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City of Milwaukee Increases Registration Requirements for Residential Property Subject to Foreclosure Actions

Real Estate Law Alert Karen D. Perzan, Kelly L. Turenne

Effective April 29, 2011, the City of Milwaukee amended its requirements relating to the registration, inspection and maintenance of residential properties subject to foreclosure actions. Previously, lien holders were only required to register residential properties pending foreclosure after it was determined that the property was abandoned. Under the new amendments, all residential properties subject to foreclosure proceedings must be registered with the Commissioner of Neighborhood Services. The bank, lender, other financial institution, or its responsible agent or servicing company or other foreclosing entity must register the property in the name of the lien holder. Under the new amendments, residential condominium units and properties only in proceedings for the foreclosure of tax liens are exempt from the ordinance's requirements.

For foreclosure proceedings commenced on or after April 29, 2011, registration must be completed within five working days after initiating the foreclosure proceeding. This new registration requirement also applies to residential foreclosure actions filed within the six-month period prior to April 29, 2011. For residential foreclosure actions filed within this six-month period, registration must be made within 30 days after April 29, 2011. Residential properties subject to foreclosure proceedings initiated prior to this six-month look-back period remain subject to the prior inspection requirements, and remain subject to registration requirements if the property is abandoned. In addition to expanding the registration requirements, the registration fee has been increased from $35 to $250; additional fees and penalties apply for late registration, failure to register, and failure to comply with inspection and maintenance requirements.

New registration forms have been prescribed by the Commissioner of Neighborhood Services and can be downloaded from the Department of Neighborhood Services website at the following address: http://city.milwaukee.gov/DNS/RPPF.htm. The required registration information includes information identifying the location of the property, the last known owner or owners of the property, the date foreclosure proceedings were commenced and the case number of the foreclosure action. The registration is valid from the date the registration form is completed and filed with the Commissioner and the registration fee, including any late fees, is received by the Commissioner. The registration is dissolved and the responsibilities of the registrant, including its inspection and maintenance responsibilities, end upon receipt by the Commissioner of written evidence of a sale in foreclosure, redemption of the property, other transfer of the lien holder's interest, or release of the lien holder's interest in the property through vacating the lis pendens.

As before, lien holders are still required to cause a physical inspection to be made of the property within 30 days after the filing of the foreclosure proceedings. Re-inspections must be made at least once every 30 days following the initial inspection. Written records, including dated photographs, of all inspections must be maintained and preserved.

If an inspection shows that the property is abandoned, the filing parties must notify the Commissioner of the abandoned state of the property, provide a description of the external condition of the property, and state whether there is an "accessible structure" on the property. "Accessible structures" include compromised doors, walls, windows or similar structures that are unsecured and could allow unauthorized access to the interior of the property. The notification must identify the agent or servicing company, if any, that is authorized by the filing party to enter upon the property and to conduct repairs or required maintenance.

Additionally, upon receiving information that a property is abandoned, the registrant must post a sign affixed to the building indicating the name, address and telephone number of the registrant, and if applicable, the person responsible for the purpose of service of process, and the name, address, and telephone number of the person responsible for the day-to-day supervision and management of the building for the filing entity, if the person is different from the registrant or authorized agent. The sign must state that no trespassing is allowed and must be placed on or adjacent to all entrances to the building. The signs must be maintained until the building is no longer vacant. The person responsible for day-to-day supervision and management of the building must reside in the seven-county area comprised of Milwaukee, Ozaukee, Kenosha, Racine, Walworth, Washington, and Waukesha counties.

As previously required, once it is determined that a property is abandoned, the registrant becomes responsible for maintaining and securing the property. This includes assuring that there are no accessible structures on the premises, and assuring that there are no conditions upon the property presenting an immediate risk to the health and safety of the public. The registration is dissolved and the responsibilities of the registrant under this ordinance cease, as noted above.

With these new amendments, the City of Milwaukee places additional obligations on lien holders from the time of commencement of a foreclosure action, regardless of whether the residential property is occupied or vacant. Lien holders will need to timely comply with these new obligations in order to avoid late fees and penalties that may be imposed by the City of Milwaukee.

For additional information about this ordinance, please contact Karen DaCosta Perzan at (414) 277-5649 / karen.perzan@quarles.com, Kelly Turenne at (414) 277-5577 / kelly.turenne@quarles.com or your local Quarles & Brady LLP attorney.