Wisconsin - City Hid Condemned House Status Until After Purchase

[Vincent John Tucci]

Posting for a friend of mine who would like to remain nameless.  Thank you in advance for anyone that can shed some light for him.  He is a biggerpockets follower so he will see your posts.  

....."Purchased House from County in Tax Delinquent Sealed Auction in Wisconsin, “As Is”. Prior to purchase we obtained a title and judgement search, all results showed no liens, judgements, or anything else. Once we entered we saw the home needed more work and money than we could do at that time so we focused on other projects. A year later we returned to the house for construction bids and for potential sale when we received a “Raze Order” requiring us to demolish within 30 days or the City will do it at our expense. Our realtor called/emailed the city and the city admitted that the house should have been demolished years ago but they never got around to it. City said they tried to contact the previous owner in 2017 (before we purchased) but they had “issues” notifying the bank and because of that they did not record any raze order. In the emails they use the word condemned. There has never been any posting on the house that the property was condemned (nor is there a posting now about the raze order). They also told me on the phone the property was condemned for health reasons.

I believe we get 30 days from notice for to file restraining order/injunction and I believe they have not followed many procedures of raze or condemnation, but I’m not sure of the relevance, it may only delay the inevitable. State law says that if it costs more than 50% to repair the house then it is subject to raze order. I was on the verge of a sale when we got the raze order as I was just looking to make the money back I spent on it. I can’t spend another 10-15k on an attorney only to wind up in the same place in a year. The fight is not whether it costs more than 50% to repair, that is fight I believe we will lose. The thing I’m having trouble with is the government owning and having access to the house, making a determination that the house needs to be demolished, yet not file any paper or put up any postings or anything until after it is sold at government auction. They have sinced filed the raze order, further destroying my chances of a sale even if I were to get the raze order removed. Again, just looking to make my money back and not lose my shirt. Thank you for any assistance."

[Marcus Auerbach]

Sorry to hear, you are in a tough spot. Even tough it seems the city may be at fault here and have not followed protocoll, you are probably facing an uphill battle. Assuming that the house does not have the best curb appeal, I don't think the goal of the city is to necessarily raze the house, but to find a solution to the eyesore problem. I am sure the neighbors are not happy to have a delapitated property right next to them and quite frankly this is where communities have to step up for everyone's benefit. The fact that you did let it sit for a year without doing anything is probably not beeing looked at favorably by the neighbors either and I'd say understandbly. I guess my focus would be on renovations; if it's gone too far, then raze it and sell the lot. Because selling it to someone else is just kicking the can down the road. Maybe the city would assist in some way? I do believe that as investors we have a role to play in society (that's why the IRS gives us so many incentives to do what we do) and we have a social responsibility as landlords, flippers, developers etc beyond making money and that's sometimes just not fun.