Land banks 101
What is a Land Bank
Land banks are governmental or nonprofit entities that are focused on the conversion of vacant, abandoned, and tax delinquent properties into productive use. They are designed to acquire and maintain these distressed properties and then transfer them back to new responsible owners and productive use. Land banks have special powers (granted by state statute) that enable them to undertake these activities more effectively and efficiently than other public or nonprofit entities.
The ECLBA can obtain properties through numerous channels including donations or purchases, in addition to reviewing available tax-foreclosed properties for purchase through the County’s first right of refusal option.
Foreclosure & First Right of Refusal Process:
When an owner doesn’t pay property taxes for three years, the county treasurer forecloses on the property. Foreclosure is final and the prior owner has no redemption rights.
First Right of Refusal starts at the State level. Once the county has foreclosed on a property, the state can purchase it at fair market value. Should the state pass, the local unit of government (city, township, village) has the opportunity to purchase the property for a public purpose at the cost of unpaid taxes & fees. If the local unit of government passes, the county has the option to buy it for the cost of unpaid taxes & fees. Emmet County adopted a resolution to allow the ECLBA to exercise it’s option for any properties the County Board was not interested in. If no unit purchases the property, then it goes to a public auction.
Land Bank Legislation
Typically, land banks are created as public entities by a local ordinance, pursuant to authority provided in state-enabling legislation.
The Emmet County Land Bank Authority was created by the Emmet County Board of Commissioners via resolution, at their monthly board meeting of February, 2009, pursuant to 2003 P.A. 258, MCL 124.773(4). The Authority is comprised of seven (7) members representing specific groups: Treasurer, County Administrator, one member of the County Board of Commissioners, the Planning and Zoning Director, plus three members of the general public.
In 2003, the State of Michigan passed the Land Bank Fast Track Act, which authorized land banks to strengthen and revitalize the economy by assembling and using public property to promote economic growth and to clear titles in an expedited manner. The state has also passed legislation to help land banks cover costs associated with 90-day Quiet Title services for property held by the authority. This service assists in acquiring marketable title.