Demolition Plan: The Power of Cities To Destroy Buildings

How does a city deal with an abandoned building creating problems for neighbors?

The Texas Local Government Code authorizes cities to abate nuisances created by substandard buildings if they establish and follow certain procedures. However, in 2012, the Texas Supreme Court ruled that the Texas Constitution requires an “independent court review” of a city’s decision to demolish a substandard building. Therefore, a city could be at risk to pay damages to the building owner if the owner appeals and the court rules that the city’s determination was incorrect. A city ordinance that requires the City to wait 30 days after notifying each owner and lienholder of its determination before demolishing the building could minimize, but not completely eliminate, the risk to the City. The City has two other options to demolish a substandard structure, but neither of them are both risk-free and cost-efficient.

What steps should a city in Texas consider?

Article I, Section 17 of the Texas Constitution provides that “No person’s property shall be taken, damaged, or destroyed for or applied to public use without adequate compensation being made….”

In apparent contrast to that clause, Chapter 214 of the Texas Local Government Code provides that “A municipality may, by ordinance, require the vacation, relocation of occupants, securing, repair, removal, or demolition of a building,” under certain circumstances and after following certain procedures.

In addition, Chapter 54 of the Texas Local Government Code authorizes a city to take certain actions regarding substandard structures.
· Subchapter B, Section 54.018 permits a city to bring a civil action to “compel the repair or demolition of a structure or to obtain approval to remove the structure and recover removal costs.”
· Subchapter C, Sections 54.031-044 allow the city that has implemented the subchapter by ordinance to appoint a “building and standards commission” to hear and determine cases involving violations of ordinances relating to “dangerously damaged or deteriorated buildings or improvements,” and for the commission panel to “order, in an appropriate case, … action to be taken as necessary to remedy, alleviate, or remove any substandard building found to exist.”

The law seeks a balance between a city’s legitimate interest in removing a building that has become a nuisance and the property rights of the owner; essentially, before a city can “take” private property by removing or destroying it, it must follow a number of procedures to ensure the property owner has received “due process.”

A city may remove or demolish a building under Chapter 214 if it does all of the following:

• Pass an ordinance that
  • Sets out “the minimum standards for the continued use and occupancy of all buildings”
  • Provides for giving proper notice to the owner; and
  • Provides for a public hearing to determine whether the building is substandard
• Establish that the building is
  • “Dilapidated, substandard, or unfit for human habitation and a hazard to the public health, safety and welfare,” or
  • Unoccupied and unsecured from unauthorized entry by vagrants or children; or
  • A danger to the public even though secured from entry
• Give proper notice of the public hearing
• Conduct the public hearing – this may be conducted by the city’s municipal court
• Order the owner to vacate, secure, repair, remove, or demolish the building within a reasonable time
• File a copy of the order and publish a notice containing the key elements of the order
• Deliver a copy of the order to all owners and lienholders of the building

If the city determines that a building is substandard, it may also, its option, and after the expiration of time allotted for the owner t

• remedy the situation:
• Repair the building at its expense and assess the expenses against the owner; or
• Assess a civil penalty against the property owner for failure to repair, remove, or demolish the property
• >The city must impose a lien on the building’s land to secure the expenses or civil penalty

That said, in City of Dallas v. Stewart, 361 S.W.3d 562 (Tex. 2012), the Texas Supreme Court ruled that these statutory procedures are not sufficient to justify a “taking” or the destruction of private property by a local government:

Urban blight threatens neighborhoods. Either as a risk to public health or as a base for illicit activity, dilapidated structures harm property values far more than their numbers suggest. Cities must be able to abate these nuisances to avoid disease and deter crime. But when the government sets up a mechanism to deal with this very real problem, it must nonetheless comply with constitutional mandates that protect a citizen’s right to her property.

Today we hold that a system that permits constitutional issues of this importance to be decided by an administrative board, whose decisions are essentially conclusive, does not correctly balance the need to abate nuisances against the rights accorded to property owners under our constitution. In the context of a property owner’s appeal of an administrative nuisance determination, independent court review is a constitutional necessity. We affirm the court of appeals’ judgment, but on different grounds.

The effect of this case on cities’ attempts to remove or demolish substandard buildings under Chapter 214 is significant. After Stewart, even if a city properly identifies the building, provides notice, conducts the hearing, and delivers the order, it could still be subject to a lawsuit and potential damages if the owner appeals the determination of the city (which is exactly what the Stewart plaintiff did).

Stewart’s only saving grace for cities may be this paragraph:

Second, property owners rarely invoke the right to appeal. This may be due to the correctness of the nuisance finding, to the time and expense involved, or to the Local Government Code’s narrow thirty day window for seeking review. See Tex. Loc. Gov’t Code § 214.0012(a) (requiring appeals to be filed within thirty days of order). Or it may be because an unsuccessful appellant must pay the municipality’s attorney’s fees and costs. Id. § 214.0012 (h) (requiring appellant to pay municipality’s attorney’s fees, costs, and expenses, if municipality’s decision is affirmed or “not substantially reversed”).

Section 214.0012(a) does indeed require an “aggrieved” owner to appeal the city’s determination within 30 days after the order. Therefore, at the very minimum, a city should wait at least 30 days after the owners and lienholders actually receive the order before demolishing the substandard building.

However, is that enough to preclude the owner or lender from suing? It is unclear. While the Stewart opinion references the 30-day appeal window, it does not affirmatively hold that failure to appeal satisfies the constitutional requirements before the demolition. The failure of the owner to appeal is not an “independent court review” that the Supreme Court deemed to be “a constitutional necessity.” This specific issue has not been litigated in any Texas appellate court.

There are similar problems with a city creating a building and standards commission under Chapter 54, Subchapter C (which is titled “Quasi-Judicial Enforcement of Health and Safety Ordinances”). Although Subchapter C provides for specific procedures for demolishing a substandard building, just as Chapter 214 does, and even though Subchapter C provides a 30-day window for appeal and that if there are no appeals in the 30-day period, the commission’s ruling is “final and binding,” at the end of the day, the members of the building and standards commission are appointed, not elected, and therefore a determination by the commission would not be the “independent court review” that the Stewart Court deemed to be “a constitutional necessity.”

Therefore, the only current way for a Texas city to be absolutely sure that its demolition of a substandard building would survive constitutional scrutiny is to file an action in county or district court under Chapter 54, Subchapter B, Section 54.018, asking the court “to compel the repair or demolition of a structure or to obtain approval to remove the structure and recover removal costs.” This option, of course, is the most costly and time-consuming, and even the judicial court’s determination would, of course, also be subject to appeal.

Conclusion

A city in the state of Texas has several options available to demolish substandard buildings, but none that are both sure-fire and efficient. The City can follow the procedures in Chapter 214, wait 30 days after the order, and then demolish the buildings. Or the City can pass an ordinance implementing the provisions of Chapter 54, Subchapter C, then follow those procedures, wait 30 days after the ruling, and then demolish the buildings. Either of those option is probably safe and would probably survive a constitutional challenge, but it cannot be certain. Or the City can file an action in county or district court under Section 54.018 for a judicial determination that the building is substandard, then demolish. That option is absolutely safe but time-consuming and expensive.