When municipalities and counties spend money to repair or demolish a building that violates the building code, a lien may be filed against the property for the costs incurred. 1 A lien is a legal claim to property, put in place to satisfy the owner’s debt. The lienholder (i.e., the local government) may enforce the lien by requesting that the circuit court order the sale of the property to satisfy the lien. 2 In contrast to a large-scale, systemic approach, a lien is a way of attempting to force a property owner to pay for demolition, nuisance abatement, and repairs that were completed by a local government.
Adopt the West Virginia State Building Code (WVSBC) or the International Property Maintenance Code (IPMC). See Section on the Building Code. See also Section on Ordinance to Regulate Unsafe Properties for information on demolition and repair liens for unsafe properties under West Virginia Code Sections 8-12-16 or 7-1-3ff.
- Relatively simple
- Allows local governments to recover costs
- Problem properties are addressed rather than continuing to deteriorate
- Threat or imposition of lien may motivate property owner to be more compliant and pay debts rather than facing litigation
- The landowner cannot acquire financing on the property, and usually cannot sell the property, without satisfying the lien
- Recovering costs is not guaranteed
- Recovering costs for demolition is particularly unlikely if the result is an empty lot with low value
- If the property owner cannot be located, moving through court is difficult
- Imposing and enforcing liens uses time and resources, adding to those already expended making repairs or demolishing a building
The process of imposing and enforcing liens requires time and resources. In particular, liens imposed under building codes use the time of code enforcement officials, and securing the services of a code enforcement official can sometimes be a funding challenge by itself. However, if local governments successfully enforce a lien, these costs can potentially be offset.
John Reed, a former compliance officer for the Wood County Building Permit and Compliance Office, says, “Usually we’re successful in getting the property owner to do [demolitions and repairs] themselves before it gets to the point of imposing a lien.” However, Wood County needs to finance the cleanup of two or three properties per year; for those properties, the County imposes liens in order to recoup the cost of cleanup. 3
Usage Throughout West Virginia:
Many local governments in West Virginia attempt to use liens to recover costs for demolitions or repairs to neglected properties, though many communities struggle with collecting on those liens. In Wheeling, for example, abandoned buildings and difficulties locating the property owner pose challenges to using liens effectively. 4 Over the past few years, home rule communities have been given more flexibility in collecting on demolition and repair costs. For a Summary of Home Rule Applications, see Appendix G. For instance, the City of Parkersburg may now collect the value of demolition and repair liens at tax sale auction in addition to delinquent property taxes. Similarly, the City of Buckhannon may now assess remediation costs as a property tax lien instead of a general lien.
For liens imposed under the WVSBC/IPMC:
- Sections 106.3 and 110.3 of the IPMC provide that code enforcement officials may take action to abate violations, and any action they take “shall be charged against the real estate upon which the structure is located and shall be a lien upon such real estate.” 5
- IPMC Section 107 provides for notice and service of notice to the person responsible, “includ[ing] a statement of the right to file a lien in accordance with Section 106.3.” 6
- To be enforceable, all local government liens on real estate must be recorded in the clerk’s office in the county where the real estate is located. 7
- Other rules passed by the local code enforcement agency may apply, but generally, liens are enforced in court and given priority according to the order in which they are filed. 8
- Note: Liens often compete with each other during enforcement proceedings. The general rule on establishing the priority of liens is “[f]irst in time, first in right.” The practical result is that other liens might need to be satisfied before the local government’s liens. 9
- • Note: Both municipalities and counties can pursue civil actions for reimbursement of costs without imposing a lien under an unsafe properties ordinance. 10
Q: What is the difference between these types of liens and judgment liens?
A: A judgment lien is created when a creditor obtains a court judgment stating that an individual owes the creditor money. The creditor then obtains a writ of execution from the court to have the sheriff enforce the lien by seizing property. By contrast, a lien for demolitions or repairs is a “property lien,” which must be recorded and must be enforced through a court judgment ordering sale of the property. The end result of both processes is similar—the sheriff will ultimately seize the property in question for a property lien—however, there are different procedural requirements for each process.
Q: Is it worth the risk of making repairs or going forward with demolition if successfully enforcing the lien is uncertain?
A: Balancing the risk of a net financial loss in the process is a matter of strategy based on the needs and resources of individual communities, the nature of the property in question, and the circumstances of the property owner. If it seems unlikely that costs will be successfully reimbursed, it may not be worth going forward in certain cases. For instance, the property’s value after demolition may be worth less than the total amount of costs incurred to pursue demolition. However, if going forward with demolition and repairs is a priority in a certain community, and if the property can later be put back into productive use, it may be worth the risk.
- W. Va. Code Ann. §§ 7-1-3ff(h), 8-12-16(e)(1) (West 2015).
- Id. § 8-12-16(e)(2).
- Pamela Brust, House to be Demolished, News and Sentinel (Jan. 13, 2015), available at http://www.newsandsentinel.com/page/content.detail/id/602725/House-to-bedemolished. html?nav=5066.
- Ian Hicks, Wheeling to Use Gas Royalties for Demolitions, The Intelligencer/Wheeling News-Register (Jan. 14, 2015), available at http://wvpress.org/news/wheeling-use-gas-royalties-demolitions/.
- Int’l Prop. Maint. Code § 106.3, 110.3 (2012).
- Id. § 107.2.
- 7 W. Va. Code Ann. § 38-10C-1 (West).
- 8 City of Parkersburg v. Carpenter, 203 W. Va. 242, 245, 507 S.E.2d 120, 123 (1998).
- 9 See id at 122; see also W. Va. Code Ann. § 38-10C-1 (West).
- 10 W. Va. Code Ann. §§ 8-12-16(e)(2), 7-1-3ff(h) (West).