SW Legal studies in Business

Organization Had Right to Take Possession of Empty House and Rehabilitate It
Description

Appeals court held that an organization acted properly in requesting to take possession of a house that had been empty for more than six months, so that it could rehabilitate the house. A state law provided such right of action. The bank that owned the house would compensate the organization for the repairs it did to the house.

Topic Real and Personal Property
Key Words

Vacant Property; Seizure; Nonprofit

C A S E   S U M M A R Y
Facts

Urban Renewal of Kansas City (Urban) petitioned a court on December 11, 2006, for temporary possession of a foreclosed home so as to rehabilitate it, as provided by state law. The owner of the property when the petition was filed was listed as Equicredit. Equicredit filed a motion to dismiss the petition because neither it nor the individual owner of the house held any interest in it after the property was sold at foreclosure sale on November 30, 2006. It argued that the present owner, the Bank of New York, was not a party to the action. The trial court refused to dismiss the suit. On July 6, 2007, Urban asked the court to be allowed to enter the property so it could develop a rehabilitation plan. The hearing was set for August 2, 2007, and Urban presented a petition for temporary possession of the house for rehabilitation purposes. Equicredit opposed the request, stating that it would rehabilitate the house. The court held for Urban as having the best plan for the property. On October 31, 2007, the bank, as Equicredit’s successor in interest in the house, petitioned the court for restoration of the property to it. It declared its legal ownership and desire to rehabilitate the house. Urban filed rehabilitation reports on December 4, 2007 and on March 4, 2008, at which time it sought to become owner of the property through a motion for a sheriff’s deed. The court held another hearing. It held that the property would be restored to the bank, but that it would compensate Urban $114,439 for the work it had done on the house. The bank appealed, contending that the house should never have been turned over to Urban and that the expenses were too high.

Decision

Affirmed. Urban established that the property had been unoccupied for six months, as required by law, for it to be eligible for possession for restoration purposes. The bank had been the owner for only eleven days before Urban’s request, but that did not affect the tolling of the time in which the house was empty. The expenses incurred by Urban, an organization qualified by law to make such improvements on vacant property, were reasonable, and would be compensated by the bank, the owner of the house.

Citation

Urban Renewal of K.C. v. Bank of New York, ---S.W.3d--- (2009 WL 1045015, Ct. App., Mo., 2009)

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