Emergency Raze & Remove Notice :(

18 Replies

Earlier this year, I purchased 5 duplexes in Milwaukee metro in a package deal.   The buildings were inexpensive $96K for the package and all together they needed less than $20,000 in repairs. 

I took a $100K HELOC to purchase the package.

I procrastinated in getting insurance since it was expensive and I thought to myself, I'll eventually get insurance once they are occupied and I have  cash flow.

Today, I got a call from the management company and a city inspector; there was major fire in one of the buildings that was already occupied and the city has issued an emergency notice to raze and remove in 2 days. 

I spoke with the inspector and was told the fire damage is extensive and the building is unstable and considered a health and safety hazard to public.  The city will demolish the building and the cost will be charged as a tax lien against the property if it's not done by Saturday 12 PM!  He estimated the cost between $10K-$20K.

I'm devastated with the loss and relieved that no one was hurt and very grateful to all the firefighters who put the fire out. 

I have a long day ahead of me.  The property management has to locate the tenants who were displaced,  to recover any personal belongings before the city demolishes the building.  Then I have to figure out what to do with the tax lien on the property???? which will be just a vacant lot in 2 days.  

I have great credit and can't let a tax lien ruin it :((

I need your advice on how to handle this situation.  I don't have $20K sitting around to pay for the demolition of this building. 

Find some demolition companies in Milwaukee and either email them tonight or call them first thing in the morning (Milwaukee time) on Friday.  Explain the situation and see if any of them can do anything for you.  If you find one that guarantees they can start Friday, get it done by Saturday noon, and charge $5K, then that's a lot better offer than the city is giving you.

The demolition companies will also know if it's possible to get some kind of stay or extension of the city order.  Like, maybe you can fence off the property (there are rent-a-fence companies that will do this for you) and get some more time.  On the other hand, if the house is about to fall into the street or something, they may not let you do this.

If you don't already have some, see if the property manager or the city can send you some photos of the damaged building.  Or, look at TV and newspaper sites in Milwaukee to see if they took a picture of it.  If nothing else, get a "before" photo from Google Street View; any photo will help the demolition companies to see what they might be dealing with.

Sometimes it's a thing where the demolition company the city uses is owned by the mayor's brother-in-law or whatever, and the city makes it real hard to get out of using that company.  But sometimes it operates reasonably.

You might also post in the Wisconsin real estate forum here, to get advice from somebody local.  There is also a Milwaukee forum, but it doesn't seem to be very active.

Good luck!

Hi Azita,

First off, I'm VERY sorry to hear about this and can imagine where your stress level is at right now and while this is no cure all answer, please take a deep breath and remember you will get through this fine and that EVERYONE hits bumps in the road, including major bumps at times and you'll be fine in the end, but I understand it probably won't be the most fun few weeks coming up. You'll be fine soon enough though!

OK, first off I'm wondering if you're confusing in the heat of the moment the effect this "lien" would carry as a hit to your credit score, report, etc because I'm honestly not sure on this, but I DON'T think this will be like having a court judgement hit your credit report, which IS a bad thing to have on there. MKE city and many others here will take things like an unpaid water bill and tack it on to your prop tax bill and although sometimes those bills can get quite high, (like when clueless, spaced out tenant hears and sees the damn toilet running for months, never says a word and you get a massive water/sewer bill! 

I would call that inspector and find out ASAP (and here the MKE inspectors usually have office hours from 7 or 730 till 830 or 9am CST, so not too long and he/she will be in their office. Ask if this is like a court judgement, or something less and hopefully they'll know.

Then my next question, WHEN DID THIS FIRE HAPPEN??? If you have a prop mgt company running things, I'm trying to figure out if there was some delay in notifying you since the inspector called and just said "Hey we're knocking this place down" which almost sounds to me like "well since you're not going to do a thing about it, we're knocking it down!" I'm NOT an attorney, but I'd wonder if you'd have at least some recourse there if the mgt co let it sit a week or even a few days before letting you know, since I'd think NORMALLY they'd say something more like "OK, this place must go so if you want to handle it and probably save some good money on that, you MUST get it done in 3, 5,7 or however many days or else we'll just do it. 

Also, HOW DID THIS HAPPEN?? Now, I know darn well you can't expect mgt co to ne totally on top of EVERYTHING going on, but I'd bet my last buck some dumb#$% had 8 things plugged into and pulling 14 amps thru a 99 cent extension cord, clueless as to it being ANY kind of issue!!

Unfortunately, (or thankfully for me) I've never had this happen and don't know who to call, but wondering if the mgt co dropped the ball here??

Either way, best of luck and keep trying to keep in mind that you WILL get through this!!!

Azita,

We had a deal like this in Chicago.  The roof blew off during a major storm.  The city came out the next morning and bull dozed the property.  Chicago has a program called Fast Track to deal with so called blighted properties.  We fortunately had insurance and received a settlement from the insurance company.

I would recommend calling the city to inform them that you are handling this problem.  They might grant you a stay, which should save you money.  I would find a demo company to handle this as the city will be significantly more expensive.

As for the tax lien, it would attach to the property, not you.  I do not believe it will show up on your credit report.

Mark

Azita, so sorry to hear about this. I agree with others about the tax lein. I don't believe that will be a credit hit until the property tax bill becomes late (which I suppose is only a month away). 

I recall getting a verbal quote a few years back to raze a SFH north of Milwaukee and the numbers were between $10-15k so you likely could do a few thousand better than the city.

Also wondering if those companies might be able to work with you on a payment plan?

As a point of clarification (which you can feel free to address sometime after this gets in control), do you have insurance on the building, or not. 

Best wishes, and glad to hear everyone is ok! That makes this only about stuff and not people. 

Hi Azita,

Sorry to hear about this unfortunate situation. I was in communication about a year ago with a lady in California who bought in Milwaukee and she had the same issue. She was able to get an extension of a couple of day to arrange her our demolition contractor. I believe it was between $5-7k. There was a hold up on the demo also as the gas company had to make sure the gas was shut. 

Give the city a call to get an extension. They can be a pain, but they would have to understand your situation being out of state. 

Good luck with this! 

I'm still VERY curious as to how much time had elapsed between this fire or whatever event caused the raze order and word getting to you, if the prop mgt company AND city inspector called on exact same day AND inspector wasn't giving you the old "courtesy call" to say, "hey your place burned down and you'll have to get rid of what's left standing" but instead said "Ya, WE are going to be taking it down for you IN 48 HOURS" that REALLY makes me wonder if prop mgr hadn't been dropping the ball on this! 

The more I think about it, I don't know if I've ever known anyone have a place burn w/out insurance, but they always had a say in WHO did the demo work! Usually when the city steps in on ANY issue and just says "WE ARE TAKING IT FROM HERE" it means they are sick of waiting and of course a burned down house (or multi) has muh shorter timeframe than say a pile of junk in the backyard, but when the city just says to step out of the way and watch for the bill, it means someone screwed up!

@Mark Creason as far as the liens go, I believe you're correct that they attach to the property and have certainly NEVER heard of one on a credit report, BUT what she MUST avoid is something I've mentioned before to anyone from out of town, although this was more on the lines of taking on too much repair work and thus too many code violations at once and then falling on the bad side or the powers that be here, is to AVOID AT ALL COSTS HAVING ANYTHING TURN INTO A CIVIL COURT JUDGEMENT! 

Might as well go get every unsecured credit card you can get, max them out and never pay a cent then, since the hit for the charged off accounts will likely be less than the judgements!

Not a good situation at all.

It amazes me how fast things are goings since we have tons of vacant buildings 

sitting around for decades in Milwaukee county. 

Check with @Jason Bott regarding possible suggestions or recommendations.

@Robert Taylor  The fire happened Wed @ 4:30 am

I had a vm from the inspector on Thursday and the property mgnt also called Thursday morning saying one of their employees saw it on the news. As of Thursday morning they didn't know where the tenants were!

I spoke with the inspector and he said when they post emergency raze and remove, the give the owner 72 hours and that's only to get the owner involved in the process and I didn't actually have to demo the building by tomorrow.   I've called a few demolition companies around and waiting for quotes at this point.

I also spoke with the detective investigating the fire and was told they have had a had time getting a hold of the property management.  She said she's closing the case with cause of fire undetermined, but most likely electrical.  She also said that the tenant was a hoarder and nothing of her belongings were salvageable.   The fire started in the second floor living room and destroyed the second floor and the attic.  The water that was used to put out the fire rushed down stairs and busted the doors and door frames out!

I called the property management company and was told the tenant (who had been living there since 1996 and came with the building) was a hermit and didn't allow anyone in.  I asked about smoke detector introspection and was told they doped off batteries for the tenant but she would not let them in.  As of noon today, they had not located the tenant!

I took matters to my own hands and called the tenant on her cellphone and talked to her.  She was furious!!!! She had been placed at a motel by Red Cross and complained that the property management didn't fix the loose power outlets in the living room when she reported loose outlets and wires!!!  She is in her 70s and was glad she didn't take her sleep pills that night, otherwise she would have fallen sleep and burned alive.  She said she heard clicking nose in the living room from her bedroom and then saw the fire a bit later.  Her neighbors saw the fire and called 911

I called the property management company back discussing the loose wires and they said they have no record of work order for loose wires!!!

I spoke with the tenant again offering her another unit with free rent for December.  With holidays around the corner, I want her to have a home for Christmas and after the holidays she can decide if she wants to rent the new unit or find another place.

It bothers me that the property management company did nothing to locate the tenant and I had to take a day off work today to straighten things out.  Now the loose wire issue is tenant's word against property management's word!  But I'm siding with the tenant and do believe the management company dropped the ball. 

Wow, this isn't meant to sound like I'm simply putting an arbitrary dollar value on a life, no matter if its an eldery "hoarder" or ANYONE, but it leads right into my next question, as I've never tried to buy property insurance like you can buy auto, where the "comp and collision" is optional (i.e. they pay for YOUR car, not just the straight liability), but when you said you held off on insurance, does that mean you had NO liability as well? If so, YOU ought to be glad she skipped her pill, or you'd be soon financially ruined for life or at least MANY years!

I'd also keep this "no insurance" part low key from here on out, I can't see at all how the city would like it and well, you may have actually lucked out in a huge way in the big picture! Good luck on this and I'm sorry but never had to use any board up or total demo co's!

Sorry to hear about your loss.

One more item you are going to need to consider is what to do with the property once the house has been razed.  I'm assuming from the price you paid for these duplexes, they are in pretty rough neighborhoods in the City of Milwaukee which will make it very difficult to unload the lot.   You are still going to have a property tax burden to deal with every year.  Some thoughts would be donating the property to a charity or contact the surrounding property owners to see if they have any interest in the property.

http://fox6now.com/2015/12/02/developing-firefight...

Azita, this is an unfortunate loss for you.  Thank goodness no one was hurt or killed in the blaze.

This really is an example of a new investor buying rundown properties, hoping to make a fortune. Wish that you had contacted me or some other investor in Milwaukee, before you made this purchase. Oh well, lesson learned.   

Properties at this price point and in this kind of neighborhood are hard to insure and costly, so it was a gamble on your part, to not insure them.  I think that you'll be in for a wild ride owning the other rentals that you purchased in this neighborhood.

In regard to the vacant lot, for which you will have to pay ongoing taxes, the City of Milwaukee will want you to build new on it in a certain time frame (I don't know that time frame, sorry).  The City can't even give away empty lots (where a house once stood and burned) for $1.00, because investors know it won't be worth it for them.

As another poster mentioned, maybe the City will take the lot as a donation (for a micro-park perhaps) and you can just write it off as a newbie investor loss.

Best wishes!

Wow, after watching the video it's clear that the house needs to be torn down.  Sorry you are dealing with this.

I admire your compassion for the tenant, but I would not want to continue renting to someone who is hoarding and won't let anyone in to perform maintenance.

After reading this again, I have to say I was POSSIBLY too hard on the mgt company (more on that in a bit) but nowhere near hard enough on the tenant, who apparently was refusing to let them in to do their management duties.

I'm sorry, but if someone wants to NEVER be bothered by ANYONE coming into their home, even to do essential safety related tasks, THEN GO BUY YOUR OWN PLACE AND LIVE AT YOUR OWN RISK OF PERIL!!!! If this had been a duplex or multi unit building, what if other units had tenants inside and people had been killed or badly burned, all because someone doesn't FEEL like letting people inside "their" space to do things like check smoke and CO detectors, or maybe make sure the tenant isn't doing the insanely stupid but incredibly common practice of plugging 7 or 17 things into one or a few 99 cent cheap, crappy little extension cords, which I'm sure the fire dept will tell you is the main preventable cause of fires that start for STUPID reasons! 

Also, what about those fire fighters who will go running into a burning building, risking their own lives, how do they feel about some tenant (or owner/occ) who just doesn't FEEL like dealing with the "awful" inconvenience of having someone inside their space? Too bad, especially when these fires can often spread to the home next door, what if they have young kids put at risk, all so someone can not have to be inconvenienced by having their personal space invaded by a landlord or prop mgt co doing their job? 

They're probably the same ones who'll be on the phone ASAP looking to sue anyone and everyone they can too! Now, I do still put blame on the mgt co and why the heck weren't they calling you saying "hey your tenant in . . . . . REFUSES to EVER let us in to do our job as your prop mgr" but I know darn well that even if I live in a single fam home that I own free and clear, taxes paid, etc thus NO ONE has any "hook" on me to open up my door to let them in to do anything, if a neighbor calls the city (or in my case the village where I now reside, where things are a lot more tightly controlled than in the city of MKE, where they have all sorts of issues to deal with) if they call and say "hey my neighbor is this Bob guy who's got crap piled all over his home, he gets really drunk at night and falls asleep with lit cigarettes in his hand and he's going to burn his house down sooner or later and I'm scared it will take my house with it" trust me, they WILL be at my door soon to check this out! I don't know the exact laws on this, but I'm quite sure they'll have a legal remedy to return this time with the local PD and if I still say "Nope, get off of my property, not coming in my home!" that my front door will be knocked off of the hinges by the PD and once they have made sure its safe for the inspectors to enter, they'll come in and take whatever action is necessary to ensure the safety of both myself and my neighbors, as well as the fire fighters who'd have to risk their lives due to my own idiocy. 

We all have private property rights to an extent, but as we saw in this case, someone who thinks they have absolute rights to refuse entry to anyone can cause a LOT of problems for other people, while other than the loss of her junk, the tenant just walks away from the entire mess!

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