Should NH pass legislation to combat ‘zombie’ properties?

The real estate market collapse of the late 2000s created a new problem for many communities: so called ‘zombie’ properties, abandoned homes tied up in drawn-out foreclosure processes that visibly decay through lack of maintenance.

Foreclosures take an average of over 650 days to complete, though some homeowners leave their properties earlier on in the game. This can mean that homes are abandoned for two or even three years before the bank takes full legal possession and could potentially sell the property. If not maintained during that time, the property risks becoming blighted, dragging down neighboring property values while attracting crime and vandalism. Alternatively, the burden of maintenance falls on towns and local communities, who often have little resources to spare to shoulder the costs.

In New York, a ‘zombie’ property bill passed earlier this year requires banks and lenders to maintain a property throughout the foreclosure process—not just after the final paperwork has been passed. The law also created an expedited foreclosure process for abandoned homes and required lenders to sell or auction homes within 90 days of taking full possession.

There is currently no move to pass similar legislation in New Hampshire.

Supporters argue the law is necessary to hold banks accountable and protect the interests of neighboring property owners. They also argue that leaving properties to fall into blight removes much-needed stock from the housing market.

Opponents counter that such bills unfairly punish lenders and banks for negligence on the part of homeowners, noting that it is government and legal regulation that often slows down the foreclosure process.