Avon Park reduces liens to make properties attractive for sale
Pallavi Agarwal | Highlands TodayAVON PARK - Imagine trying to sell a 5-acre abandoned grove with $226,250 in code enforcement liens and an appraised property value of $40,000?
Published: June 23, 2012
Published: June 23, 2012
It's an impossible task, and the property's listing agent Maria Castilow agrees.
The Re/Max Realty Plus real-estate agent, the bank that owns the property and the prospective owner, got a break recently when the Avon Park City Council agreed to reduce the lien amount and charge only 2 percent, or $4,525.
Administrative Services Director Maria Sutherland told the council at its meeting June 11 the $4,525 would cover all of the expenses the city incurred in administering the lien.
The other municipalities she polled typically drop the fines to 1.5 to 2 percent of the outstanding amount.
"It puts the property back on the tax rolls, gets it cleaned up," Sutherland said.
It certainly made the sale possible for the abandoned grove, which comes with another parcel, and is under a sale contract with a church group, Castilow said.
The lien ballooned when the daily fines, which went unpaid, kept accumulating, she explained. "The city didn't have $200,000 invested in it."
At the same meeting, the city also agreed to reduce another lien. Councilors agreed to lower the lien amount for 509 S. Florida Ave. to $2,430 from $121,500.
The property is appraised at $33,020 and is also for sale. The asking price for the three-bedroom, two-bath home is $19,900, according to several listings seen online.
Avon Park City Attorney Gerald Buhr advised the council to request a sworn affidavit from those benefiting, pledging they are not related to the owners who were assessed the liens.
That would avoid a situation where an owner facing big code enforcement fines sells the property to a relative, who sells it back for the same amount but with the majority of the fines wiped out, he explained.
The council agreed and added the condition to its motion.
Castilow said it is common for Realtors and banks to request lien reductions, especially for foreclosed properties that have sizeable code enforcement lien amounts attached.
"Foreclosed properties can go unattended for two years," she said. At $50 or $100 a day, daily fines can add up quickly.
"We don't ask (for lien reductions) if there are only a couple of thousand dollars in liens," she said. Municipalities usually spend that amount on administrative costs and are not likely to forfeit what they have already spent.
The City of Sebring frequently receives requests for lien reductions - from owners who want to refinance but cannot unless the lien is removed - to banks that want to make a foreclosed property ready for sale, said Sebring Police Cmdr. Steve Carr. Sebring's police department handles code enforcement.
The applicant has to request in writing, along with a $200 application fee, that the code enforcement board issue a letter "setting forth the amount of money that the City of Sebring will accept to release all pending liens as to that real property," the estoppel ordinance states.
The applicant is given a certain time to fix the violations for which the liens are assessed, Carr said. The lien is released once the applicant has complied and the code enforcement board OKs it during a hearing.
Sebring does not have a set percentage of the outstanding amount it is willing to abate. The code enforcement board decides whether "the lien shall be waived in full, reduced to a specified amount or shall be upheld in full," according to city ordinance.
"The lien reduction is on a case-by-case basis," Carr added. "Our goal is to get the property into compliance," he said.
Highlands County's Code Enforcement Officer Beverly Singley recalled about three or four lien reduction requests the county has received in the last year or so.
Anybody can request one, she said.
Only the county commissioners can approve such a release of a lien, she added, so the request is placed on a county commission meeting agenda once staff receives it in writing.
In one case, an owner got a partial lien reduction if she pulled a permit and fixed all the code violations. In July, county commissioners are scheduled to hear a lien reduction request from a mortgage company.
"They have to weigh out the whole option," she said. If $5,000 in taxpayer money has been spent should that be forgiven? Can the lien be reduced if the property is bought to code?
"We are trying to get compliance in the best possible way," she added.
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