A new state law meant to combat the blight of "zombie" homes across New York lacks effective enforcement to hold banks accountable for actually maintaining the properties on Staten Island.
The law requires banks and mortgage providers to maintain vacant and abandoned properties they have notes on or risk a $500 daily penalty — even before foreclosure proceedings are over and they officially own the deed.
At least 500 properties on Staten Island are covered by the regulations, out of roughly 2,300 in all five boroughs and 20,000 across New York State, officials said.
But the state doesn't send anyone to inspect these properties, relying instead on self-reporting and photos from financial institutions and information from municipalities like the city of New York.
The state's Department of Financial Services hasn't issued a single penalty against a bank or mortgage provider for failure to maintain and secure a property, more than a year after the law requiring this upkeep was signed and eight months after it went into effect.
"This program is in, unfortunately, is in its infancy stages," Alphonso David, the counsel to Gov. Andrew Cuomo, said.
'It's going to end today'
The law was intended to prevent foreclosures and lessen the impact of neglected and abandoned properties on communities across the state. So-called zombie homes are typically in foreclosure, though others that aren't covered by this law may be left vacant and in disrepair by landlords and other private owners or family estates.
Neighbors say zombie homes risk public health and safety, decrease home values and worsen quality of life.
"I'm tired of having homeowners pay for the profits of banks," Cuomo said before signing the state law in June 2016. "It ends and it's going to end today in the state of New York."
What's in the law
Part of the law focuses on foreclosure prevention. There were about 820 foreclosure cases commenced on Staten Island last year, according to preforeclosure data provided by state.
The other measures are aimed at financial institutions, imposing a "preforeclosure duty" to maintain on banks and mortgage providers that didn't previously exist.
They must also inspect properties within 90 days of a delinquency. The properties are considered "vacant and abandoned" if three consecutive inspections 25 to 35 days apart and at different times of the day shows no signs of occupancy.
Banks and mortgage providers then self-report these properties to the state Department of Financial Services, or DFS, which is required under the law to keep a registry of them.
DFS has the authority to bring court actions against a noncompliant bank and levy a $500 daily fine — but hasn't done so once.
'Broad compliance from the banks'
State officials said that the law is still new and that properties must be three months delinquent and another few months vacant to be covered.
"We've actually received, you know, broad compliance from the banks and the servicers when we received a complaint about a particular property — again, in the short time frame when the law has been in effect," Financial Services Superintendent Maria Vullo said.
State officials struggled to explain exactly how they determine banks and mortgage providers are complying with the maintenance requirements.
DFS doesn't send someone to inspect properties in the state's registry. State officials initially said compliance is determined based on complaints from New Yorkers, local authorities and information from banks and mortgage providers.
David eventually explained that regulations require quarterly reporting. Banks and mortgage providers must tell the state when they inspect a property, when any maintenance is done and provide documentation to prove the work has taken place.
"The state is not simply accepting someone's word for it," David said.
Banks and mortgage providers have one to two weeks to fix any problems. Since the zombie registry went online in February, officials said DFS has compelled financial institutions to perform maintenance on 260 properties statewide.
West Brighton zombie home as example
The state used quarterly reporting for 177 North Burgher Ave. in West Brighton as an example of how this system works.
The home is one of more than 150 suspected zombies in the borough that Staten Islanders have reported to the Advance.
On June 20, several windows on the home there were open and the lawn was trashy and overgrown. By July 25, the overgrowth increased, one window had shattered, the front door disappeared and squatters appeared to be living there. A thick bamboo forest has also been growing in the backyard for a few years.
"Would be a nice house if someone took care of it," neighbor Bob Heath said of 177 North Burgher Ave. in June.
It's unclear how many other properties reported to the Advance are covered by the law.
The state registry isn't public because the properties could become targets for squatters or criminal activity. The presence of squatters actually removes a bank's responsibility over maintenance because then the property isn't unoccupied.
State working on enforcement plan
The state said DFS confirms information provided by financial institutions by contacting local municipal agencies. Smaller cities may not be able to verify each complaint, but New York City has several large departments with inspectors.
State officials initially said that the law wasn't intended for DFS to assume the role of code enforcement and the agency doesn't have the staff to do this.
David later said there's nothing that prevents the state from creating a system to verify complaints themselves, but that officials don't want to duplicate existing services. He said DFS is developing a "broad, strategic enforcement and outreach plan" with localities to make sure there's uniformity in enforcement.
He added that he plans to follow up with DFS "to make sure that they are enforcing the law in the way that we've envisioned."
"It's all new, so I think that's part of the reason that you've gotten conflicting information," David said.
'Up to the local government'
State officials have also pointed out that the law gives individual cities the power to bring a court action or levy a fine, too.
State Sen. Diane Savino, who pushed for the legislation with the Independent Democratic Conference, acknowledged the law requires the active participation of local authorities.
"It's up to the local government to take action," she said. "We're allowing the banks to almost self-certify...the state doesn't have the authority or the entity to go out and inspect."
New York City was recently awarded a grant that will be used to help create a database and system for tracking vacant and abandoned properties. This is intended to, at least in part, help the city coordinate with the state.
The Advance will explore more of the city's role in another article later in this series.
"We have responsibilities around the housing maintenance code — those are our responsibilities," said Leila Bozorg, a deputy commissioner at the city Department of Housing Preservation and Development. "We propose to use this grant to solve some of the complicated issues here, but there's nothing in that state law that says it is the city's responsibility to enforce anything."
