A new late fee on vacant property registration fees is aimed at owners trying to get around the annual payment.
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City Council unanimously approved the ordinance (O-2-21) following a public hearing at its Feb. 8 meeting, which featured no questions or comments from the public or council members. The measure was introduced at the Jan. 11 meeting.
The amendment approved last week establishes a late fee of 10% if a vacant property is not registered or the registration fee is not paid within 30 days that it’s due.
The initial registration fee for vacant residential properties is $500, increasing to $1,000 when the registration is renewed, $3,000 for the third year, and $5,000 in each subsequent year. Revenue from the vacant/foreclosure registry has typically been at last $300,000 since it was created in 2014.
“The city previously deemed it to be in the public interest of the city to establish a mechanism to identify and track vacant and abandoned properties within the city’s borders, to establish standards for the maintenance of those properties and to enforce those standards of maintenance,” according to the ordinance. “It is also in the public interest for the city to now impose a late fee in conjunction with the normal registration fees for vacant properties that are associated with the city’s ordinance for vacant and abandoned structures in light of the disproportionate costs imposed on the city by the mere presence of these structures and the city’s repeated efforts to bring them into compliance.”
The idea is not to make money but to get properties occupied, according to City Administrator Robert Landolfi. The new measure “gives us the greater ability to collect it, if people decided they’re not going to pay it,” he said during an interview last week.
“What was happening was, we’d make them register and pay that fee. If they didn’t pay it, the city was not able to lien the property,” Landolfi said. “But what we can do is pass it on to subsequent title holders of the property. We then could get a judgment against them, not a tax lien. It could theoretically die with the first person the property was registered to. If we did not enforce it at closing, then it wasn’t collectable,” he said.
Some property owners were getting around the fees by transferring the property to a newly created Limited Liability Company (LLC) with a slightly different name, according to Landolfi. “The phenomenon got more prevalent recently; people figured it out,” he said.
If a vacant property has a buy willing to invest in it, “for us to hold up that transaction at closing, it doesn’t make sense,” Landolfi said.
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