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By: Sutton StokesMay 12, 2022

City Demolishes Graham Street Property

When City of Elkins tore down the charred remains of a house at 201 Graham Street earlier this year, it was just the latest chapter in a still ongoing story that began in 2014, when the house was rendered uninhabitable by a fire. Why did it take so long to deal with this hazardous eyesore, and what’s next for this property, which the city still does not own?

The answers to these questions highlight how different the story of each abandoned property can be and demonstrate some of the obstacles that can slow the resolution of such situations. The story of 201 Graham Street also illustrates the potential value of a new law passed in 2022 by the state legislature. That law makes changes to the tax-sale process and establishes a $10 million state fund for demolishing dilapidated structures statewide.

Sold on the Courthouse Steps

By the time of the 2014 fire, the owners of 201 Graham Street had stopped paying property taxes, and the house was placed on the list for that year’s tax-lien auction. These are held each fall by the Randolph County Sheriff’s Office on the steps of the county courthouse.

At tax-lien auctions, bidding starts at the amount of taxes and fees outstanding on each property. Elkins City Attorney Geraldine Roberts explains that winning bidders can’t take possession of the properties for at least 18 months after the auction, during which time the original owners may recover their properties by repaying the taxes and fees, with interest.

“What the sheriff auctions off at these sales is not the property but the right to collect the overdue taxes and fees from the delinquent owner,” says Roberts. “For eighteen months from the date of the auction, the owner of record can redeem the property by repaying those taxes and fees to the winning bidder. If there is no redemption after eighteen months, the winning bidder can take title to the property by completing the redemption process with the state auditor. But until they do, they don’t own it, so not only do they have no incentive to make repairs, they can’t even legally set foot on the property.”

In the case of 201 Graham Street, however, the winning bidder in the 2014 auction declined to accept title to it after the 18-month redemption period ended, and the property was placed back on the list for the next tax-lien auction. It was then purchased by another party, who also eventually declined to take title. Finally, after no one bid on the property at a third auction, the tax lien was transferred to the West Virginia State Auditor.

Throughout this time, the owners of record could not be found, and as mentioned, the parties who purchased the tax lien had neither the legal right nor the incentive to spend a dime on a property that was not, and might never become, theirs.

The burnt building continued to deteriorate, and the grounds became an overgrown jungle of poison ivy.

The City Obtains the Lien—But Not Ownership

In September of 2021, City of Elkins purchased the lien on 201 Graham Street for $726.35 in delinquent taxes, penalties, and fees from the period 2018-2021. Again, the city still did not own the property.

Unlike private parties who are the winning bidders at tax-lien auctions, however, cities don’t necessarily need to wait for title to a property before taking action to address dangerous situations there.

“Under state code, municipalities have the specific power to provide for the eliminations of hazards to public health and safety and to abate a public nuisance,” says Roberts. “In other words, cities do have the right to enter private property and demolish a derelict structure if it has been found to be structurally unsound. This property had been determined to be uninhabitable by both EFD and city code enforcement, so there is no question that the city was well within the scope of its authority to remove the hazards.”

After the demolition was complete, Roberts placed an additional lien on the property for the $14,700 cost to taxpayers of taking the building down and disposing of the debris. She points out that there is almost no chance of recovering this money.

“We can place a lien on the property for the cost of this demolition, but these kinds of liens are only payable if the property is sold and they would be cancelled in the tax-lien auction process,” says Roberts. “We can also take the owner to court, but it doesn’t matter how much a judge awards the city if the owner can’t pay. And in this case, we can’t even find the owner.”

What’s next for 201 Graham Street? Although neighboring property owners might be interested in purchasing the lot, it won’t be the city’s to sell until it is finally transferred to the city’s ownership, either by the owners of record or through a court order. Until then, all officials can do is monitor the property—and wait.

New Law Streamlines Tax Sales, Creates Demolition Fund

Although a new law passed during the 2022 legislative session won’t affect 201 Graham Street, it has the potential to simplify the process of dealing with similar properties in the future.

The state has yet to publish rules implementing the new law, so the specifics are not yet known, but state officials have said that one big change will be a reduction in the time allowed for redemption of delinquent properties from 18 to 12 months. Cities will also have more options for obtaining these properties outside of the auction process.

In addition, the law sets aside $10 million from the state’s ARPA funds to cover the costs of demolishing such properties, costs that—as in the case of City of Elkins and 201 Graham Street—have not usually been recoverable.

The state says it will use this money to bid out large contracts for many demolitions throughout different regions, in hopes of obtaining volume discounts. No matter how large those discounts are, however, $10 million will only go so far. By some estimates, it would cost hundreds of millions of dollars to demolish all dilapidated and unsafe residential structures statewide, never mind commercial and industrial properties.

Roberts is hopeful, nonetheless.

“This is the first major change to a process that hasn’t been working at all in a long time,” she says. “It’s very encouraging to see the legislature supporting cities in tackling this issue, and I just hope the state will see fit to continue and perhaps expand funding for the demolition program in future years. It could really make a big difference for West Virginia.”

 

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