City’s reduction of assessed value for condemnation calculation “beyond anything that appears reasonable”

by Rachel Greifenkamp

Iyad Nabham v. City of Beloit

(Wisconsin Court of Appeals, April 24, 2014)

In June of 2011 the City of Beloit issued a condemnation order on property owned by Iyad Nabham after an inspection in March 2011 during which several substantial code violations were identified. This was despite the fact that an inspection four months prior found only “minor violations.” The building in question houses a retail business and five apartment units, the City of Beloit ordered Nabham to raze the structure within 30 days as they had found that the estimated repair cost to bring the building up to code was $63,000 and the property’s value was $49,300. Nabham contested the condemnation order and was granted a temporary injunction and trial in circuit court.

The violations found in March had existed for many years and the city offered no explanation for why the violation suddenly required immediate attention. The City of Beloit also did not justify why the value of repairs was increased from the inspector’s estimate and the property’s assessed value was cut in half. According to the circuit court judge, the value of the property was cut in half between 2007 and 2011 for the purpose of allowing the City to claim that repairs would cost 50% of the assessed value. Finally, the inspector’s report contained several unnecessary references to Nabham’s Middle East ethnicity. It was concluded that such details suggested that the city had an interest in removing the building because of the ethnic background of the people living there rather than code violations.

The circuit court action concluded with the injunction being made permanent, the repairs being deemed unnecessary, and a reassessment of the building’s value. The City of Beloit appealed. The Wisconsin District IV Court of Appeals affirmed the circuit court, stating:

“Overall the evidence supports the circuit court’s credibility determination and findings.  The circuit court found that there were no violations needing repair and that the City suddenly reduced the assessed value of the property “beyond anything that appears reasonable.”  Not only was there no basis for the City’s declaration that the building was “so out of repair as to be dangerous,” but there also was no basis to claim needed repairs exceeded 50% of the assessed value…We conclude that the circuit court’s findings are based on a credibility assessment and those findings support a determination that the condemnation order was unreasonable.  We affirm the injunction order.”

The city was ordered to withdraw the condemnation order and begin the inspection process again.

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