Selling Vacant and Abandoned Properties

Vacant and abandoned properties present a unique set of challenges for personal representatives and estate administrators. Financial penalties, declining property values, and local government intervention can turn a dormant asset into a liability if not handled promptly.

Financial Penalties for Vacant Properties

In Washington, DC, the Department of Consumer and Regulatory Affairs (DCRA) imposes a 5% additional tax on vacant residential properties and a 10% additional tax on properties deemed blighted. These penalties apply annually and can accumulate quickly. Maryland and Virginia have their own provisions for dealing with vacant properties, though the specific penalties vary by jurisdiction.

Why Selling Can Be Difficult

The location and condition of a vacant property often make selling difficult. Properties that have been sitting empty may have developed issues: burst pipes, pest infestations, mold, or vandalism. The longer a property sits vacant, the more it deteriorates, and the harder it becomes to sell at a fair price.

The Personal Representative's Role

If you are a personal representative in charge of an abandoned property or one involved in bankruptcy, selling it may be in your best interest despite the difficulties. The carrying costs of a vacant property, including taxes, insurance, utilities, and maintenance, drain the estate. A sale, even at a reduced price, may be better than the alternative.

Local Government Involvement

Local governments may have additional measures or programs related to vacant and abandoned properties. Some jurisdictions offer tax incentives for rehabilitation. Others impose fines or even initiate condemnation proceedings. Understanding your local government's approach is essential for managing a vacant estate property.

Steps to Take Immediately

If you discover a property in the estate is vacant, take these steps: verify insurance coverage, secure the property (change locks, board windows if necessary), notify the municipality of the vacancy, and begin the process of either preparing it for sale or addressing the issues that make it difficult to sell.

If you are managing a vacant or abandoned property as part of an estate, reach out for guidance. Marc Cormier specializes in selling properties that other agents avoid, and he can advise on the best path forward.