Awarding title to city under abandonment statute not an unconstitutional taking

by Gary Taylor

Nicol and Street v. City of Monroe
Iowa Court of Appeals, May 3, 2017

Nicol and Street took title to property in Monroe, Iowa by warranty deed in 2013.  Beginning in May 2013, and over the two years that followed, the city sent them five letters regarding their failure to maintain the property.  Nicol and Street failed to take action, and so in April 2015 the city filed municipal infractions against the couple for several violations regarding junk, vehicles, and garbage on the property.  After a hearing in August 2015 the court entered judgments assessing civil penalties, and ordering them to fully abate the violations.  They did not do so.  Additionally, they failed to pay property taxes since purchasing the property, and utilities were not turned on at the property after June 2015.

In January 2016 the city petitioned for title to the property, alleging it was abandoned under Iowa Code 657A.10A.  Nicol and Street moved for dismissal, alleging that the statute is an unconstitutional taking of private property for a public purpose without just compensation.  The court denied the motion, and found at the end of a bench trial that the property met the definition of “abandoned” under the statute.  It entered an order awarding title to the city, and the couple appealed.

Statutes are presumed to be constitutional, and to prove otherwise a petitioner must “negate every reasonable basis upon which the statute could be upheld as constitutional.”  In determining whether the statute is reasonable, courts consider “such things as the nature of the menace against which it will protect, the availability and effectiveness of other less drastic protective steps, and the loss which appellants will suffer from the imposition of the ordinance.”

The Court of Appeals reviewed the procedural safeguards incorporated into 657A.10A, including that the city cannot act less than 60 days from the filing of the petition and must show that the owner did not make a good-faith effort to comply with the order, and concluded that awarding title to the property is a reasonable “final resort against those property owners who have otherwise failed to comply with housing codes, building codes, nuisance laws, or tax assessments when less drastic steps toward compliance have failed.”  It further noted:

Even in the event of a complete taking, the State is not required to compensate a property owner if it can show that the owner’s bundle of rights never included the right to use the land in the way the regulation forbids….657A.10A provides a sanction for those who use their property in a manner that was already prohibited.  Because the statute does no more than duplicate the result that could have been achieved in the courts by adjacent landowners under the law of private nuisance, or by the State [in the case of public nuisances] it is not a constitutional taking for which compensation is required.

Judgment for the city of Monroe.

Subjective desire to maintain building insufficient to overcome determination of ‘abandoned building’

by Hannah Dankbar

City of Harlan v Walter Rogers
Iowa Court of Appeals, January 27, 2016

Rogers obtained a house built in 1885 after the death of his father-in-law in 2004.  Rogers made minor maintenance to the property at that time, such as fixing a leaky roof and cleaning up the yard, but Rogers lived in California and had problems maintaining the property. Between 2007 and 2014 Rogers received and paid a dozen special assessments. Nobody lived in the house during this time.  Also during this time, the house was broken into multiple times and multiple antiques were stolen.

In 2011 Harlan police received a nuisance complaint about the house. As a result of that call a Shelby County Environmental Health Specialist inspected the property who reported that is was, “very apparent that the owners have let this property go for many years without any maintenance or upkeep.”

In 2012 the City filed its petition under section 657A.10A and sent Rogers an order stating that the house and garage were a nuisance and were in violation of local housing codes. Because Rogers made “substantial compliance with the pre-condemnation demands” made by the City, both parties filed for a continuance multiple times. In September 2014, however, Rogers’s attorney moved to withdraw from the case stating that Rodgers had not followed the advice of the attorney. After that, Rodgers represented himself in trial in January 2015. The Shelby County Environmental Health Specialist did a final assessment of the house and found that the house still did not comply with the City housing code.  The trial court concluded that the property posed a danger to neighboring properties and residents because of its’ condition.  The court declared the property abandoned and awarded the title of the house to the City. Rogers appealed this decision.

Rogers argued that the district court should not have determined that the property was abandoned. Iowa Code section 6577A.1(1) defines an “abandoned” building as one that “has remained vacant and has been in violation of the housing code of the city in which the property is located…for a period of six consecutive months.” The code offers a list of factors a court “shall consider” to determine whether a property has been abandoned. Rogers argued his desire to “maintain his ownership in the property in Harlan” is sufficient to overcome the conclusion that the property was abandoned, but the court did not agree. Even though Rogers was up to date on his property taxes and special assessments, the house did not have utilities for more than twelve years and was vacant during this entire time. According to inspectors the house did not meet code for human habitation; it was not a house that would be habitable simply by turning on the utilities. Rogers claimed he was working on getting the the house fixed and intended to move into it upon his retirement, but the court stated that Rogers subjective desire to maintain the property was not the controlling factor.  Because the property has been vacant for more than six months, the court determined that it met the statutory test for a abandoned property and ruled in favor of the City.

Notice of intent to demolish building “reasonably calculated” to inform owners of pending action

by Andrea Vaage

Yang v. City of Wyoming
Federal 6th Circuit Court of Appeals, July 13, 2015

Ming Kuo Yang and Julie Yang owned a commercial property in Wyoming, Michigan. The Yangs previously rented the property to a series of restaurants; eventually, the property was listed for sale in late 2010. The lease on the last restaurant ended in February 2011. The property was never sold and was then neglected. The owners continued to pay property taxes. In October 2011, city officials posted an abandonment notice on the building. The notice was also mailed to the address of the abandoned building, but listed the former owner as the recipient, not the Yangs. In July 2012, the city sent a “Notice and Order to Repair or Demolish” by signature-required certified mailing to the building address. This notice also listed the former owner as the recipient. Two months later, the post office returned the mail to the city as unclaimed. The City did a title search of the building and identified the Yangs as the correct owner. The City then sent both previous notices to the Yangs’ correct address by certified mail in September 2012.

The City did not receive a response from the Yangs. It then scheduled a hearing about demolishing the property for November 1, 2012. The City sent the Yangs a hearing notice by regular mail and also sent a notice to the Yangs’ realtor. Soon thereafter, the post office returned the original certified mailing to the Yangs as unclaimed. This information was not present. The Yangs did not appear to the hearing on November 1 where the board decided to demolish the property. The property was demolished in January 2013, and a $22,500 bill was sent to the Yangs’ address for the work.

The Yangs then discovered their building was demolished and claimed the city violated their procedural due process rights by demolishing the property without adequate notice. The standard of review is whether the City’s efforts were “reasonably calculated” to inform the Yangs of the action taken on their property. The City of Wyoming attempted to contact the Yangs through posted notices, mailed notices to the Yangs, mailed notice to the realtor, and the post-hearing notice. Michigan caselaw has established that a posted notice is, by itself, an appropriate way to inform a person of the proceedings against him. Another precedent notes that notice mailed to a person’s home address generally satisfies due process requirements. The Yangs argue, however, that notice by itself is not adequate, since the hearing notice did not provide the reasons for demolishing the property and the post-hearing notice would have come too late for the Yangs to prepare to defend themselves.

The Court found that all of the information contained in all of the notices, taken in the aggregate, were sufficient to meet due process requirements. Even though the Yangs did not actually receive notice, as the certified mailing was returned unclaimed, the additional efforts made by the City were reasonable attempts to contact the Yangs. The Court found the city’s attempts at contacting the Yangs were “reasonably calculated” to give the Yangs adequate notice.

Dissent

The dissent argued that the majority misconstrued the facts of the case and the contents of the notices provided by the City. The final four attempts at contacting the Yangs were not adequate because they did not provide the reasons for the potential demolition of the building, providing “less information than the average parking ticket.” The issue wasn’t whether the forms of notice were adequate, but whether the notices actually informed the owner of the issue. In the case, the dissent argues the City failed to provide the reasons for demolition in the follow-up notices and thus violated procedural due process.

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

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.

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