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Memo Truth In Housing Code CITY OF HOPKINS MEMORANDUM DATE January 15, 1992 TO: Mayor, and City Council FROM: Tom Anderson SUBJECT: Truth in Housing Code PURPOSE: The purpose of this report is to advise the council of staff's progress on studying the issues pertaining to a Truth in Housing Ordinance. Staff is requesting further direction from the City Council to be used in the continued development of the draft ordinance. BACKGROUND: The City Council and staff met in the summer of 1990, to discuss ways to improve the inspection department's image in the community. We also discussed the various codes the department enforces, and as a result of the discussions, the City Council requested the department look into the preparation of a Truth in Housing Ordinance similar to Minneapolis to be applied to all one and two family dwellings sold in the city. A draft Truth in Housing Code was prepared and brought back to the City Council in December of 1990. This plan included combining the existing certificate of occupancy inspection program, rental registration ordinance, and the Minneapolis Truth in Housing Code into one new city code called the "Rental Registration and Truth in Sale Code". The city Council provided specific direction to the staff and the ordinance was re-drafted to reflect that direction. The staff took the newly drafted proposal to the community to solicit input. An article was run in the local newspaper and the Southwest Community News carried a story requesting public . comment. The staff also presented the draft to the Hopkins Business Council, and two public meetings were held. Invitations were sent to the local Realtors and to the City neighborhood. association presidents inviting there comments. An article requesting comment was also published in the Realtors magazine. Mayor, and City council Page 2 January 15, 1992 The staff has taken the comments received from the public and City attorney and re-drafted the Truth in Housing Ordinance. The current draft. of the Truth in Housing Code no longer contains the provisions of the certificate of Occupancy inspection program or the Rental Registration program. Those documents continue to stand alone and will be brought forward separately for their further revision. This was done'because of comments both from the public and from the City Attorney that confusion was created by the mixing of the separate ordinance provisions. The new Truth in Sale draft has not changed drastically, except for the separation of the ordinances. The new Truth in Sale draft stands alone and contains the following provisions: o Persons o~ning and wishing to sell a one, two"three, or four family dwelling, including condominiums and townhouses, within the city of Hopkins, would be required to hire a certified, 3rd party housing evaluator. This certified housing evaluator would be required to provide to the City, prior to the sale, a Truth in Housing Disclosure Report Form and a Truth in Housing Zoning Report. o The ordinance still contains a 30+ page certified evaluator guideline document. This document sets forth ,the information that must be provided by the certified evaluator and assists him in determining whether items he identifies in the dwelling meet the city requirements, do not meet the City requirements, or are determined to be hazardous. o The new draft still requires that items marked as haz- ardous by the certified evaluator, be corrected prior to sale. New language, requested by ,the public, was added that would allow the buyer of the property to accept the responsibility for making correction of the hazardous items. The buyer could accept responsibility for making 'the repairs, provided the building remains vacant until the items are corrected and upon receiving the written consent of the housing inspector. Under this circumstance, the buyer would be required to provide a financial guarantee and evidence of a reasonable completion date acceptable to the. Inspection Department. o The new draft also includes a warranty disclaimer clause on behalf of the city stating the City does not warrant or guarantee the safety, fitness, or stability of any building in the City. Mayor, and City council Page 3 January 15, 1992 o The new draft still contains a requirement that the certified evaluator carry a current unexpired certificate of Competency card as issued by the city of Minneapolis or st. Paul. It further requires that the evaluator provide proof of general liability insurance in the minimum amount of $250,000 general aggregate and per occurrence. The evaluatior must also carry errors and omission insurance with a minimum liability of $250,000, which may include a deductible of not more that $5,000. The city must be included as a named insured on the insurance policy~ o Fees are not included in this draft, and will be brought forth at a later date. It is anticipated that the fee for filing of a Truth in Sale Report will be somewhere in the neighborhood of $15-$25. Supportina Information o Copy of draft Ordinance. CITY OF HOPKINS . EFFECTIVE DATE .~ CHAPTER 406 TRUTH-IN-SALE CODE 406.01.Definitions. Subdivision 1. For the purpose of this chapter, the following terms shall mean: Subd. 3. "Dwelling unit" means a singl living. space or quarters consisting of bathing, food preparation and consump purposes. Subd. 2~ "certified Evaluator" means an indivi current Certified Evaluator Certificate as iss Hopkins and has proved competency by having a certificate of competency as issued by the c' City of st~. Paul,and who has a current ins as required in section 405.08 Subd. 8, and in chapter X. . Subd. 5. "Owner" or "person" operates or manages by deed 0 any premises; the term include selling , renting, leasing, or 0 premises, including a guardian, a other. agency acting for the owner; committee supervising ,p . . ng or m other common. building a lling owners association, or t owns occupies of conveyance or lease yed for the purpose of eying or managing such r, executor, trustee or term includes a person or nt ining any cooperative or ,or any condominium unit etaker or manager. ' Subd. 6. "Purchase deed,lease for a p instrument of tra premises; the ter solely for perfec n agreement, contract for deed, five years or any other of residential or commercial ethe transfer of a document made Subd. 7. "Time executed by t prior to th a single, subd. when a ~ritten purchase agreement is he absence of a purchase agreement, document p:oviding for the conveyance of .' 8. "Tr closure Report". The written and signed, evaluation evaluator, made on a form described in Section 405.0 representing to the actual buyer of the dwelling evaluate said person has utilized the care and 'diligence reasonabl nd ordinary for one .meeting the code of ethics and procedural guid ines for evaluators as established by the city, and has found no instances of non-compliance with the items contained on said form as of the date thereon except as specifically designed . thereon. -'Subd.9. "Truth-in-Housing Zoning Report". The written and signed zoning evaluation by the city Zoning Administrator made on a form containing the zoning information required in Section 406.02 Subd. 7 . Subd. 10. "Residential premises" means any buildings and any .. ancillary structures in connection therewith intended or used for residential purposes including single or two family dwellings,condominiums,multiple residential dwe1lings,cooperative residential units. Slibd. 11. "single or Two Family dwelling" means any building containing one or two dwelling units, regardless of whether they are owner or Non-owner occupied. ' e- 406.02.Truth in housing disclosure. Subd. 1. Required. No owner or agent of the pwner shall sell by conveyance or contract for conveyance a single family, two-family, three or four family dwelling,including condominiums and townhouses, within the city without providing to the buyer, prior to the time of sale, a truth in housing zoning report and a Truth-in-Housing Disclosure Report as described in section 406.02 Subd. 9 relating to said dwelling or premises, issued within one (1) year preceding the time of sale. Subd. 2. Owner disclosure. The Truth-in-Housing Disclosure Report, shall contain a statement signed by the owner as to any damage to the dwelling or its contents by flooding, or sewer backup due to flooding, and also any evidence of chronic water seepage of which the owner has experience or knowledge. The Truth in Housing Disclosure Report is not deemed valid without the aforementioned signed statement. Further, no owner or agent of the owner shall sell such dwelling without providing to the buyer a statement of the nature, extent and cause of any water seepage or flooding of any portion of the property within the knowledge of the owner. Subd. 3. No certified evaluator shall allow said certification to be used by another person. No person shall fill out a Truth-in-Housing Disclosure Report on the form prescribed in section 406.02 Subd. 7 of this.chapter to be used as a disclosure document as set out in Section 406.02 Subd. 1 without first obtaining and maintaining a Certified Evaluator Certificate from the city as provided for in this chapter. Subd. 4.' Resale of dwellings. A new truth in housing disclosure report shall be required for each change of ownership or time of sale. Subd. 5. Availability of Documents. NO,person licensed by the State of Minnesota to sell real estate shall offer for sale by exhibiting or showing any one, two, three or four-family dwelling, condominium or townhouse, withirithe City without first having obtained the documents as set out in Section 406.02 subd. 1. The report as set out in section 406.02 Subd. 1, shall be made available'for inspection at the premises for which they pertain at all times that such dwelling is being offered for sale. e Subd. 6. Exemptions. The provisions of the Chapter shall not apply to the sale or conveyance of any single, er tWO-family, three-family, or four-family dwelling to a public body nor to any newly constructed dwelling when title is transferred to the first owner Subd. 7. Forms. The city shall prepare or authorize the use of form or forms as it may deem appropriate to constitute a disclosure under section 406.02. The form shall provide information concerning code " :( requirements applicable to existing single, two-family, three family, four-family dwellings, condominiums and townhouses which, when not complied with, constitute a major structural defect or an immediate danger to the health and safety of the occupant. The information provided shall indicate whether the condition meets city requirements, is below city requirements , or is deemed to be hazardous at the time and date of the evaluation. In making the evaluation, it shall be assumed that any concealedfacili ties and installations that are not viewed are adequate,based on the functional operations of the facilities and installations and the condition of the equipment that is viewed. No warranty is expressed or implied.In completing the form, the evaluator shall be governed by and follow the. code of ethics and guidelines of procedure for evaluators as amended from time.to time by the city Council. The form shall also include ~the signed statement by the owner or agent of the owner as to whether or not there are housing orders pending regarding the property issued by the Department of Inspections, City of Hopkins. The form shall also include a determination whether the present occupancy . is' conforming or nonconforming, and shall also show the present zoning of.the dwelling..! If nonconforming occupancy is claimed, such nonconforming use shall be verified by the city Zoning Administrator in writing. The form shall also require disclosure by the owner of the dwellin9's homestead classification in.. regard to real estate taxes pi;lyable. The owner shall provide a copy of such written verification to the huyer prior to the closing or finalization of transfer of ownership or.the.buyer's signing of any contract for deed. Nothing in said report s~all indicate, or shall be deemed to indicate, that said dwelling meets all minimum housing standards. .- .~ SUbd. 8. certified Evaluator Certificate. No Certified Evaluator certificate shall be issued or renewed by the. city ofJIopkins without application on the approved form and proof that the applicant has a current unexpired certificate of competency as issued by the city of Minneapolis or the city of st. Paul. The apPlicant shall also show proof of general liability insurance insuring the applicant with a minimum limit. of liability of two hundred fifty thousand dollars ($250,000) general aggregate-and per occurrence and errors and omissions insurance with a minimum limit of liability of two hundred fifty thousand dollars ($250,000) which may include a deductible not exceeding five thousand dollars ($5,000) and the evaluator shall maintain insurance continuoUsly in force thereafter and no certification of evaluator shall be deemed to be ill effect when such insurance is not in effect. The city shall be included as a named insUred on the insurance required herein at the expense of the evaluator. The evaluator shall fUrnish the city with. a certificate of insurance which meets the 'city requirements.The applicntshall also pay the fee as set forth in'chapter 10. Subd. 9. Fees for certificates and renewals The holder of a Certificate of Competency and proof of insurance as set forth in this chapter shall, upon payment of a renewal fee asset in chapter X ~annually, have said certificate renewed for theens\ling year. A holder of a certificate shall not allow said certificate to be used by another person. \.e Subd. 10. city employees not to be certified. No employee of the City shall .becertified under this Chapter. . ~ubd 11. Residency or mailing requirements. Any person certified under this Chapter shall cause to keep registered with.the city, his current residency, or mailing address. Subd.12. Report filing and filing fees,. Each Truth-in-Housing Evaluator shall supmit to the city housing inspector an exact duplicate or copy of each Truth-in-Housing Disclosure Report within ten (10) days after the evaluation inspection has been made. The exact duplicate or copy r~quired by this section, shall be of the final report, either type written or legibly printed in ink, as furnished to the seller. A filing fee of as S(3t in chapter X, shall be required with each evaluation report so submitted to the inspector. When said Truth-in-Housing Disclosure Report is not filed, or the , required filihg fee therefore is not paid, within the ten (10) daytime limit set forth in this section, then the fee for such filing of the required report Shall be doubled. Further, failure to comply with the provisions of this section within the aforesaid time limitations may be just cause for the to revoke the Certification of the evaluator. . Subd. 13. Mandatory correction of hazardous items.Itemsmarke~ as hazardous by the certified evaluator shqll be corrected promptly as designated in such order and the premises shall be subjectt inspectio by the housing inspector prior to sale and occupanoyofthe dwelling. Correctionsnecessitate~ by the report of the evaluator may be , t' " under aken and performed by the buyer deslgnated lna,Purchase Agree- ment or by the owner of the property but in either event, the property shall remain unoccupied until such violations 'are correcte{l and an inspection 'conducted by the housing inspector. Such corrections may be undert,aken Q.y a buyer only upon the written consent of the City Housi~gInspector and subject tpsuch terms and,conditions as may.be required,by,the Inspection Department which shall include financial evidence of qbilityand reasonable completion dates acceptable to the Inspection, Department. ' . 406.03 Certi~icates: reports; truth inhousing,reports and filillgs. Reports,certificates, and filings shall be kept in the office of the housing inspector. A copy may be furnished to the owner or other authorized person upon request. 406.04. Appeals. A person aggrieved by a truth in housing disclbsure report may appeal from the action of the evaluator or inspector to an appeals board,appointed by the council and consisting of three members of the citycouncil.Thedecision,and order of the appeals board shall be binding 'on, all parties. 406.05. Pepalties. 'A person who violates any of the terms of this code or who fails to comply with any order iSSUed by the housing inspector pursuant to this code is'guilty of a misdemeanor.Each day the owner fails to comply,with any such order shall constitute a seperate offence. The inspector may post the premisis by approrate signs on notices prohib~ting occupancy and may, by approriate action, cause the premisis to be and remain vacant until such code violations are remdied and an approval certificate is issued. 406.06. Warranty Disclaimer on behalf of the city. By enacting and undertaking to enforce this section, ne,ither the City nor its council, agents or employees warrant orguareentee the safety, fitness or suitability of any dwelling in the city, and any representation to the contrary by any person is a misdemeanor. purchaers or occupants should ;fl.' ... ~take whatever steps they deem approrate to protect their intrests, health, safety and welfare prior to purchase or occupancy of the dwelling. . . . ----~- ~-- -~------ ~- .