Property Registration Services | Property Registration Compliance

Following the Wrong Community Ordinances Could Cost You Money


Mistakes in meeting compliance of property registration ordinances do not come without penalties. For banks, mortgage companies and mortgage servicers holding large portfolios of properties requiring registration, PRS provides some eye-opening information about how following the wrong community ordinances could cost you money. Big money.

The Cost of Compliance Failure

There are currently more than 2,000 Vacant Property Registration Ordinances (VPROs) enforced across the United States. Now, more commonly called PROs (Property Registration Ordinances), they came about following the housing market crash of 2007/2008 and were designed as tools to combat large swaths of neighborhood blight triggered by volumes of housing foreclosures. Original ordinances specifically targeted vacant or abandoned properties, but now most focus on residential properties that may be in various stages of foreclosure; others target rental properties of all classifications; still others focus on commercial and business buildings. Regardless of the property type, missing registration deadlines, renewals or meeting other ordinance requirements carries with it hefty penalties for legally identified property ownership. A quick survey of just three websites dealing with fines and penalties shows how costly failing to comply can be for banks, mortgage companies, and mortgage servicers. Take a look at the eye-popping costs in places like New York City, Omaha, and Chula Vista.

With fines, penalties and other assessments easily reaching the thousands of dollars per year, per property, you don’t necessarily even need a calculator to total up the potential monetary costs to property owners on an annual basis. This is especially true for parties like banks and mortgage servicers who may hold title to large numbers of properties requiring registration that may be dispersed across countless municipalities and counties. Obviously, failing to register, or mistakenly registering with the wrong municipal or county jurisdictional authority, only serves to drive up the cost of legal compliance. And following the wrong registration ordinance based on mistaken or misidentified property location is more common than you might think.

Precise Identification of Property Location Is Critical

As noted on the PRS Home section of its webpage, there are two common problems that result in following the wrong community property registration ordinance. Both mistakes cost legally identified property owners time and money.

The first common problem is relying solely on the use of post office zip codes to pinpoint property location. Zip codes often overlap multiple jurisdictional areas—creating the possibility that property owners may register a property when and where it might NOT be required, and conversely fail to register a property when and where it IS required. In both cases, potential fines, penalties, even civil and criminal citations may come into play. PRS solves the first problem for its property registration clients and potential clients by using its sophisticated cloud-based Obligation To Register (OTR) Tool Kit. Part of the OTR approach goes well beyond zip codes by incorporating Geocoding: verifying the exact jurisdictional location of a property by matching longitudinal and latitudinal coordinates through a geographical information system (GIS). This step virtually eliminates the possibility of incorrect identification of property location, and helps certify whether that particular property is obligated to be registered—as well as when and where—and with what local government jurisdiction.

A second common mistake that results in potentially following the wrong community ordinances comes when property owners in fact correctly identify the right geographical jurisdiction for property registration but fail to determine if a property meets specific jurisdictional requirements (i.e. foreclosure, or occupancy status). Missing this step likewise can result in registering a property where it may not be required while posing the risk of failing to register where the obligation to register has been determined. Both missteps again result in lost time and more importantly, unnecessarily imposed fines, penalties and citations. Calculate those costs for those holding large portfolios that do in fact have an OTR, and costs can skyrocket in a New York Minute.

In addition to its Geocoding to help determine OTR, PRS also employs on behalf of its property registration clients another sophisticated database—C.O.R.E (Community Ordinances & Registration Engine). This search engine specifically tracks and monitors every single property registration ordinance currently enforced, checks and double checks for existing ordinances that may have been modified by local governmental jurisdictions to meet changing market conditions, and keeps an eye out for any new property registration ordinances under consideration by municipalities and empowered governments near and far. These two steps help property registration clients constantly determine and assess which of their properties require registration and which may be exempt—and which properties may move in and out of OTR dependent on what phase or step in a foreclosure process they may be undergoing.

While banks, mortgage companies, and mortgage servicers are in the business of lending, they are not necessarily in the business of property management or property registration compliance. That’s where reputable services like PRS come into play with specific industry tools, experience and technology to provide both time, and more importantly, money-saving steps for clients who may follow the wrong ordinances in a given community.