State Authorizes Local Governments to Impose $1,000 Fines for Failure to Maintain Property

Due to recent legislation, legal owners of vacant residential property purchased at a foreclosure sale, or acquired through foreclosure under a mortgage or deed of trust, must maintain the residential property or face civil fines of up to $1,000 a day.

An owner is “failing to maintain” the property if, for example, the owner permits excessive foliage growth that diminishes the value of the surrounding properties, fails to take steps towards preventing trespassers or squatters from accessing the property, or fails to prevent mosquito larvae from growing in standing water, or other conditions constituting a public nuisance.

Prior to issuing a fine pursuant to Civil Code Section 2929.3, the governmental entity must provide the legal owner: 1) notice of the violation; 2) notice of the conditions establishing the violation; and 3) notice of the governmental entity’s intent to issue a fine if the legal owner does not take steps towards remedying the violation within fourteen days, and completely remedy the violation in no less than thirty days. The governmental entity shall mail notice to the legal owner at the address listed in the deed, or other instrument conveying title, for the purpose of receiving tax statements, and if no such address is listed, to the return address listed on the deed or other instrument. If a specific condition on the property threatens the public health or safety, the governmental entity may establish a compliance period shorter than thirty days, and may impose fines at the expiration of the compliance period, as long as the notice to the legal owner sets forth the shorter compliance period.

If the legal owner fails to remedy the violation within thirty days, or such other period provided by the governmental entity, the legal owner may be assessed a civil fine of up to $1,000 for each day the property is not maintained. In determining the amount of the fine, the governmental entity shall consider any timely or good faith efforts by the legal owner to remedy the violation. The governmental entity must ensure procedures exist, which allow the legal owner a hearing and opportunity to contest any fine imposed. The revenue from collecting the fines shall go towards local nuisance abatement programs.

This Section provides governmental entitles with an alternative tool for enforcing minimum standards on vacant properties, and does not preempt, for example, local ordinances regulating vacant buildings or requiring registration of vacant buildings. While the governmental entity cannot collect fines under both this Section and a local ordinance governing the same subject matter, vacant residential property fined under this Section may still be subject to enforcement procedures under local code provisions relating to different conditions on the property. In addition, the vacant residential property may have separate compliance times with regard to the other violations.

This Section will remain in effect until January 1, 2013, unless extended or deleted by later enacted legislation. In addition to the above Section related to governmental entities, SB1137 also enacted several provisions related to residential mortgage loans, and procedures applicable to mortgage companies, homeowners and tenants.