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Elizabethtown could toughen stance on standing liens

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City reviewing policy to govern foreclosure actions on properties

By Marty Finley

Elizabethtown is reviewing a series of policy recommendations to toughen its stance on lien enforcement as the number and cost of liens rise, creating a financial strain and an administrative burden.

Planning Director Ed Poppe recommended the city place limits on a lien’s age, amount and property value before a property is foreclosed on while also restricting the number of abatement actions the city can take to clean up a property.

Poppe said foreclosure should be considered if the lien exceeds $25,000 or the property exceeds 50 percent of the assessed value by the property valuation administrator.

Councilman Marty Fulkerson suggested the city lower the amount to $10,000 because many properties where liens are held hold little value. Poppe agreed and said some of the properties are worth $30,000 or less.

Fulkerson said if the city allows a lien to reach $25,000 before action is taken it has little to no chance of recouping its money. Fulkerson’s recommendation was supported by the council.

Poppe also recommended the city consider foreclosure if the lien is in excess of 10 years, but members of the council lobbied for a drop to five years.

Poppe’s report included 11 properties throughout the city that would fit the criteria, but said that number will expand with a reduction in the allowed lien age and amount.

The city also reviewed a regulation to limit the number of times the city can respond to a property for maintenance, such as mowing. The regulation would recommend foreclosure after a standing order is issued by the Code Enforcement Board and the city has responded to the property 10 times in one year or 20 times over multiple years. Poppe said the city typically charges $400 to $500 toward the lien each time a property is mowed, factoring in fines and labor expense.

The city recovers money spent on citations or abatement actions when a property is transferred or sold. Most abatement actions are carried out by private contractors but handled by the Department of Public Works in specific instances, according to a city memorandum. Elizabethtown recovered more than $22,000 last year but has active liens against more than 100 properties, Poppe said.

For any foreclosure action, the city must file a petition in Hardin Circuit Court for a Master Commissioner’s sale, in which it would recoup payment from the property.

With recent changes in state law, cities have now moved ahead of mortgage holders when obtaining payment on standing liens. According to the city memorandum, Elizabethtown officials would review records on all foreclosures for other outstanding debts owed the city, including delinquent utility payments and property taxes.

Poppe said the city may simply recoup money from properties but it will own others if foreclosure is undertaken because the properties hold no value to outside entities. In those circumstances, he recommended the city attempt to sell the properties to an adjoining property owner or the best qualified bid. If a sale is unlikely, the city should consider transferring the property to Hardin County Habitat for Humanity or auctioning it through an absolute sale.

Councilman Bill Bennett asked if a foreclosure against any of the liens would directly impact a struggling family that has fallen on hard financial times, such as the elderly. If so, he suggested the city develop an amnesty program to forgive debts and give those homeowners a second chance.

Generally speaking, Poppe said, the majority of properties have been abandoned by their owners after they walked away from the mortgage and a bank has yet to begin foreclosure proceedings. With no one maintaining the property, the city receives calls about upkeep and starts mowing the site. However, Poppe said he would search Elizabethtown’s database and determine if any properties fit this criteria should the city want to explore an amnesty program on lower or one-time liens, considered on a case-by-case basis.

Marty Finley can be reached at (270) 505-1762 or mfinley@thenewsenterprise.com.

IN OTHER ACTION

Mayor Tim Walker said the city plans to install signs restricting duck feeding to the holding ponds near Ring Road as a measure to encourage congregation of ducks to one area and cut down on their nuisance throughout the park. Walker made the announcement during Monday’s work session of Elizabethtown City Council.

He said the ducks have been nesting in the park’s bandstand, and their bad habits have rubbed off on the park’s geese. The city received permission to tear down the nests from the Department of Fish and Wildlife, Walker said.