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Minutes 06-26-13 MINUTES OF THE CODE COMPLIANCE LIEN REDUCTION MEETING HELD O WEDNESDAY, JUNE 26, 2013, AT 6:30 P.., IN COMMISSION CHAMBERS CITY HALL, 100 E. BOYNTON BEACH BOULEVARD, BOYNTON BEACH, FLORIDA PRESENT: Michele Costantino, Chair Shana Bridgeman, City Attorney Gary Cole, Second Vice Chair Diane Springer, Code Compliance Coordinator Alan Borrelli Carol Brenner RoseMarie Yerzy ABSENT: Kathleen Carroll 1. Call to Order Chair Costantino called the meeting to order at 6:30 p.m. A quorum was present. II. Approval of Agenda Motion Ms. Yerzy moved to approve the agenda. Vice Chair Cole seconded the motion that unanimously passed. III. Swearing in of Witnesses Attorney Bridgeman inquired if the Petitioner received the letter from Diane Springer, Code Compliance Coordinator, explaining the process to be followed at the meeting. The Petitioner responded he had. Attorney Bridgeman administered an oath to all those intending to testify. IV. New Business Case No. 09 -3230 Bank of New York 215 SW 1st Street Diane Springer, Code Compliance Coordinator, presented the case. The notice of violation was sent on October 7, 2009, for violations pertaining to a foreclosure registration. The Respondent was to register the property, mow the overgrown yard, trim the overgrown vegetation, and secure the dwelling at all openings. The case was heard on January 20, 2010, and no one appeared. The compliance date and fine set by Meeting Minutes Code Lien Reduction Boynton Beach, Florida June 26, 2013 the Board was to comply by February 4, 2010, or a fine of $250 per day would be imposed thereafter. The violations were corrected on June 3, 2013, accruing 1,214 days of non - compliance and a fine of $303,500, plus administrative costs of $730.15. Ms. Springer explained the property met all the requirements for the lien reduction, including payment of two municipal liens, an outstanding water bill of nearly $3,000, and the application fee. When Ms. Springer first met Mr. Chirinsky, he purchased the property from the Bank of New York on April 3, 2013. He came to City Hall, in mid - April, to inquire about compliance and how to apply for the lien reduction. Three or four months prior to that, a title company had requested a lien reduction inspection. Ms. Springer provided him with a list of violations and the list of other violations found when the Code Officer re- inspected the property for the title company. In February, Mr. Chirinsky requested another lien reduction inspection. At the time, the Code Officer found debris from cut vegetation that needed to be removed, repairs to the damaged fascia and soffit were needed, and the windows and screens needed to be replaced with a permit, which was obtained and finalized on May 21, 2013. He removed an unregistered vehicle and replaced a rotted fence. Mr. Chirinsky contacted Ms. Springer on June 4, 2013, for an inspection. The Officer found grass needed to be installed, hedges or flowers needed to be placed in the planters, the sprinkler system needed to be repaired or replaced, and more trash needed to be removed. Ms. Springer received an email from him dated June 10, 2013, requesting a re- inspection. The property was in compliance so Mr. Chirinsky applied for the lien reduction. Ms. Springer had photographs. Eric Chirinsky, 1548 SE 6th Street, Deerfield Beach, the property owner, explained he closed on the property on April 16, 2013. The home was vacant and had been boarded for several years. The dwelling was secured the day he purchased the property. Within two months, the home was totally renovated, painted, and the windows repaired. He turned an abandoned house into a nice home. He admitted he took some risk purchasing the property with the liens, and he thought he could renovate the homes for less than it actually cost. The home was assessed at about $72K. He spent $41 K as of two weeks ago repairing the property. The home cost $65K and he was already at about $35K over the assessed value. It took longer and cost more than he anticipated, but he saw it through with the hope he would appear and the Board would grant a favorable reduction. It was a beautiful property. Mr. Chirinsky admitted he knew there were liens on the property. He had before and after photographs and a list of his expenses which he produced to the Board. Ms. Springer also distributed photographs to the Board. 2 Meeting Minutes Code Lien Reduction Boynton Beach, Florida June 26, 2013 Mr. Chirinsky explained he is not a professional investor. He just took a chance. He hoped he cleaned up the property and could provide a home to someone and make a bit of profit. Vice Chair Cale inquired about the amount paid for the municipal liens. Ms. Springer responded they totaled $1,000. Mr. Chirinsky planned on selling or renting the home. A Police Officer that grew up on the property contacted him as the home had sentimental value and he was interested in moving his family there. Mr. Chirinsky had no further evidence he wished to present. He did explain the Police Officer may rent or purchase the property. Vice Chair Cole viewed the photographs and complimented him on the home. Chair Costantino inquired if there was any information from the Bank if the home was occupied. It appeared the Bank totally ignored everything. Ms. Springer explained Mr. Chirinsky indicated the property was secured when he purchased it, so it was probably registered and then secured because the City did not secure it. Chair Costantino was considering starting the fine at $75,000 and zero out the fine in the second case since it was redundant. Mr. Chirinsky respectfully pointed out the money he invested in the property was about 40K over the value of the property. He thought a fair outcome would be to pay just the administrative fees, as he has taken an eyesore and unsafe building and changed it into a nice property that would be inhabited and contribute to the tax base. Chair Costantino explained the Board had to consider the safety of the community and the condition of the property for the period of time it was in the hands of the Bank. Ms. Springer pointed out the Bank registered the property on November 30, 2009. The property may have come into compliance, but the first time Code Compliance was asked to inspect it was upon its sale. The property was a Bank -owned property and the Bank let the property sit. The way the Bank sold the property was the new owner had to take on all the liabilities of the property. He worked with a realtor who contacted the Bank. The Bank made an offer contingent on Mr. Chirinsky accepting the Code violations, and the hope there would be significant reduction in fees. He thought penalizing someone who invested in the community, after the Bank ran from their problems, would not motivate other people to come into the community and improve the homes. The property was listed by a realtor in the open market. He got the title insurance through exception, and they listed the liens when he signed the documents. Ms. Brenner inquired if the realtor provided any advice how this could go or not. Mr. Chirinsky responded they only recommended he correct the violations quickly, apply for 3 Meeting Minutes Code Lien Reduction Boynton Beach, Florida June 26, 2013 a lien reduction and hopefully not be penalized. He reiterated he paid $65Kfor the home, spent $41K to fix it up, so he spent $106K and it was assessed at $72K. He spent more money on the house than it was worth. Motion Based on testimony and evidence presented in the aforementioned case and having been advised that the Respondent has complied with all lien reduction procedures set forth in Section 2 -84 through 2 -89 of the City of Boynton Beach Code of Ordinances, Vice Chair Cole moved that this Board reduce the fines instituted in the aforementioned case by virtue of this Board's Order of January 20, 2010, to an amount of $3,730.15, including administrative costs. Ms. Yerzy seconded the motion. Chair Costantino inquired what Vice Chair Cole would do for the second case. He responded it was the same situation and he would like to zero out the fine or have administrative costs only. He did not want to penalize the investor for the Bank's actions. Chair Costantino agreed, but commented the property sat there for a long time and had a direct effect on the community. Ms. Brenner agreed and commented other professionals were involved and no one seemed to do anything. She was sympathetic to Mr. Chirinsky, but thought administrative costs should be separate to the fines for both cases. Ms. Brenner requested Vice Chair Cole amend the amount of the fine in his motion to add administrative fees to this case and the next. Ms. Springer commented the administrative fines were included in the motion. Mr. Chirinsky commented he felt penalized, and he was in over 30% of the value of the property. He acknowledged it was bad the Bank did not do the right thing, but felt anything over administrative fees was punitive to the person who improved the property which was good for the City. Ms. Brenner understood, but explained surrounding property values decreased and the Board wanted people to know the Board was serious. Ms. Brenner requested Vice Chair Cole amend his motion to add the administrative fees. Vote The motion unanimously passed. Case No. 10 -3484 Bank of America (sic) New York 215 SW 1st Street Ms. Springer presented the case. The notice of violation was sent December 3, 2010, for violations pertaining to trash and debris and to mow overgrowth. The case was heard February 16, 2011, and no one appeared. The date and fine set by the Board was to correct the violations by February 26, 2011, or a fine of $100 per day would be imposed thereafter. The violations were corrected on June 3, 2013, accruing 827 days 4 Meeting Minutes Code Lien Reduction Boynton Beach, Florida June 26, 2013 of non - compliance, a fine of $82,700, and administrative fees of $730.15. The information on this case was the same as the prior one. Eric Chirinsky, 1548 SE 6th Street, Deerfield Beach, only added he immediately responded to all the violations and corrected them as soon as possible. There were no further questions from the Board. Motion Based on testimony and evidence presented in the aforementioned case and having been advised that the Respondent has complied with all lien reduction procedures set forth in Section 2 -84 through 2 -89 of the City of Boynton Beach Code of Ordinances, Vice Chair Cole moved that this Board reduce the fines instituted in the aforementioned case by virtue of this Board's Order of February 16, 2011, to an amount of $730.15, including administrative costs. Mr. Borelli seconded the motion that unanimously passed. Chair Costantino introduced Mike Fitzpatrick, one of the new Commissioners, and explained she invited him to the meeting to see the process of how the Board handles these cases. Commissioner Mike Fitzpatrick, 175 SW 2nd Street, explained he came to the meeting at the request of Chair Costantino. He commented one lien was similar to a case that came before the City Commission, and he moved to reduce the fines for much the same reason. The Banks were running from their responsibilities and other people were trying to improve the properties and were stuck with liens. He commented he served on the Board for a few years back in 1987 or 1989. He acknowledged banks have left others with their mess and agreed if the banks could be penalized, he would support it. He also agreed with the perception investors were improving units and putting them back on the market. There are many questions and there should be some dialogue to bring about a resolution. It might help investors if the City could negotiate the price down, so there would be some lien costs the Banks should absorb. He did not know how to get that message out. He thought one solution could be to foreclose the property, take them from banks and give them to investors. Commissioner Fitzpatrick commented the Board has an important job when cases come before the Board. If they did not do it, the City Commission would have to and it was a good system. He applauded the members for coming to the Board and making adjustments. He commented these are extraordinary times. Chair Costantino appreciated Commissioner Fitzpatrick's comments and explained the banks send representatives who advise they did not register the property. The representatives say the property is occupied and they cannot address the issues. 5 Meeting Minutes Code Lien Reduction Boynton Beach, Florida June 26, 2013 Banks claim they cannot maintain the property while the house is in the foreclosure process and the liens are out of control. The Banks do not send anyone to look at the properties to see if there is any one living there. She emphasized the City Commission makes ordinances that need to be followed Commissioner Fitzpatrick commented he did not have all the answers and if the Board wanted to work on the matter, they would work on the issue. Ms. Yerzy inquired if there was a way the City could clean up the property and bill the bank. Ms. Springer explained the City has the ability to abate the nuisance and was mowing properties, but they have to go through a process and those cases had to do with securing properties. Staff does not take mowing cases to the Code Board, but they did when the property had to be secured. In this instance, the municipal lien was for the City mowing the property two or three times, which Mr. Chirinsky paid for. Chair Costantino explained she spoke to a Commissioner in Lake Worth and inquired if Commissioner Fitzpatrick would be opposed to her gathering information on how Lake Worth brings cases before the Commission to make the process more streamlined. Commissioner Fitzpatrick acknowledged the importance of this situation. If Chair Costantino gathered the information, he would be happy to look at it and champion it on the City Commission level. There were no further questions and Chair Costantino thanked Commissioner Fitzpatrick for his time. Adjournment Motion There being no further business to discuss, Ms. Yerzy moved to adjourn. Vice Chair Cole seconded the motion that unanimously passed. The meeting was adjourned at 7:02 p.m. d afiubly-t Ojoav' Catherine Cherry Minutes Specialist 070113 6