Originally published in Western Real Estate Business, October 2012.

The economic downturn has resulted in a record number of foreclosures in California. Many property owners have simply abandoned these foreclosed properties. Adjacent property owners have complained that the abandoned properties’ lack of security and maintenance have resulted in a variety of nuisances and blight of their surrounding neighborhoods.

Affected cities, and some counties, have attempted to combat this problem by placing the burden on lenders to register foreclosed properties with the city or county, and then to comply with ongoing registration and maintenance requirements. Accordingly, lenders need to be aware of whether local ordinances require registration of the real property securing their loans, and whether penalties could be imposed for noncompliance.

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