Abandoned properties and vacant lots plague California cities, particularly now as the economy remains in the current downturn. Oftentimes this is a result of questionable ownership either because of a foreclosure or the owner walking away from the house. In any case, title issues, foreclosures, mortgage fraud and all the other issues that plague the housing market have put the burden on securing these properties on cities. There is, in fact, a way to put that burden back on to the banks and other owners.

Chula Vista adopted the Residential Abandoned Property Program (R.A.P.P.) in 2007, which assesses fines of up to $1,000 a day for failure to upkeep a vacant property in violation of the municipal code.^[1] Generally, the fines are assessed, and if unpaid, then a lien is levied against the property in the city’s name.^[2] These liens can be enforced personally against a responsible party, and as either judgment or tax liens.[3] The idea of the R.A.P.P. has caught fire and was copied by hundreds of cities nation-wide.

The California legislature passed a law in 2008 that specifically granted cities the power to pass R.A.P.P.’s and to assess fines of up to $1,000 a day.^{^[4]} A listing of 460 cities that have passed the R.A.P.P. or something like it is at http://www2.safeguardproperties.com/vpr/city.php. Even if cities have not passed something as stringent as R.A.P.P., most cities have ordinances that require property owners (even owners through foreclosures and often times foreclosure owners are called upon particularly) to upkeep their properties. This ordinance was very popular and won many city planning and managing awards as it provided a tool for governments to address vacant problem properties.

City attorneys^[5] can bring an Unfair Competition Law (UCL) claim against a business for any “unlawful, unfair or fraudulent business act or practice” that takes place in their jurisdiction.^[6] The law has been around for over a century, but legislators made sure to give it a wide reach when they altered it in 1992, giving it “sweeping language” intended to include every business practice that was also prohibited by law.^[7]

^[1]Chula Vista Municipal Code § 15.60.110, references Chula Vista Municipal Code 1.20 and 1.41, which provide for fines of $500 or $1,000 for each code violation.
^[2]Chula Vista Municipal Code § 1.41.160, allowing for unpaid fees to be recorded as liens on the property.
^[3]Chula Vista Municipal Code § 1.41.160(A).
^[4]California’s SB 1137 (2008), codified at Cal. Civ. Code § 2929.3.
^[5]Cal. Bus. & Prof. Code § 17204 (as amended by Proposition 64) allows city attorneys for cities with over 750,000 residents to bring suits.
^[6]Cal. Bus. & Prof. Code § 17200. “Each prong of the UCL is a separate and distinct theory of liability.” Birdsong v. Apple, Inc., 590 F.3d 955, 959 (9th Cir.2009).
^[7]Bank of the West v. Superior Court, 2 Cal.4th 1254, 1266 (1992).

Under the law, any business practice that violates a city or state ordinance is considered an unlawful practice and is independently actionable.^[1] However, any public (city, county or state) prosecutor can still bring a UCL claim, even without a traditionally injured party.^[2] Then, as a remedy, the city attorney could seek appointment of a receiver (under §17203), to secure and monitor the property. Such is the reach and strength of the UCL.

Conclusion

In formulating a response to the vacant/abandoned housing problems in their city, city managers should keep in mind that a violation of a R.A.P.P. or other vacant property ordinance allows for a UCL claim. Thus, a receiver is an option, even without the nuisance issues that normally lead to a Cal. H&S §17980.7(c) appointment. Oftentimes, a receiver can board and secure, then rent out or rehabilitate a property on a faster timeline than the owner that abandoned it can be brought to take action.

[1]Violations of local ordinances may be borrowed to establish an unfair competition law (UCL) claim based upon unlawful acts or practices. Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co.,20 Cal.4th 163, 180 (1999); In re eBay Seller Antitrust Litigation, 545 F.Supp.2d 1027, 1034 (N.D.Cal. 2008). See also Lauter v. Anoufrieva, 642 F.Supp.2d 1060, 1095 (C.D.Cal. 2009) (citing others that any federal, state or local law violation could support a 17200 claim).
[2]Id. See also § 17204.