Thursday, June 24, 2010
From Kermit Lind of Cleveland State:
The Court issued the following statement on its web site:
“In these two cases, the Court imposed fines on the Defendants for extended and extensive violations of the City’s codes. The Court analyzed in depth the aggravating and mitigating factors and found no basis, at this time, for mitigation of the fines. Defendants are related, out-of-state, for-profit corporations in the business of buying and selling real estate. The Court discussed at length the impact that neglected properties have on the city and the harm caused by investors who neglect properties and shift the costs of nuisance abatement to the City’s taxpayers. Among
the factors the Court found aggravating were Defendants’ ongoing failures to correct violations and their “offer” to the City of a sum insufficient to cover even the outstanding demolition costs and unpaid taxes on the properties. The Court imposed total fines of $11,948,000 on Interstate Investment Group and $1,059,000 on Paramount Land Holdings, LLC.”
The Court’s decision sends a message to those presuming that compliance with local building and housing ordinances that protect the public health, safety and welfare is not required of those who own housing for business purposes. In Cleveland, banks and bulk purchasers of bank real estate owned (REO) properties have claimed in legal proceedings that municipal laws do not apply to them when it conflicts with their business interests in holding title to real property.
The Court also scolded City Prosecutors for weak prosecution in the sentencing phase of these cases. It calculated the small costs to chronically lawless investor-owners of violating in rejecting the prosecution’s proposed sentences. Judge Pianka’s judgment also stated the Court’s now familiar policy of sentencing for compliance over punishment. That policy mitigates fines where the guilty homeowners abate or pay the costs of abating nuisance conditions.
With the new Cuyahoga County Land Reutilization Corporation now in operation as an advanced capacity land bank, some banks and other absentee commercial owners of residential properties, including Fannie Mae, are looking to it for help in disposing of unmarketable houses.
The Court’s web site is http://www.clevelandhousingcourt.org/hc_rd_m.html.
Jamie Baker Roskie
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