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96-329 Resolution No. 96-329 RESOLUTION AUTHORIZING THE EXECUTION OF A RELEASE AND SATISFACTION OF JUDGMENT FOR CASE NO. 92 OV 208, ENTITLED CITY OF ELGIN V. RICHARD HERSEY WHEREAS, Richard Hersey is the owner of the property commonly referred to as 522 Brook Street, Elgin; and WHEREAS, violations of the Property Maintenance Code are currently existing on the property; and WHEREAS, the City has obtained judgments against Mr. Hersey in one housing court case because he failed to maintain the property in compliance with the Property Maintenance Code of the City of Elgin; and WHEREAS, economic rehabilitation of the property is not feasible unless the city's judgment liens on the property are reduced; and WHEREAS, Mr. Hersey is refinancing the mortgage on the property and will be using the equity in the property to make the repairs needed to eliminate the existing violations of the Property Maintenance Code; and WHEREAS, the public interest will best be served if the Property Maintenance Code violations are corrected as quickly as possible to eliminate the property's blight and its detrimental effect on surrounding properties . NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Corporation Counsel Erwin W. Jentsch be and is hereby authorized and directed to execute a Release and Satisfaction of Judgment on behalf of the City of Elgin for Case No. 92 OV 208 (City of Elgin v. Richard Hersey) on the condition that ( 1) Mr. Hersey tenders payment to the City of Elgin in the amount of one thousand dollars ($1,000 . 00) , and (2) deposits the sum of three thousand dollars ($3,000 . 00) in an escrow account with SBI Title, Inc. Company to ensure the existing code violations are corrected before January 31, 1997 . s/ Kevin Kelly Kevin Kelly, Mayor Presented: December 18, 1996 Adopted: December 18, 1996 Omnibus Vote: Yeas 7 Nays 0 Attest: s/ Dolonna Mecum Dolonna Mecum, City Clerk t, p City of Elgin Agenda Item No. November 26, 1996 TO: Mayor and Members of the City Council FROM: Robert O. Malm, Interim City Manager SUBJECT: Release of Judgment - 522 Brook Street PURPOSE The purpose of this memorandum is to present to the Mayor and members of the City Council a request for a reduction in a judgment due to the City for property maintenance violation cases at 522 Brook Street. BACKGROUND emb. A property maintenance case was initiated at 522 Brook Street in October, 1991 . This is a single-family owner-occupied property. Violations cited included a deteriorated garage, chimney, and an accumulation of junk and debris in the yard. The violations were not corrected and the case went to a court action. A court case was initiated in February, 1992. The owner, Richard Hersey, did not appear for the first two court dates but pled guilty to the charges in April, 1992 . A compliance date was set for October, 1992. The garage viola- tion was not corrected at that time resulting in a judgment of $9,750 be assessed against the property by the court. Another property maintenance case was initiated in May, 1994 for the garage. This case also ended up in a court action. This case was settled in October, 1995 with a fine of $200 being paid by Mr. Hersey. The property owner is attempting to refinance the property but needs the judgment released before the transaction can take place. The owner is requesting that the City release the judgment in return for a payment of $1,000. An inspection was conducted in November, 1996 to determine the status of the garage. This inspection revealed that the garage is severely deteriorated. An evaluation by code administration staff has determined that the appropriate action would be demolition of the structure. Release of Judgment - 522 Brook St. November 25, 1996 Page 2 It is recommended the judgment be reduced to $1,000 on the condition that the property owner enter into a "code violation escrow agreement" with the City. Under the terms of the agreement, the property owner will be required to place $3,000 in an escrow account to ensure that the garage is either demolished or brought up to code. If the required work is completed by January 31, 1997, the escrow funds will be released. If the work is not completed, the funds will be forfeited to the City. This recommendation represents the best solution to this situation because it allows the property owner to refinance the property and eliminate the garage's code violations . The escrow account will provide insurance that the garage is demolished or repaired. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED None. FINANCIAL IMPACT The City will be relinquishing the judgment. However, the rk City' s claim is subordinate to the mortgage lien and, there- fore, is not likely to be satisfied in any event. The City will establish a $3,000 escrow account to ensure code compli- ance of the garage. LEGAL IMPACT None. ALTERNATIVES There are two alternatives available. The first would be to reduce or release the judgment as requested by the property owner. This would allow Mr. Hersey to obtain his refinancing. If the escrow requirements are instituted, this alternative would also ensure the garage violation is corrected. The second alternative would be to leave the judgment as it stands. This would require the property owner to pay the entire $9,750 amount before the judgment would be released. The City would have to pursue a property maintenance case to get the garage violation corrected. Based on past experience, this would be a lengthy process. RECOMMENDATION It is recommended that the City release the judgment lien filed against 522 Brook Street in return for a payment of $1,000 on the condition the property owner enters into a property maintenance code violation escrow agreement in the Release of Judgment - 522 Brook St. November 25, 1996 Page 3 amount of $3,000 with the City to ensure the garage violation is corrected by January 31, 1997 . Respe fully bmitted, Clay J. arson, Director Code Adm nistration and Neighborhood Affairs kA.) k,,A.A.A.Arrk. 6,1 06 Erwin Jentsch Corporation Counsel `�/gi Ro• -rt . . Malm . Interim City Manager r r 1.