Chapter 2. Register Rental, Vacant, and Foreclosed Properties to Better Monitor Conditions

By requiring the registration of rental, vacant, and foreclosed properties, municipalities can better monitor conditions and finance proactive efforts to ensure that properties remain up to code.

Rental-Property Registration: Requiring rental-property owners to provide contact information for the owners or their local agents, pay an annual fee to cover the costs of regular inspections and complaint response, and learn their responsibilities under the code and regulations.

Rental-property registration, a self-funded tool established by local ordinance, requires owners of rental properties to register the properties with the municipality before leasing. Owners must provide detailed contact information, pay an annual fee, make the property available for inspection, and pay fines if they fail to register or meet the municipality’s standards. Registration fees may not exceed the total cost of administering the program.

What does it do?

The goal of rental registration ordinances is to preemptively address the burdens that problematic rental properties place on local governments. The registration law allows municipalities to quickly contact owners via phone or e-mail to report problems. Where an owner does not live or work in the municipality, an ordinance may require the owner to assign a local agent who can quickly respond to issues that arise. Each ordinance assesses annual fees to cover the costs of regularly inspecting properties and responding to complaints. Registration offers an opportunity to track and improve the performance of landlords without having to bring them to court.

How do we pay for it?

Rental registration programs pay for themselves, but fees collected must not exceed the total cost of administering the program. Commonwealth Court upheld a rental registration law, holding that an annual fee per residential rental unit is a permissible regulatory license fee as long as the total fees collected are commensurate with the costs of the program in connection with the issuance and supervision of the license or permit. The license fee may not exceed the actual or probable cost of the special municipal services rendered to enforce the regulation, including salaries and benefits for inspectors’ time devoted to the program. The court has determined that the salaries of the mayor and council are too far removed to be covered in part by rental registration fees. Similarly, costs that were fixed before the rental registration program was passed cannot be covered by the fee.(12)

What types of property are covered?

Rental registration ordinances typically apply to all residential rental properties.

What challenges will it solve?

Registration creates a database of the locations and owners of a municipality’s residential rental properties. Local governments can use the database as an effective resource to promote responsible management and allow for prompt contact with owners or managers from police, fire, emergency, and inspections departments when issues or emergencies develop.(13)

The law also allows a municipality to inspect a property before each new lease, annually or as infrequently as every three years for properties that have no history of code violations. The law allows a municipality to assess fines and recover costs through property liens for any corrective action that the municipality must take to ensure health and safety.

Where does it apply?

Any Pennsylvania municipality may adopt a rental registration law.

How does it work? What is needed to use the law effectively?

The ordinance should set goals, the specifics of the registration process, the inspection schedule, duties of owners, enforcement mechanisms, and an appeals process. Many ordinances also set forth tenants’ rights and responsibilities. Legal rulings have made it clear that the fees charged must be used to fund the administration of the program and cannot exceed the costs of implementation. A rental registration law works if there is good, constantly updated data and a low-cost enforcement mechanism to ensure that owners are following the law, as discussed in the next paragraph.

What policies and practices will increase our chances of successfully using this tool?

Make it easy for property owners who have high-quality rental properties to satisfy the requirements. The goal here is to hold negligent owners—those who fail to take care of their properties or rent to tenants with bad behavior—accountable, not to add significant costs or burdens to responsible owners of residential properties. Allowing owners to pay fees online helps make paying the annual fees less of a chore. Less-frequent inspections for owners of high-quality properties are very much appreciated as well. Having the capacity to complete inspections promptly upon request will ensure that owners can quickly lease to prospective tenants. In addition, a cap on total charges for owners who have multiple units may make sense, although in some locations smaller property owners have argued that a cap favors large landlords.

A low-cost method to enforce the registration requirement is also essential. New York City courts encourage owners to register by refusing to allow the eviction of tenants from unregistered rental properties. Minneapolis’s water company automatically checks whether a property is registered when a tenant calls to have a water bill put in his or her name. If the property is not registered, the owner must pay a $500 fine.(14) Other municipalities do not provide occupancy permits to unregistered properties.

Finally, a municipality must ensure that it can levy a lien against a property if the owner fails to pay penalties or if the municipality determines that it must take a corrective action and be reimbursed upon the sale of the property. Although courts have approved the concept of a residential registration fee, many jurisdictions include unique provisions that may be challenged in court. They include criminal penalties for repeat offenders, and mandatory liability insurance. Disruptive-tenant ordinances are not recommended, because they have been repeatedly challenged in the courts.(15)

What legal documents will we need?

  • Ordinance establishing the registration requirements
  • Registration forms
  • Searchable database
  • Fee schedule

Several examples of ordinances, forms, and fee schedules appear in the next paragraph. To ensure that the total fees collected do not exceed the program’s administrative costs, a municipality will also need to itemize the program’s budget.

Who is using the tool now?

Allentown’s ordinance was approved by Commonwealth Court in 2007, although we note that it is once again facing a court challenge. For other sample documents, go to the Housing Alliance Web site. Some ordinances contain “disruptive conduct” provisions along with rental licensing. A caveat to municipalities inclined to adopt those provisions is the court case Briggs v. Borough of Norristown et al, in which tenants were wrongly evicted after a domestic-violence incident in Norristown. It is summarized at https://www.aclu.org/womens-rights/briggs-v-borough-norristown-et-al. To avoid a legal challenge, an ordinance should have language that exempts victims of crime from the definition of “disruptive behavior.”

How can we combine this with other strategies?

The database created by registering rental properties can be very helpful in proactive code enforcement. Registration can also be an effective strategy for vacant and foreclosed properties.

Vacant-Property Registration: Requiring vacant-property owners to provide contact information for the owners or their local agents, pay an annual fee to cover costs of regular inspections and complaint response, and learn their responsibilities under the code and regulations

Nationally, hundreds of cities, counties, and boroughs have adopted vacant-property registration ordinances that require owners of vacant properties to register the properties with their respective municipalities and maintain the properties in accordance with local codes. The program is self-funding, but registration fees may not exceed the total cost to administer the program.

What does it do?

The goal of vacant-property registration ordinances is to preemptively address the burdens that problematic vacant properties place on local governments. The registration law allows municipalities to quickly contact owners via phone or e-mail to report problems, so that owners know what their responsibilities are under codes and regulations, and to ensure that they meet minimum property-maintenance standards. Generally, registration laws require the owners of vacant properties to submit their contact information and provide a local agent for the service of process. Registration under a vacant-registration ordinance is typically triggered by a certain length of vacancy set by ordinance, but the length of time differs greatly, ranging from a requirement to register immediately upon vacancy to a requirement to register within 120 days after vacancy. Safeguard Properties has created a nationwide directory of all such ordinances at http://www.safeguardproperties.com/Resources/Vacant_Property_Registration/Default.aspx?filter=vpr. A spreadsheet of all Pennsylvania vacant-property registration ordinances is available at http://www.safeguardproperties.com/Resources/Vacant_Property_Registration/PA.aspx?filter=vpr.

How do we pay for it?

Vacant-property registration laws pay for themselves. The license fees may not exceed the actual or probable cost of the special municipal services needed to enforce the program, including salaries and benefits for inspectors’ time and the creation and maintenance of the vacant-property database. The registration ordinance can employ an escalating fee structure because costs per property increase over time. Fees charged vary widely. For example, Richmond, Virginia charges an annual fee of $25, while Minneapolis charges an annual fee of $6,000, based on a city council–directed study of the true cost to the city of maintaining a vacant building.(16) The goal of the escalating fee structure is to provide an incentive for owners to sell, lease, or demolish properties rather than incurring ever-increasing fees. A municipality may fine a property owner who fails to comply, and if the owner does not pay the fine, the municipality can place a lien on the property. Fines and penalties are not limited by the actual costs of implementing the program.

What types of property are covered?

Vacant-property ordinances typically apply to all properties that are vacant and unoccupied for a specified period of time.

What challenges will it solve?

Many municipalities struggle to inventory their vacant housing stock, whether or not they have registration ordinances. Registration creates a database of the locations and owners of a municipality’s vacant properties. The municipality can use the database as an effective resource to understand its vacant-property challenges, to promote the responsible maintenance of the properties, and to allow for prompt contact with owners or managers from police, fire, emergency, and inspections departments when issues or emergencies develop. Affirmative duties of responsible parties under ordinances may include the submission of a plan detailing how a property has been secured and how it will remain secured in the future, the required purchase of insurance coverage for the unoccupied building, and the posting of contact information on the property. Additionally, many ordinances require an owner to submit a “vacant-building plan” when registering a property. A vacant-building plan generally requires a plan for temporarily securing a building and then a plan for demolition or rehabilitation. A few municipalities allow the owner to register the property for only a specific period; then the owner must rehabilitate the property or demolish it.

Where does it apply?

Any municipality may adopt a vacant-property registration law.

How does it work? What is needed to use the law effectively?

According to the Center for Community Progress, a vacant-property registration ordinance should include—

  • A clear definition of which properties and which parties must register
  • The registration requirements and procedures, including the information required of owners or lienholders
  • The fee structure
  • The owners’ obligations in maintaining the property
  • Penalties for failing to register in a timely fashion

More information is available at http://www.communityprogress.net/tool-1--vacant-property-registration-ordinances--pages-257.php#sthash.64k9sT2u.dpuf.

What policies and practices will increase our chances of successfully using this tool?

A vacant-property registration law should have a very clear definition of which vacant properties it covers. The goal is to include all vacant and abandoned properties without placing significant new burdens on landlords or property owners whose properties are unoccupied for a period of time in the normal course of business.

In addition, an ordinance should clearly define the owner of a property. The owner, for example, can be the mortgagee, trustee, agent, corporation, or lienholder.

Finally, there must be a mechanism to check whether owners have registered their vacant properties. Often, a municipality will assess a penalty for each day an owner fails to register. Thus, an owner of a property in a municipality with an ordinance that includes a $100-per-day penalty may be subject to a $36,500 penalty if he or she fails to register for one year. Chicago’s assessment of daily fees for failure to register was deemed appropriate by the courts.(17)

What legal documents will we need?

  • Ordinance establishing the registration requirements
  • Registration forms
  • Searchable database
  • Fee schedule

Who is using the tool now?

Allentown’s ordinance was approved by Commonwealth Court in 2007. In addition, the City of Washington and the City of Erie have vacant-property registration laws. In Washington, nonlocal owners must designate a responsible local agent. In Erie, owners must obtain liability insurance. For a full list of all Pennsylvania municipalities that have vacant-property registration laws, go to http://safeguardproperties.com/Resources/Vacant_Property_Registration/PA.aspx?filter=vpr.

How can we combine this with other strategies?

The database created by registering rental properties can be very helpful to record code violations and enforce progressive discipline. The ordinance can also require the registration of foreclosed properties.

Registration of Foreclosed Properties: Partnering with a for-profit company to require lenders to register properties once they are in default, pay an annual fee, and identify a contact person to oversee the security and maintenance of foreclosed properties

A foreclosure-registration ordinance requires lenders to register properties with a municipality once they are in default, to pay an annual fee, and to identify a contact person to oversee the security and maintenance of a foreclosed property. Municipalities may partner with a for-profit company that will, for a portion of the annual fee, contact the lender, create an interactive database of registered properties, and collect an annual fee from the lender. Since Allentown adopted its law in March 2013, the city, working with a for-profit, has registered more than 600 of approximately 900 foreclosed properties, has earned more than $60,000 in fees to support the program, and has achieved significant success in persuading lenders to repair properties that pose a danger to health and safety.

What does it do?

Foreclosure registration requires lenders to register all properties with a municipality at the time a bank issues a notice of default. Properties must be registered annually for as long as they remain vacant or in default. The ordinance requires lending institutions to provide a contact person to address safety and aesthetic concerns on the property.

How do we pay for it?

The program is financed through an annual fee. For example, Susquehanna Township charges a one-time fee of $200 to register each foreclosed property. Allentown charges an annual fee of $200 per property.

What types of property are covered?

The ordinance covers properties that have been foreclosed or whose lender has issued a notice of default. A 2013 court challenge of Chicago’s registration law found, however, that a city cannot hold federal government lenders Fannie Mae and Freddie Mac liable for maintaining a property during the foreclosure process, because Chicago cannot make law for federal agencies and the agencies have their own property maintenance standards.(18)

What challenges will it solve?

When a property is foreclosed, it typically goes through a period of disinvestment until the bank sells it. Foreclosed properties have cost Pennsylvania’s local governments millions of dollars in direct expenses as a result of the need to maintain, inspect, and respond to fires and crimes at the properties. Unmaintained foreclosed properties also bring down the values of surrounding properties. Foreclosure registration increases the accountability of the lending institution (which temporarily owns the property) for keeping the property up to code until it is sold to a new owner.

Where does it apply?

Any municipality may adopt a foreclosure registration ordinance.

How does it work? What is needed to use the law effectively?

Unlike most other tools in this manual, a law requiring the registration of foreclosed properties can be handled by for-profit companies that contract to implement the law for a fee. The for-profit will alert the municipality when a foreclosure is imminent, create a comprehensive database of all foreclosed properties that allows the municipality to contact a specific individual at the bank’s property management firm or division by e-mail, and handle the enforcement of that provision, in return for a percentage of annual fees.

Allentown partnered with one such for-profit, the Federal Property Registration Corporation. Susquehanna Township partnered with another for-profit, the Vacant Property Registry. Both rely on the for-profit to identify properties in foreclosure; to find the correct lender and contact person; to enter that information into a database that allows the municipality to quickly communicate with the lender; and to inform them of any code violations. The for-profit also collects the registration fee, providing half of the fee to the municipality and retaining the other half.

The for-profit creates and maintains the database of foreclosed properties, but municipal staff members have access to the database from their own computers. Every e-mail or communication is logged and tracked through the database, including when the bank was notified, whether and when a payment was made, and copies of all official correspondence. Municipal staff can scan and send letters and notices of code violations directly to the appropriate contact person via the database or can call the contact person. The municipality may aggregate all code and registration violations across all of a bank’s properties and charge the bank at a single time for all violations or fines.

What policies and practices will increase our chances of successfully using this tool?

National lenders typically have foreclosed properties in multiple jurisdictions. They will obey local laws but typically only where jurisdictions succeed in attracting their attention. This can be very difficult when a municipality cannot locate the correct contact person at a national lender’s office. Having a for-profit partner who has gathered this information about lenders across the country can be helpful.

What legal documents will we need?

  • Ordinance establishing the registration requirement
  • Registration forms
  • Searchable database, possibly created and maintained by the for-profit partner
  • Fee schedule

Who is using the tool now?

Susquehanna Township enacted a foreclosure registration ordinance in 2011. The goal was to make lenders accountable for the properties that they own in the township as a result of foreclosure proceedings. Susquehanna has one code enforcement and health officer and hires a part-time code enforcer to inspect properties in the evenings during the summer. Susquehanna partnered with a for-profit company called the Vacant Property Registry to implement the registration requirement. The Vacant Property Registry identified and installed a searchable database of all properties being foreclosed in the township, along with information about the relevant lender and the individual responsible at the lender’s office. By January 1, 2014, the township had 157 registered foreclosed properties.

Susquehanna charges a $200 one-time registration fee. That differs from Allentown and some other Pennsylvania municipalities, which charge an annual fee. The for-profit partner collects the fee and keeps half, while the township receives the other half. As a result, foreclosure registration is not a major source of revenue for Susquehanna, but it does give people in code enforcement an important tool to reach out to lenders and resolve code violations. If an issue arises, such as an unmowed lawn, the township can, with a click on the property database entry, send a message to the lender saying that the lender is in violation of the International Property Maintenance Code and that the violation needs to be addressed. The database also provides a phone number and contact person. Susquehanna Township has seen its payments to a contractor who mows neglected lawns of vacant homes in summer decrease. The township does not require non-lender owners of vacant property to register.

How can we combine this with other strategies?

Several cities are considering a single ordinance to cover both properties facing foreclosure and vacant properties, rather than instituting a vacant-property registration ordinance separate from a foreclosed-property registration ordinance.


12. Robert Kappe Associates et. al. vs. West Chester Borough, Court of Common Pleas Civil Action No. 00-07407 (2003) provides an extensive analysis of exactly what costs can be covered by rental registration fees. (See online appendix.)

13.  Some local governments, such as Carbondale, exempt nonprofits from their escalating-fee requirement. Carbondale, Pa., File of the Council No. 14 (2008) available at www.safeguardproperties.com/vpr/docs/Carbondale,PAordinance.doc (last visited Dec. 10, 2009).

14. Alexa Rissoff, Are YOU Registered? An Analysis of Buffalo’s Rental Registry Code, Partnership for the Public Good (2009). http://www.ppgbuffalo.org/wp-content/uploads/2010/06/Rental-Registry.pdf.

15. Ordinances that fine landlords or force them to evict disruptive tenants have been challenged because of the subjective nature of “disruptive conduct” and their potential to violate the Federal Fair Housing Act.

16 The Minneapolis fee has survived several court challenges, but owners continue to appeal, stating that the fee exceeds the cost of maintaining a building. Maya Rao, “Vacant Minneapolis Properties Are Assessed Huge Annual Fees,” Star Tribune (August 8, 2012). http://www.startribune.com/local/minneapolis/165370756.html.

17. Overview of Municipal Vacant Building Registries, Partnership for the Public Good (2010) http://www.ppgbuffalo.org/wp-content/uploads/2010/06/vacant+property+registry+laws.pdf

18 Mary Ellen Podmolik, “Chicago Loses Court Challenge to Vacant Building Registry,” Chicago Tribune (August 26, 2013). www.chicagotribune.com/business/breaking/chi-chicago-vacant-building-registry-20130825,0,7588381.story.