On October 5, 2011, Chicago Alderman Pat Dowell introduced an amended Abandoned Property Ordinance to replace the ordinance that became effective on September 18, 2011. Instead of treating banks as owners of vacant homes, even before the foreclosure process is complete, the new proposal instead would require banks to start maintaining a vacant property within 30 days of it becoming “vacant” or 60 days after default, whichever is later. Mortgagees will be required to determine on a monthly basis whether any mortgaged residential property that is in default is “vacant.” The term “vacant” is a defined term in the ordinance and includes when “the structure is empty or otherwise uninhabited by persons and the structure or lot is in need of maintenance, repair or securing,” and at least one of the following exists: (a) doors or windows are smashed through, broken, unhinged, removed or continuously unlocked; (b) gas, electrical or water services to the entire premises have been terminated; (c) there has been no legal construction for over six months; (d) law enforcement officials have received at least one report of trespassing, vandalism or other illegal acts on the property in the last six months; or (e) there has been a judicial or city administrative order declaring the property unfit for occupancy. Again, mortgagees or their agents will need to make this determination every 30 days. The required maintenance would include boarding up buildings to keep squatters out, mowing the grass and shoveling the snow. Signs also have to be posted with a phone number of those responsible for the property. Violations can lead to fines of up to $1,000 per day.

Finally, the city has made it very clear that it intends to lobby hard for passage of this ordinance in Springfield as statewide legislation, and those servicers who signed off on this ordinance also agreed to actively lobby Springfield in favor of this legislation.

The proposed ordinance already has passed the City Council’s Committee on Housing and Real Estate, and the full City Council is likely to vote on it in November.