Oregon Enacts Provisions Regarding Negligence of Foreclosed Residential Properties
by: Paul McSheffrey
The Oregon Legislature recently enacted provisions regarding negligence of foreclosed residential properties with Enrolled House Bill 2662. An owner that forecloses a trust deed or receives a judgment foreclosing a lien on the property must now meet certain maintenance and monitoring standards during any period that the foreclosed property is vacant. The Bill was passed by the Oregon House on April 25, 2013, and by the Senate on May 30, 2013.
Under Section 1. (2), the owner of a foreclosed residential property is prohibited from neglecting such property during a period where the property is vacant. Neglect is defined in Section 1. (1)(b) as failure to maintain the buildings and grounds such as to allow growth that diminishes adjacent properties, allowing trespassers to remain on the property, or allowing other conditions that cause a public nuisance. Additionally, neglect includes failure to monitor the condition of the property once every thirty days in order to prevent the conditions described above.
The owner of a foreclosed residential property must provide contact information to the neighborhood association where the property exists as well as with the local government. This contact information must include a telephone number and be placed on a conspicuous notice located on the vacant foreclosed property. This must remain on the property to allow a person to report conditions of neglect.
Where the local government determines that there is a condition of neglect, a mailed notice must be provided to the owner allowing for at least thirty days in order to remedy the condition. If the government determines that the condition would cause a threat to public health or safety, the government may require that the problem be remedied in a time shorter than thirty days. If the government imposes a shorter time frame to remedy the conditions, then the owner must be provided an opportunity to contest the finding at a hearing.
If the owner does not remedy the condition of neglect within the time frame described above, the local government may remedy the condition and require the owner to reimburse the government for reasonable costs of doing so. The local government has a lien on the property for the sum of the unreimbursed costs. This lien has priority over all other liens except for tax liens where it has equal priority.
This Act declares an emergency and therefore is effective immediately on the date of its passage.
About the Author:
Paul McSheffrey, Esq. is Associate Counsel and Compliance Specialist at Bankers Advisory, Inc. He is a graduate of Northeastern University and earned his Juris Doctor at the New England School of Law. Paul is admitted to the Bar in Massachusetts and New York. He can be reached at paul@bankersadvisory.com
Paul McSheffrey, JD, is a senior regulatory compliance consultant with CLA. He is a graduate of Northeastern University and earned his juris doctor at the New England School of Law. He is admitted to the Bar in both Massachusetts and New York.
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