Laserfiche WebLink
and they are only available to a limited <br />number of cities. <br />Contracts for deed have been used to <br />successfully buy and sell thousands of <br />homes around Minnesota. However, some <br />property owners use contracts for deed as an <br />alternative to a traditional lease, even though <br />the purchaser has no intention of buying the <br />home. Some communities have encountered <br />a situation where a property owner is buying <br />many homes in a community, then selling <br />them on contract for deed. This can allow a <br />person to essentially act as a landlord while <br />evading a city's rental inspection and rental <br />licensing process, while the buyers lose the <br />traditional legal rights and protections as <br />tenants. Many view it as a way to rent the <br />property and may not be aware of it being a <br />contract for deed. <br />Numerous problems arise for cities and <br />neighborhoods when property owners are <br />acting essentially as renters. It is difficult to <br />determine who is responsible for <br />maintaining the property or for paying utility <br />bills and property taxes, and cities may not <br />be able to inspect substandard properties if <br />they are not subject to a lease agreement. In <br />some situations, property owners may wish <br />to have a renter be the responsible party for <br />utility bills and utilize contract for deed <br />arrangements to have the person living on <br />the property be the responsible party. The <br />property may also not be recorded at the <br />county for homesteading purposes if the <br />buyer is not aware of the formal change in <br />ownership that results from a contract for <br />deed. <br />In recent years, private equity companies <br />have begun purchasing large numbers of <br />single-family homes to convert to residential <br />rental uses. The impacts of large a number <br />of acquisitions by private equity companies <br />on cities, housing stock, and the rental and <br />home ownership market are not yet fully <br />understood by local, state, and federal units <br />of government. Possible issues that may <br />need further exploration include proposed <br />disposition strategies for such a large <br />number of properties and how that may <br />affect the local housing market. <br />Response: The Legislature should: <br />a) Secure increased state and federal <br />resources and provide financing tools <br />to help cover city costs associated with <br />foreclosed and /or vacant properties, <br />community revitalization strategies, <br />and community investment, including <br />revenue sources for programs that <br />support foreclosure mitigation, <br />homeownership counseling, and <br />expanded homeownership <br />opportunities and are sustainable. <br />b) Allow cities to take actions necessary <br />to protect foreclosed and/or vacant <br />homes from damage and to help <br />preserve property values in <br />neighborhoods where concentrations <br />of such conditions are present, <br />including an expedited process to <br />address nuisance properties. <br />c) Reexamine the Contract for Deed <br />statutes to determine whether <br />additional protections are necessary to <br />prevent property owners from <br />evading responsibilities of a landlord, <br />and provide local jurisdictions <br />resources to allow for education of <br />future buyers and sellers in contract <br />for deed arrangements. <br />d) Support local authority for cities to <br />collect all delinquent taxes, utility <br />bills, liens, and assessments on <br />foreclosed, vacant, boarded and/or tax <br />forfeited properties. <br />e) Improve notification to cities and <br />consistency in the information <br />available to cities when a property is <br />in the foreclosure process and vacated. <br />League of Minnesota Cities <br />2016 City Policies Page 51 <br />