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Senate housing committee backs measures letting DFS step in when localities don’t enforce maintenance on foreclosed properties
Summary
The committee advanced S.2117 and S.2122 to authorize the Department of Financial Services to pursue violations and civil penalties for certain foreclosed residential properties when local governments decline enforcement; members debated local-state coordination and resource constraints.
The Senate Committee on Housing, Construction and Community Development reported two related bills — S.2117 and S.2122 — that would clarify and extend the Department of Financial Services' (DFS) authority to enforce maintenance obligations on certain foreclosed residential properties.
State Senator Brian Kalama described the bills as amendments to Article 13 of the Real Property Actions and Proceedings Law that would allow DFS to inquire whether a municipality intends to enforce local fire, building or safety code violations for foreclosed properties. If the municipality declines, the bills would permit DFS to exercise enforcement authority and, under S.2122, to seek civil penalties that would be payable to DFS to justify enforcement activity.
Kalama said the bills are designed to address ‘‘zombie properties’’ — foreclosed or abandoned homes that are left unmaintained during foreclosure and can become neighborhood blight. "These are properties that by definition are already subject to Article 13," Kalama said, adding the bills do not create new violations but clarify who may enforce existing obligations and how local governments and DFS should coordinate.
Committee members raised concerns about state intervention when a local municipality chooses not to enforce. One senator asked whether DFS should ‘‘parachute in’’ and make what might be effectively local land-use decisions; Kalama and others responded that the bills are narrow, apply only where Article 13 jurisdiction already exists, and were partly intended to address local resource gaps that leave properties unaddressed.
Both bills were moved and seconded in committee and were reported to the Senate floor for further consideration. The transcript records recorded votes and some ‘‘AWR’’ (answers with reservation) notations; the committee chair and clerk should be consulted for the official roll-call and any recorded dissents.
The committee discussion referenced prior work on local code enforcement capacity and noted that enforcement is often constrained by limited local staffing. The bills were presented as a targeted tool for cases where the foreclosure process yields a property that is not being maintained and the locality declines to act.
Committee members asked staff and sponsors to clarify coordination protocols and the criteria DFS would use to determine when to intervene.
