Chicago Considers Amending Vacant Property Ordinance that Defines Banks as Owners
This summer, the Chicago City Council passed a vacant property ordinance that established certain property maintenance obligations on the owners of vacant property. The ordinance became effective in September and defines any entity that holds the mortgage on a property as a property owner. Under the ordinance, a lending institution would become responsible for maintaining properties on which it holds mortgages even before foreclosure.
Banks had raised questions about the legality of the vacant property ordinance, claiming it was unconstitutional because it was overly broad and a violation of the equal protection rights of lenders who may be listed as mortgagee on the property, but not the official owners of title. A number of banks had threatened to sue the City over the ordinance.
This week, a revised ordinance was introduced before a City Council committee. The new proposal is a compromise between City officials and banks and would require banks to start maintaining vacant properties within 60 days of default on a mortgage. The required maintenance would include securing or boarding up of buildings, mowing the grass, and shoveling the snow, among various other maintenance obligations. Signs would also have to be posted with contact information for those responsible for the properties. Violations could lead to fines of up to $1,000 a day.
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