Keller Williams Realty - Summer 2019

When Family Law Issues Involve Real Estate

Summer Vol. V

Selling Vacant and Abandoned Properties

AUG 2017 Note From the Editor Dear Reader,

Our real estate practice specializes in understanding the unique complexities of selling homes tied up in legal processes, whether that’s divorce,

If you are in charge of an abandoned property, it may be in your best interest to find a way to sell it. Selling an abandoned property is often difficult because of the location and/or state of the property. However, local governments put up obstacles beyond those in an attempt to control the neighborhood. They openly created disincentives for leaving the properties vacant and penalize those who let their properties fall into such a state of disrepair that they are considered blights on the neighborhood. Although the reasons are understandable, it works against those who are trying to do the right thing and divest themselves of a property they truly don’t have the resources to care for. Some urban areas have a particularly large number of abandoned properties. Here are some examples of obstacles and incentives used by Washington, D.C., Maryland, and Virginia. Washington, D.C. Requiring an extra tax as a kind of punishment is considered experimental, as we don’t yet know the full impact of these measures. D.C.’s Department of Consumer and Regulatory Affairs (DCRA) currently taxes vacant properties 5 percent extra, and 10 extra if it is determined that those properties are blighted. The law allows for some exceptions, such as those owned by the federal government or those under construction. There is an exception if the owner can prove that the property is on the market for rent or sale with some qualifications, and there’s a rarely granted exemption for financial hardship. These and other exemptions are subject to time limits and to appeal by the homeowner. There is confusion among homeowners about the qualifications and the new legislation which will put the burden of proof on the homeowner to prove that a property is even occupied. The new rules would also cut down time limits for some exemptions and penalize those who fail to list

their unoccupied properties as being so. As it stands, the law puts an impossible burden on the DCRA for maintaining a list of properties but also adds in a rebate for those who comply with the regulations and then manage to fill their vacant properties within a year. Maryland Property taxes in Maryland are determined locally. Maryland offers a homestead exemption, and local jurisdictions offer some other tax incentives for occupied real property, though an investigation discovered that many vacant properties mistakenly get those credits. Strict rules about tax arrearages owed have contributed to the problem in Maryland, but a tax credit in Baltimore for taking over an abandoned property is a major incentive as it offers up to 100 percent reimbursement under certain conditions. Many local jurisdictions require owners to register vacant property, but the requirements are not as restrictive as those in D.C. For instance, many require a $50 fee with registration occurring within 30 days of a foreclosure sale. Virginia Virginia real estate property tax percentages are surprisingly low, though the amount taxed is still steep because of the high property values. Residents can take advantage of homestead exemptions, both state and federal, for tax and bankruptcy purposes. Some local jurisdictions have enacted laws which penalize vacant property owners, although the effects are nominal compared to D.C’s more strict policy. Charlottesville, for instance, has a requirement to register a vacant property within 365 days, and the fee is $25.

probate, or bankruptcy. The challenges of these types of filings don’t come just from the buyers and sellers; they also come from spouses, heirs, the IRS, local tax authorities, local code enforcement, HOAs, and POA. If you value working with an agent who can avoid these pitfalls, someone you can feel confident will close the file, then give me a call or send an email: (301) 660-6272, ext. 700, or Cormier64@ Yours truly, –Marc Cormier Editor/Realtor

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