district court, we must do a judgments check on the owner, and update the property information in land records.

Filing the case: After the 10 day notice to the owner, we typically file the case in district court within a month, requesting a hearing as to why a receiver should not be appointed. In terms of notice to interested parties, we follow requirements similar to a mortgage foreclosure or tax sale. If we obtain personal service, the hearing is generally within thirty days. If we must have alternative service, the time lapse can be a few months.

Disposition: Typically, about 5 to 10 percent of the owners call before the hearing to discuss arrangements for transferring or repairing the property. Our experience is that at the hearing a receiver is appointed or the owner agrees to a transfer the property or renovate the property. Typically, if the owner is located, we expect he or she will agree to voluntarily transfer the property for fair market value, as is. If the owner is going to renovate the property, we prefer to have a court order to that effect. If the owner is not located or is uncooperative, the property will have to be sold by the receiver in the same manner as a mortgage foreclosure sale. Any net proceeds from that sale, after receiver's costs and other liens on the property, will go to the former owner.

Receiver's sale: This is similar to a foreclosure sale; however, as the purpose of the law is to ensure that properties are brought up to code and occupied, the receiver requires potential bidders at the auction to be pre-qualified and able to establish that they have the capacity to renovate the property. The sale must be advertised for three weeks. The sale must be ratified by the court; this process takes two to three months. Upon ratification by the court, the former owner's and lienholder's rights are terminated.

Information Courtesy of Community Law Center, Inc.- 2500 Maryland Avenue
Baltimore, Maryland 21218 - 410/ 366 - 0922 | fax 366 - 7763

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