A bill that would require mortgage creditors to maintain and pay the expenses of homes in foreclosure in senior communities has passed in the Assembly Housing and Local Government Committee.
The bill, A-4169/S-2806, was introduced by 10th District Legislators, Senator Jim Holzapfel and Assemblymen Dave Wolfe and Greg McGuckin in response to senior residents who are bearing the financial burden of foreclosed homes in their retirement communities.
“A sluggish national economy following the Great Recession and Super Storm Sandy have resulted in a number of foreclosures in our senior communities,” said Holzapfel. “Senior citizens were hit particularly hard by these events. They cannot be expected to bear the financial responsibility of maintaining such properties. This bill is designed to ease that burden.”
The bill provides that if the owner of a dwelling in an age-restricted community vacates or abandons a unit because of foreclosure, a representative of the community can notify the creditor of the vacancy and request restitution for maintenance.
“Senior communities in our district have seen a growing number of foreclosed properties in recent years,” said Wolfe. “Unfortunately, when a property is facing foreclosure the financial burden of maintaining the unit will fall onto the other residents in the community. With this bill, financial responsibility will be given to the mortgage creditor to pay any expenses incurred while the property is vacant.”
According to the bill, once a creditor is notified of a foreclosure it must pay the unit’s monthly maintenance fee and the unit’s share of any other common expenses of maintaining or operating the community in addition to the upkeep of the interior and exterior of the property.
“We have been contacted by several senior communities in our district who are dealing with foreclosure issues,” added McGuckin. “When units become abandoned the upkeep of the exterior and interior fall on residents who are already living on fixed incomes. If these properties are not maintained, the resale and property value of the development begins to diminish.”
The bill also states that if a creditor fails to pay the monthly maintenance fees or other common expenses the community shall have the same recourse against the creditor as it would against the owner of the property.