Youngstown council cracking down on predatory land contractsTweet
City council’s vote to stop predatory land-installment contracts is the first step in a process to increase the quality of the housing stock in Youngstown, backers of the law say.
Members of the Alliance for Congregational Transformation Influencing Our Neighborhoods, the Youngstown Neighborhood Development Corp., block watches and neighborhood groups that supported the legislation packed city council chambers Wednesday to hear council approve the bill 7-0.
“It’s the start of many steps in the months and years to come,” said Ian Beniston, YNDC executive director. “We’re working to reduce predatory lending and increase housing quality. It’s a good day for residents. It provides clear protection for those who are entering into land contracts in Youngstown.”
A land-installment contract has a person pay the purchase price of a property in installments while the owner retains title to the property.
The legislation requires an inspection and a title search before a sale is finalized.
Council initially considered this legislation last month but postponed a vote because local activists wanted to include tougher language.
The additions included in the bill approved Wednesday:
Require the seller to provide the Mahoning County auditor’s tax statement on the property to the buyer.
Allows for damages up to $5,000 to be collected when predatory lending is proven, in addition to the buyer’s actual economic damages.
In cases where the violation is “determined to be unconscionable by the court,” the buyer can rescind the transaction or recover three times the amount of the economic damages or $200,000, whichever is greater.
“This is important because it’s going to protect citizens against predatory lending practices that are blighting our neighborhoods and taking advantage of people,” said Rosie Taylor, an ACTION board member. “We don’t want our neighborhoods blighted. This is a good start for the city of Youngstown. It will put restrictions on companies that harm the community.”
Next on the list for the activists is getting council to approve legislation to remove lead from houses and to crack down on rent-to-own land contracts.
Under rent-to-own land contracts, prospective owners pay rent to a seller for a predetermined number of years before having the option to purchase the property.
But some contracts place the burden of maintaining, repairing and dealing with financial issues attached to the property on the renters, offering them no protections that would otherwise be available to traditional renters or mortgage-holders.
This could leave renters open to any number of potential problems, including spending thousands of dollars on repairs or agreeing to rent a property that is, unknown to them, in foreclosure.