Real Estate Agents Being Held Liable For The Condition Of Foreclosures

From the “I saw this coming a mile away department”…it has finally happened. Frustrated municpalities are beginning to chase anyone and everyone associated with a run down, neglected foreclosure that is adding to blight in their communities.

It’s bad enough that there are so many real estate agents trying to overcome the effects of a perceived down market, now comes the City of Atlanta with citations in hand and armed with powers of arrest and the imposition of fines to make matters worse.

Atlanta, frustrated and overrun with foreclosed bank owned properties that have been neglected have begun to enforce code violations as forcefully as possible.

City code inspectors have begun issuing citations on listing agents, holding them liable for these derelict properties and the multitude of code violations that have been imposed on their listings. Although the agent is merely the listing agent for a lending institution that is often located out of state, Atlanta has found the validation it needed to pursue listing agents by a cursory review of the City’s municpal ordinances.

Several agents with similar properties have been hauled into court over the past few weeks - yet another offshoot of a foreclosure crisis that’s spread across the region but hit certain intown neighborhoods especially hard.

Agents, already under pressure from declining sales, say the city’s unfairly picking on them because they are easy targets. The city, they say, should be applauding their efforts to get foreclosed properties into the hands of new owners who will properly care for them.

City officials say they just want some of the blight cleaned up.

Rick Hale, a Midtown agent who represents lenders with properties in some of Atlanta’s toughest neighborhoods, said he’d never heard of agents being ticketed until he got cited in May.

Hefty fines could scare some agents away from representing run-down housing and drive agents out of the business.

“Realtors are hurting right now,” said Hale. “This is not cool. They think we are just going to get reimbursed. But it doesn’t work that way. They are going to ruin some careers over this.”

The Atlanta Board of Realtors has set already organized a meeting between some agents and the city to soothe some of the tensions.

Robert Broome, governmental affairs director for the Atlanta Board of Realtors, said he understands Atlanta’s efforts to get run-down properties in shape. However, he says he’s not for slapping fines on every agent who lists properties needing rehabilitation.

“The situation in several neighborhoods in Atlanta is tragic,” Broome said. “We are as distressed as anyone about the conditions. I am afraid there may be a little bit of going after the low-hanging fruit - if there’s a sign out there, the agent is an easy target.”

Hale’s been cited for a building he listed for sale at 950 Bolton Road in northwest Atlanta, part of a former apartment complex now abandoned and vacant.

Hale said when he got the citations - eight of them, one for each unit in the building - he thought it was a mistake or a joke. He said he had the building professionally boarded only to see miscreants break in over and over.

Hale said he was advised to plead no contest because that would quickly resolve the dispute and let him get back to work.

He was shocked when the city court socked him with $3,311 in fines last month.

“This is a huge stretch and an injustice,” Hale said.

With the buildings owned by several different lenders, an outstanding water bill north of $150,000 and a rough-and-tumble community around the complex, Hale said he couldn’t even get an offer with a $12,500 asking price. He has since lost the listing even though he paid the fine.

Hale’s also been ticketed for a building at 930 Garibaldi St. and faces a court date in August. Hale intends to fight that one.

Buildings like the ones on Garibaldi and Bolton are scattered around the city but heavily concentrated in communities like Riverside, Vine City, Pittsburgh and English Avenue.

Many sit vacant and dilapidated for months as lenders go through the process of taking them back through foreclosure and then putting them on the market.

City officials said they could not estimate how many agents have been cited. They noted the city code gives officers leeway to cite anyone from the owner to someone who has the ability to control or maintain the property.

Frequently the owners of some of the worst properties are out-of-state financial institutions, which can make it difficult to track them down or get them into city court. Real estate agents, though, are local and have their names and phone numbers right out front.

“They are certainly getting a little bit desperate,” said Wayne Flanagan, another agent who has been cited and even threatened with arrest. “One [code enforcement] agent told me, ‘We don’t know how to get hold of out-of-state asset managers. We know how to get hold of you.’ The only reason they are fining us is because we are available.”

City officials say that’s not true.

“I want to make clear we are not out there citing just listing agents,” said Tenee Hawkins, spokeswoman for the code enforcement department. “It is our understanding they are the agents for the owner. They have some agreement to maintain the properties. We didn’t just go after the agents because we can’t find anyone else.”

Hawkins said the department is doing its best to ensure someone cleans up and secures some of the worst properties in the city. She noted there are hundreds of homes and other buildings in distress in various neighborhoods and lots of pressure on the department for action.

“The city is desperate for all of us to take whatever steps we need to resolve this,” Hawkins said.

Citations like the ones issued to Hale, Flanagan and others may come down to the language in their listing agreements.

Some contracts to sell for out-of-state lenders can obligate an agent to some duties of keeping the property clean and secured even if that may be nearly impossible. A standard listing agreement doesn’t have that language, agents said.

Code enforcement officers can’t know which contracts do without first citing agents and taking them to court.

That might make some rethink even trying to sell foreclosure properties.

“What I am mystified by is in some of these areas is why code enforcement is there and not Atlanta police,” said Gary Tice, another agent who has been cited. “This is not a code enforcement problem.”

source: Atlanta Journal Constitution

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About the Author:

Robin Sing-Cunningham, is a real estate agent serving Fort Lauderdale and Broward County, Florida. Robin specializes in distressed and bank owned properties in the Fort Lauderdale real estate area.

Robin began her blog recently after over seven years in the real estate business. She brings a unique perspective to her writing as she has worked on the building and development side of the business and has worked extensively with investors on the foreclosure side of the business.

Robin is an avid sport fishing enthusiast and when not selling real estate can usually be found off the coast of Fort Lauderdale looking for that next big game fish.

She's also the wife of one of the hosts of the #1 real estate related talk radio show in America Real Estate Radio USA and occasionally makes appearances on the show to talk about Fort Lauderdale real estate and to lend her perspective on the industry.

You can contact Robin at 954-709-7461 or visit the Fort Lauderdale Real Estate Blog. You can also email Robin at robins@robinashley.com

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