ACTION presents ordinance to fight predatory land contracts
By Graig Graziosi
Activists demanding the city take efforts to protect residents from predatory land contracts took to Youngstown City Hall on Tuesday to demand action.
Members of the Alliance for Congregational Transformation Influencing Our Neighborhoods – including local neighborhood leaders and members of the Youngstown Neighborhood Development Corp. – brought the draft of an ordinance before Youngstown City Council’s Committee on Community Planning and Economic Development.
Elder Rose Carter, ACTION’s executive director, led a group of more than 30 members and concerned residents to pressure the city to pass legislation to force property owners to obtain a clearance from the city before they rent or lease a property using a land contract.
The legislation would require owners to alert the city to the contract, have the property inspected and earn a certificate of compliance through the department of Property Code Enforcement and Demolition before being cleared for rental.
“We’re not saying land contracts are bad, but we need to make sure that they’re fair,” Carter said.
Under land contracts, prospective owners pay rent to a seller for a predetermined number of years before having the option to purchase the property.
However, the contracts often push the burden of maintaining, repairing and dealing with financial issues attached to the property onto the renters, offering them no protections that would otherwise be available to traditional renters or mortgage-holders. This leaves renters open to any number of pitfalls, including pouring thousands of dollars into repairs or agreeing to rent a property that is, unbeknownst to them, in foreclosure.
In many cases of predatory contracts, the renters are evicted without ever having the chance to purchase the property, usually after they run out of money to spend on repairs or are unwilling to keep pouring resources into it once they realize their situation.
The ordinance in its current form is based on similar legislation adopted by Cincinnati to target businesses dealing in land contracts, including Vision Property Management, which maintains dozens of land contracts in Youngstown. In March, ACTION led a group of local activists to South Carolina to confront the owners of the business directly and pepper their neighborhoods with fliers detailing the company’s practices in Youngstown.
Nicole Alexander, Youngstown senior assistant law director, said the legislation would need to undergo revision before she would recommend it for council to consider.
Carter expressed some concern that the city would drag its feet passing the ordinance, but Alexander maintained that the city needs time to ensure the legislation would stand up under legal challenge and be enforceable.
“We want to pass a perfect piece of legislation,” Alexander said. “We want this to have teeth.”
One issue that will need addressed in a final version of the ordinance is the broadening of terms used in such transactions.
Atty. Patricia Dougan with Community Legal Aid said that companies like Vision Property Management have changed their business model and are no longer using land contracts, but are instead using “lease with option to own” contracts in many of the cases brought to her attention.
“Whatever ordinance gets passed needs to address land contracts, lease with option to own, rent to own contracts, everything. The focus shouldn’t be on the type of contract but on what’s inside the contract,” she said.
Councilwoman Basia Adamczak, D-7th, who chairs council’s economic development committee, said the ordinance would stay in committee for revision and a final draft should be prepared for a vote by October.
If you suspect you are the victim of a land contract in bad faith, contact Community Legal Aid at 330-362-8350.