International Falls officials have modified a form used in the city’s demolition program process after a building was demolished last fall without a mortgage release.
City Attorney Steve Shermoen said the issue has never come up in the more than 100 demolitions carried out by the city. But, he said, the city’s forms have been modified as a result.
“All future demolitions will require the written approval of the mortgage holder,” he said. In prior demolitions, Shermoen said homeowners made representations, but were not verified by the city.
“We’re always revising and improving our processes,” said Shermoen. “This has not been a problem up until now, but could be a problem in the future.”
Shermoen said the city is not named as a party or a defendant in any lawsuits over the demolition. However, he said, because the city was involved in the demolition, it may be involved at some point.
Litigation involving the property owner and an insurance carrier is taking place, he said. That litigation involves a loss due to freezing and melting of ice that damaged the building and how much the insurance company should have paid for the damage. Because the city is not involved in the litigation, Shermoen said he does not know the details of the case.
Shermoen said the building had qualified for demolition under the city’s program, in which the city razes structures at no cost to the owner.
The city had contacted the property owner via letter stating that repairs needed to be made or the building could be demolished, said Shermoen. It was determined that the cost of repairs would be excessive and probably exceed the value of the building, he added.
“It was an old property and wasn’t financially feasible to repair, so the property owner signed off and the city demolished it,” he said.
Meanwhile, Shermoen said that previous demolitions have made the “mortgage holder happy” because the demolition is taking place at no cost to them in instances when homeowners have walked away from the property and foreclosures have occurred.
“This program is a benefit to everybody and we’ve yet to run into a situation where the mortgage holder was not as happy to have the demolition as the property owner and city — the benefits are mutual,” he said.
