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Town has plan for neglected properties; would Maryland follow suit?

The subject of eminent domain does not come up often, but local governments may be using it more often in the wake of the real estate bust. With the commercial real estate market still struggling, communities are looking for ways to kick start troubled properties, from single business sites to strip malls.

Maryland counties may not follow the lead of other states by condemning abandoned or neglected properties when efforts to work with landlords fail. It all depends on how officials interpret state eminent domain laws. In those other states, though, commercial landlords and property owners could soon find themselves embroiled in condemnation proceedings.

A recent news story discusses two properties that the city council would like to redevelop. In that state, a local government can declare a property in need of redevelopment; the municipality can then opt to take over the property -- if it is abandoned, unsafe, dilapidated or the like -- or can invite the landlord to collaborate on rehabilitating the site.

One property has been sitting empty since 2008; another has steadily lost tenants and is about to lose its anchor store. According to one town official, both landlords are "slumlords" and need to go.

The single-tenant property was a diner, open for nearly 50 years. Problems started a year before it closed for good; unpaid utility bills had led to power shut-offs and temporary closings while the owners settled their debts. Tax bills mounted, too, and the business was just not viable anymore. The town was sad to see it go, but officials are frustrated now -- four years later -- that not much has been done to sell the property. Hence, several council members are taking the "if they won't do it, we'll do it for them" approach.

We'll finish this up in our next post.

Source: Phillyburbs.com, "Evesham to crack down on owners of neglected commercial properties," Todd McHale, Nov. 25, 2012

Our firm works with businesses on real estate issues similar to the one discussed in this post. You can learn more about our Annapolis, Maryland, practice by visiting our real estate litigation page.

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