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Fire-damaged home “abandoned” despite owner’s intentions to contrary

November 12th, 2009

by Gary Taylor

Council Bluffs v. Harder
(Iowa Court of Appeals, November 12, 2009)

Fire-damaged house deemed “abandoned” under Iowa Code, despite owner’s continued payment of mortgage, taxes and insurance.

Anita Harder owned a house in Council Bluffs that sustained serious fire damage in September 2004.  It has not been inhabited since.  She moved out and her insurer initially paid some living expenses, but has not paid anything else. She has continued to pay her mortgage, property taxes and insurance. As time passed, neighbors complained to the City about the deteriorating condition of the house. The City determined the home was uninhabitable, and the fire department shut off the utilities.  Approximately two years after the fire the City filed a petition requesting a transfer of title to the property to the City, alleging the property had been abandoned and was a public nuisance.  All the while Harder was continuing to negotiate with the insurance company for payment. The case was eventually tried in April 2008, with the district court finding that the house was an abandoned property within the meaning of section 657A.10A, and awarded title to the City.

The Court of Appeals characterized the question as “whether an unoccupied house may be deemed ‘abandoned’ under Iowa Code section 657A.10A where it was rendered uninhabitable by fire three and a half years ago, has been boarded up since then, has been broken into repeatedly, and is the subject of complaints from neighbors.”

The Court of Appeals focused on the definition of “abandoned” found in Iowa Code 657A.1(1), and the eleven factors enumerated by the legislature in Iowa Code 657A.10A(3)  for the court to consider when determining whether a property has been abandoned.  Harder admitted that the property met several of the listed factors (it was unoccupied for more than six months, it did not meet code, it was not habitable, it had no utility service), but contended her failure to correct the situation was due to an ongoing dispute with her insurance company, and did not reflect an intent to abandon the property.  She cited her payment of the mortgage, taxes and insurance as evidence of her intent.  While the Court of Appeals recognized that these factors weighed against abandonment, they were not sufficient to overcome the other factors.  The court pointed to the underlying purpose of the statute, which is to prevent the “serious adverse effects of unsafe, abandoned homes on neighborhoods and communities….It would undermine the purposes of section 657A.10A to allow a homeowner’s private dispute with her insurer, even if meritorious, to serve as a defense to an abandonment proceeding.  If the insurer never paid, could the house remain boarded up and deteriorating forever?”  In a footnote the court analogized the situation to a bank foreclosure where the bank pays its property tax obligations but allows the home to deteriorate.  “This is not an abstract hypothetical” the court reasoned, “given the current troubles in our economy.”  The Court of Appeals affirmed the district court’s ruling that Harder abandoned the house. 

Justice Vaitheswaran dissented, concluding that the important factors weighed against a finding of abandonment:  (1) Harder continued to pay real estate taxes, mortgage payments, and insurance; (2) Harder continued to maintain the property; (3) there was no evidence of the presence of vermin, accumulated debris, or uncut vegetation; (4) the deteriorating condition of the home was a factor beyond Harder’s control because she did not have the benefit of insurance proceeds; and (5) Harder had no intent to abandon the home.

Abandoned/unsafe buildings, Iowa Court of Appeals , , ,