Land Bank Playbook: Interaction with Cities

Land Bank Playbook Section X

A. Introduction

There are many levels at which a LRC can interact with municipalities. It can be on a case-by-case basis, an ongoing acquisition/disposition arrangement, code enforcement agreement, or a simple “handshake” with particular city officials. Although a formal agreement or other written protocol is desirable, it not necessary.

B. Memoranda of Understandings

Memoranda of Understanding (“MOU”) serve two essential purposes. First, they serve as a preemptory type of document which assures municipalities that the LRC does not pre-empt their planning, acquisition rights and general ability to acquire properties from tax foreclosure prior to the LRC. The boilerplate part of the document basically restates the statutory rights of cities. For example, as between a city land bank and a LRC seeking to acquire a property through tax foreclosure, a city’s affidavit will always pre-empt that of the LRC. Likewise, if a LRC secures a property from sources other than tax foreclosure, the city has the absolute right within thirty (30) days after the recording of such acquisition to request and receive such properties from the LRC on the same terms and conditions as the LRC acquired the property. Beyond that, the MOU has attachments designed to be filled out by the municipality and the LRC dealing with particular acquisition, holding, disposition, and demolition strategies.

C. City, Water and Nuisance Assessments

a. Municipal Lien Enforcements Rights

When a land bank acquires a property from tax foreclosure or otherwise, it is important to determine whether the property is encumbered with municipal nuisance or water liens. If the property has been vacant and abandoned for some time, the municipality often cuts the lawn, boards the property or demolishes the structure. R.C. 715.26 authorizes municipalities to pursue a money claim for the amount of these expenses. Additionally, it can “certify” these charges to the tax duplicate.

Prior to the Act, the only way these charges could be foreclosed upon was by pursuing a money judgment, and then filing a foreclosure like any other judgment creditor. Conversely, a municipality could certify these charges to the tax duplicate, in which case the municipality would have to wait for the County Prosecutor to pursue a tax foreclosure case. R.C. 715.261 now allows municipalities to assert their own separate lien for these charges from the date they were incurred and to pursue separate foreclosure proceedings in the city’s own name.

b. Administrative “Holds” for Nuisance Liens

The bulk of these nuisance abatement costs either find their way to the tax duplicate, or in the case of water liens, result in an administrative hold on any disposition, utility reconnection or demolition of a property. When a LRC acquires a property, tries to sell it or pursue demolition/rehab, the LRC must find practical ways and protocols with member municipalities to settle these administrative holds. Such items would be particularly appropriate for an MOU. For example, if a LRC has a blighted property which it seeks to demolish, a permit is often delayed by the water department even though the LRC never incurred the water bill. There should be an MOU or some other written protocol between the municipality’s water department and the LRC authorizing the demolition. Even though the water bill or nuisance charge was not incurred by the LRC, lower level administrative officials are not often equipped to make such judgments or such distinctions in real time. To avoid delays in the demolition permitting process, the transfer of property to a responsible rehabber or the reconnection of water service for a rehabilitation, these matters should be addressed in a MOU or some similar protocol.

It is the position of this publication that uncertified charges (water bills, demolition fees, grass cutting fees, board-up fees) are not the civil obligations of any owner in the chain of title subsequent to when the charges were incurred. However, where a municipality certifies these charges to the tax duplicate then they become in-rem in the sense that they “follow” the property from owner to owner. So that the municipality and the LRC are not acting at cross purposes, there should be a mechanism by which a city can withdraw these liens and charges so that the LRC can reclaim, demolish or improve such a property without having to pay the charges.

D. R.C. 715.261 Municipal Authority/LRC Agency Agreements

R.C. 715.261 allows a LRC to serve as an “agent” of a municipality for select code enforcement and nuisance abatement activities. This new agency arrangement can serve to authorize the LRC to do demolition specifications, environmental surveys, demolitions, board-ups, field services and limited code enforcement inspections for a fee as the “agent” of the municipality. In the case of a demolition, for example, cities can officially “certify” a property to be a nuisance in order to gain authority to enter upon the property to abate the nuisance. They can then enter into an “agency” agreement with a LRC for the LRC to do everything from inspecting the property, ordering the cut-off of utilities, doing asbestos-related survey and abatement as well as the demolition itself.

One unique agency activity, in addition to those listed above, in which the Cuyahoga County LRC is involved, is the preparation of the “land affidavit” utilized by the Prosecutor as one of the predicates to a tax foreclosure case. See: Section V, supra. The Cuyahoga County LRC performs this function directly on behalf of and in the name of the City of Cleveland.

Section X Sample Forms

  • Form X-1 – Memorandum of Understanding with Cities
  • Form X-2 – Demolition Agency Agreement with Cities
  • Form X-3 – Agency Agreement for Cleveland Land Affidavit Management
  • Form X-4 – Water Lien Protocol with City