Mount Airy officials are hiring an Asheville law firm to pursue foreclosures on land where unsafe houses were torn down at taxpayer expense — a decision that didn’t come easy.
A vigorous debate preceded the city council’s 4-1 vote Thursday afternoon to have the Kania firm launch aggressive legal proceedings for six different sites in town representing demolition costs totalling $33,332 — accumulated during a span of nearly 10 years.
Instances of Mount Airy ordering the razing of dilapidated structures after owners failed to bring them up to code are a common occurrence. This has been accompanied by liens being filed on the land left behind which requires those expenses to be paid if and when it is sold — but often the property just sits there and the city doesn’t recoup its losses.
Thursday’s vote means that for the first time, the city government is going the extra — arguably drastic — step of proceeding with foreclosures to take ownership of parcels involved.
That will force sales of property from which the municipality can reap the proceeds, Mayor Ron Niland explained.
The locations involved are 335 Price St., 719 Worth St., 417 Nelson Hill Road, 140 Laurel Lane, 2261 Wards Gap Road and 2129 N. Main St.
Cost worries
But concerns were expressed Thursday afternoon by members of the Mount Airy Board of Commissioners about the costs surrounding foreclosures — although the majority did eventually decide to go that route.
After the board had opted during a previous meeting to explore this, City Attorney Hugh Campbell solicited bids from legal firms, with the one in Asheville emerging as the favorite.
“It specializes in local government foreclosures,” said Campbell, who mentioned that Kania handles such proceedings for Surry County, which results in auctions of affected property to the highest bidders on the courthouse steps.
“For the most part it’s fixed pricing,” the city attorney said of Kania’s charges for services — unlike some firms that bill according to hourly rates. “I thought that would be the best alternative for the city to use.”
The expense for a foreclosure case will range from around $3,000 to $5,000, according to Campbell.
However, Commissioner Jon Cawley said under his calculations — using a long list of itemized charges for services including sending demand/pre-foreclosure letters to property owners, title searches and filing court complaints for auctions — the city could pay $4,100 per case.
“What we’re going to be doing here is creating a large debt for the taxpayers,” predicted Cawley, who cast the dissenting vote Thursday not to forge the agreement with the Asheville firm. He based that on the money already owed to the municipality in addition to paying Kania.
Cawley said he would prefer to see collection proceedings undertaken by the city staff.
“I don’t think there is anything that says you have to be a lawyer to send a letter,” he remarked. “I won’t be supporting us using a law firm.”
But Campbell responded that the foreclosure services require a licensed attorney, and he does not handle such cases.
Meanwhile, city Finance Director Pam Stone said her department has mounted efforts to collect the money owed.
“We have tried, I’ll say that,” Stone added, saying all means available have been used.
“At one time we had one that we garnished some wages on,” she said of expenses for a site where a house had been demolished. “We have collected on one or two.”
Commissioner Tom Koch also expressed concerns about the legal fees to the city escalating once the Kania firm is engaged, saying he wanted to avoid a “blank check” situation.
“Attorneys don’t always have the best reputation,” observed Koch, who said he would like to see a $4,100 maximum per foreclosure.
Avoiding delays
This led to further debate about whether Mount Airy should see how Kania does with one case and proceed from there with the others, but council members were told that a single foreclosure could take four to six months to complete.
“I think we need to go with all six and see how that goes,” Commissioner Steve Yokeley said of efforts to collect the debts.
“At least we get something back,” he reasoned. “I don’t think we need to wait four to six months.”
Yokeley mentioned that there is an added expense of land sitting vacant while producing no property tax revenues, which also can impact the values of neighboring homes depending on its condition.
The process opens the door for new houses to be built, Mayor Niland said.
And even if it can’t achieve a suitable sale price, the city government would be better off donating the property to the local Habitat for Humanity organization than what is occurring now, Yokeley contended. “I don’t think we need to sit on these properties.”
In subsequently agreeing to hire the Asheville law firm, Mount Airy officials say they will monitor the progress of cases as they wind their way through the system.
The process culminates with a judge granting a foreclosure judgment allowing an auction to occur.
Source: https://www.mtairynews.com