TO: Mayor and City Council
THROUGH: Krishna Namburi, Interim City Manager
FROM: Kristin Retherford, Community Planning and Development Director
SUBJECT:
title
A proposal to establish a limited duration Lien Forgiveness Program authorizing the City’s Health Officer to forgive liens in the City’s Lien Docket resulting from unpaid civil penalties and derelict structure fees for violations of the Property Maintenance Code if all Property Maintenance Code Violations on the property are corrected.
end
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
Result Area(s): Good Governance; Safe and Healthy Community; Welcoming and Livable Community.
SUMMARY:
summary
The proposal establishes a limited duration Lien Forgiveness Program authorizing the City’s Health Officer to forgive liens in the City’s Lien Docket resulting from unpaid civil penalties and derelict structure fees for violations of the Property Maintenance Code, if all Property Maintenance Code Violations are corrected. This action serves the public interest by incenting property owners to restore or repair their property. The proposal also promotes community livability by reducing barriers to the transfer of properties to new owners by removing liens for remediated properties or allowing for subrogation of liens when the new owners agree to correct the code violations.
end
ISSUE:
Shall City Council adopt a Resolution 2025-25 establishing a limited duration Lien Forgiveness Program authorizing the City’s Health Officer to forgive liens in the City’s Lien Docket, and the associated penalties, fees, and interest, resulting from violations of the Property Maintenance Code, if all Property Maintenance Code violations on the property are corrected?
RECOMMENDATION:
recommendation
Adopt Resolution 2025-25 establishing a limited duration Lien Forgiveness Program authorizing the City’s Health Officer to forgive liens in the City’s Lien Docket, and the associated penalties, fees, and interest, resulting from violations of the Property Maintenance Code, if all Property Maintenance Code violations on the property are corrected.
body
FACTS AND FINDINGS:
Salem Revised Code Chapter 50, Property Maintenance Code, establishes minimum requirements and standards for structures and premises. The Property Maintenance Code serves to promote the protection of life safety, and for safe and sanitary maintenance of residential and nonresidential premises within the City. It is the policy of the City to work with property owners to obtain voluntary correction of Property Maintenance Code violations. However, monetary civil penalties and derelict structure fees are imposed in certain situations including where the violation was knowing or intentional, a repeat of a similar violation, or attempts to obtain voluntary correction of the code violations are unsuccessful.
Unpaid monetary civil penalties and derelict structure fees are placed in the City Lien Docket where they may accumulate additional penalties, fees, and interest. City Staff has received communications from impacted property owners that the financial burdens of the liens inhibit their ability to pay for rehabilitating their property, especially where the property owner is on limited or fixed income.
Civil penalties and derelict structure fees in the City lien docket should be paid in full before property ownership may be transferred or before properties may be used as collateral for rehabilitation loans, however, it’s not uncommon for properties to transfer ownership without the liens being identified or settled through the transaction. City Staff have received communications from potential purchasers that the amount of the liens is a barrier to purchasing the property and from past purchasers who have discovered the existence of the liens. The more distressed the property the more of a barrier the liens are as the property condition reduces the property’s value and at the same time the purchaser will have higher costs to correct the code violations.
The financial implications of the liens in the City’s Lien Docket resulting from violations of the Property Maintenance Code may inhibit property owners from rehabilitating their properties or potential new owners from purchasing the properties. This works against the City’s goals of Good Governance, Safe and Healthy Community, and Welcoming and Livable Community. Staff regularly receive complaints from neighboring property owners and community members regarding distressed properties. These are frequently the same properties that have acquired substantial lien encumbrances resulting from the Property Maintenance Code violations.
As of August 25, 2025, there were three-hundred and twenty-one (321) liens for unpaid civil penalties and derelict structure fees listed in the City Lien Docket resulting from Property Maintenance Code Violations. The combined amount of civil penalties and derelict structure fees, fees and penalties for late payment, and accruing interest secured by all liens is $810,104.43. The 321 individual civil penalties are distributed among 72 separate properties and range from $50.00 to over $192,000. Of the 321 liens, Code Compliance records indicate that at least 52 of the code compliance cases have been closed because the Property Maintenance Code violations have been corrected. These properties represent $509,999.89 in penalties, fees, and interest, as of August 25, 2025, which would be eligible to be forgiven under the Lien Forgiveness Program.
The Lien Forgiveness Program will promote the City’s goals by incentivizing property owners to voluntarily address longstanding Property Maintenance Code violations. Participation in the Lien Forgiveness Program requires:
- Lawful authority over a property with liens in the City’s Lien Docket for civil penalties resulting from violations of the Property Maintenance Code, SRC Chapter 50;
- Submission of an application to participate in the Lien Forgiveness Program; and,
- Agreement to correct all Property Maintenance Code violations on the property before the program concludes on June 30, 2026, and to do so in a lawful manner.
Upon correction of all Property Maintenance Code violations on the property, the City’s Health Officer will authorize the forgiveness of the liens, and associated penalties, fees and interest. If the violations have already been corrected the liens, and associated fees and interest, will similarly be forgiven. If all Property Maintenance Code violations on a property are not corrected prior to the end of the program, the liens will remain and penalties, fees, and interest, will continue to accrue.
Code Enforcement staff conduct monthly inspections of properties with Property Maintenance Code violations until the violations are corrected. It is anticipated that participation in the Lien Forgiveness Program will reduce the number of inspections for the property, thereby reducing costs to the City. Consequently, Staff are not recommending a fee be imposed for participating in the Lien Reduction Program.
In addition to the Lien Forgiveness Program, City staff are exploring other ways to incentivize voluntary correction of Property Maintenance Code violations to avoid liens being placed on the property.
BACKGROUND:
The City of Salem requires all property owners to maintain their properties in compliance with the minimum property maintenance and housing standards established in Salem Revised Code (SRC) Chapter 50. - Property Maintenance. The City’s Health Officer, along with enforcement officers, are tasked to investigate violations of the Property Maintenance Code and encourage property owners to voluntarily correct any violations.
Property owners who fail to correct Property Maintenance Code violations are issued an Enforcement Order, with civil penalties not to exceed two-thousand dollars ($2,000.00) per violation. SRC Sec. 20J.180 requires civil penalties that remain unpaid for thirty (30) calendar days be entered in City Lien Docket. Thereafter, if the Property Maintenance Code violations have not been corrected, a new civil penalty is imposed for each violation that remains, and the process repeats itself until the code violations are corrected.
The City’s Lien Docket is maintained in the Finance Division in accordance with SRC Sec. 21.060. - Docket of city liens.
Mitch Nickolds
Compliance Services Manager
Attachments:
1. Resolution No. 2025-25
2. Attachment A to Resolution No. 2025-25