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Hundreds of Schenectady properties on city foreclosure list

Hundreds of Schenectady properties on city foreclosure list

Annual list of tax delinquent properties released
Hundreds of Schenectady properties on city foreclosure list
Schenectady Mayor Gary McCarthy speaks at a press conference in City Hall about the HOMES program.
Photographer: Marc Schultz

SCHENECTADY — The city has released its annual list of tax delinquent properties.

At least 529 properties are subject to foreclosure for failure to pay their 2017 taxes, according to a legal notice published in local newspapers.

The notice lists property owners who owed taxes as of Dec. 31, which means some property owners may have already settled the outstanding balances, said City Attorney Carl Falotico. He characterized the number of properties as average.

"Historically we foreclose on substantially less properties on the initial list, maybe a third,” Falotico said.

Owners have until July 5 to pay back taxes before the city begins the foreclosure process. 

The city sends notices to all parties involved, including banks, co-owners and any party holding a lien on the property.

After the city forecloses on the property, owners have until Aug. 9 to repurchase their homes, paying the full amount in back taxes, interest and any additional penalties, as well as a $1,000 fee.

The city attempts to place properties immediately back on the market after taking ownership in order to stave off the spread of urban blight and further deterioration. 

Code officers are required to inspect the properties and offer an estimate of what it costs to bring the sites up to code. 

Properties are then listed with real estate agents through the city’s HOMES program, an initiative designed to match city-owned properties with prospective buyers and lending institutions. 

Buyers are required to present proof of funds needed to make the repairs. Contracts contain requirements mandating house rehabilitation be completed within a specified time frame, typically between six months to a year. 

Failure to bring the properties into compliance gives the city the option of taking back the property without a refund. 

“That’s been very effective,” Falotico said. “I don’t know of any other municipalities who do it this way.”

PROPERTY CLEANUPS 

But as complaints about run-down city-owned properties remain a hot topic in the city, Falotico acknowledged the city is not required to adhere to the same compliance standards after taking ownership of the properties, some of which are more deteriorated than others.

“There isn’t a municipality in New York state who can foreclose on a property and bring them up to code,” Falotico said, citing financial limitations and limited resources. 

Falotico also pointed out most municipalities hire law firms to handle the foreclosure process, but the city conducts the process in-house, which he said saves funds and helps city officials become more familiar with the properties. 

The city Office of General Services oversees cleanup and maintenance of city-owned distressed properties.

Asked if there was a minimum maintenance standard once the city takes ownership, Mayor Gary McCarthy called it a “balancing act” and an “ongoing battle to get everything done and stay within a realistic budget.”

“They are not problems we created,” McCarthy said. “We’re trying to remediate poor judgment and the lack of commitment by former owners.”

Crews will begin work this spring on cutting grass and pruning bushes, he said. 

“We try to get them cleaned up within our budget to preserve the value in terms of selling them,” McCarthy said. "We want [the properties] to be nice as they can be without costing the city.”

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