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'Zombie house' legislation introduced in State Senate and Assembly

A boarded-up house in Brentwood seen on Dec.

A boarded-up house in Brentwood seen on Dec. 18, 2014. It is among the zombie houses on Long Island, according to California-based RealtyTrac. Credit: Chuck Fadely

State Assembly and Senate lawmakers have introduced legislation that would require banks and lenders to maintain thousands of houses left abandoned while in foreclosure instead of waiting until they take possession.

The Abandoned Property Neighborhood Relief Act of 2015 would have banks care for those properties, known as zombie houses, as soon as the foreclosure process starts. Current law requires homeowners to care for their properties until ownership is transferred to a bank at the end of the foreclosure process.

A yearlong Newsday investigation published last month found that Long Island municipalities spent at least $3.2 million last year to clean, board up and demolish more than 4,000 zombie houses. Foreclosures in New York average about three years -- among the longest in the country.

"We do not want communities to look like scenes from 'The Walking Dead,' " state Sen. Jeff Klein (D-Bronx), who introduced a Senate version of the bill Wednesday, said in a statement.

Assemb. Helene Weinstein (D-Brooklyn), who sponsored the Assembly bill earlier this week, said in a statement Wednesday that banks should take on more maintenance responsibility because they have "contributed to this problem."

"They push borrowers out of their property ... and permit delinquent mortgaged residential properties that are vacant and abandoned to fall into disrepair," she said.

A spokesman for Senate Majority Leader Dean Skelos (R-Rockville Centre) did not return a call seeking comment about support for the legislation.

Banking industry representatives have lined up against the bill, saying it would impose unreasonable costs on lenders. Bank spokesmen have blamed the increase of zombie houses on New York's lengthy foreclosure process.

Garden City attorney Bruce J. Bergman, who represents banks in foreclosure cases, called the legislation "wildly inappropriate."

"The borrower is the owner until the moment the property is sold at a foreclosure sale, and therefore the responsibility to maintain the property has always been with and should remain with that owner," Bergman said. "If this cost is transferred to lenders, then that amount of money becomes unmeasurable for an unpredictable period of time and renders making a loan in New York dangerous and expensive beyond any ability to predict."

Similar bills were introduced last year but died in Assembly and Senate committees. Unlike last year's bills, those introduced this week provide that fines paid by banks for noncompliance will go to a fund that local governments may use to hire additional code enforcement officers, said a spokeswoman for Attorney General Eric T. Schneiderman, who proposed the legislation.

"It's time for the legislature to pass this common-sense bill and equip our local communities with the resources they sorely need to beat back the growing plague of zombie properties," Schneiderman said in a statement.

The legislation also would establish a statewide vacant homes registry, similar to one established in 2013 by Brookhaven Town.

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