Razing Buildings: A New Twist

January 17, 2014

In the past, a municipality, together with certain other individuals, could issue an order to raze a dilapidated, dangerous, or unsanitary building that is unreasonable to repair. The order is issued to the building’s owner; and if the owner does not comply with the order within the time limits set forth, the municipality may proceed to raze the building. In such event, the municipality could take the cost of razing the building and charge it in full or in part against the real estate upon which the building is located. In such event, that cost becomes a lien upon the property and may be “. . . assessed and collected as a special tax.”

The foregoing language results in the following. If the property owner did not pay the tax, it became “delinquent.” In such event, the county pays the amount of the special tax as part of the August settlement of property taxes with the municipality. Invariably, properties of this sort many times involve delinquent general taxes. This means that the county treasury funds not only the delinquent general taxes but the cost of razing the structure.

Recently, the Governor signed into law an amendment to the razing statutes. Essentially, the change is that the razing costs will no long be levied as a “special tax.” Rather, it must be levied as a “special charge.” Under law, counties are not required to settle up special charges; and those costs will, therefore, remain with the local municipality.

Accordingly, as municipalities consider their options in terms of dilapidated structures, they should be aware of the fact that the general fund will not necessarily be reimbursed in August for the cost of razing structures. That cost will remain with the municipality until recovered by other means.

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For more information about "Razing Buildings: A New Twist," contact Timothy D. Fenner at tfenner@axley.com or 608.283.6733.