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STAFF REPORT <br /> Item: Property Liens <br /> Agenda Item:7(b) <br /> Background: At last month's meeting, there was discussion regarding the types of liens and <br /> which ones would be available to the City for use in relation to following through on violation <br /> procedures. The Ordinance amendment discussed contained language granting the City the <br /> ability to record a lien against the real estate that is the subject of a land use enforcement action <br /> for unpaid fees and services. <br /> In general, as the Commission understands, a lien is a claim against specific property. Usually <br /> the claim belongs to a person or business that is owed a debt(mechanic's liens as discussed last <br /> month), and is sometimes called a `security interest'. The lien can be consensual in these cases, <br /> where the property owner agreed to have the lien.The lien can also be involuntary, such as the <br /> type that the City is able to create, but can only be created by a government or entity that is <br /> authorized by law to do so. The rules that govern the different types of liens are varied and do <br /> not apply to every type of lien. <br /> Liens do three things: i. Prevent the owner of the property from selling or transferring the <br /> property unless the lien is paid or addresses in some appropriate manner; 2. If the lien is not <br /> paid voluntarily, the lien enables the person/entity claiming the lien to undertake the <br /> foreclosure of the lien and sell the property to pay the debt owed by the property owner; and 3. <br /> the lien establishes priorities among competing creditors who claim an interest in the property <br /> against which the lien has been claimed. <br /> The City Attorney forwarded the following information regarding liens: <br /> In terms of the different types of liens, there is just the one type of lien (a lien authorized by <br /> State law) for unpaid fees and services. For example, if the City is enforcing a violation of the <br /> Land Use Ordinance,fees and expenses incurred by the City in connection with the enforcement <br /> action that remain unpaid by the offending party could be included in a lien that.would be <br /> recorded against the property that is the subject of the enforcement action.The other example of <br /> a potential lien would be for services related to the review of a land use application.This type of <br /> lien, I expect,would be less likely since the applicant would be required to reimburse the City <br /> before the permit would be issued or the plat signed.The City also has the ability to record a lien <br /> for unpaid services, such as sewer and water, but that would be unrelated to a land use <br /> application. <br /> City of Pequot Lakes Staff Report 4_1 <br /> April i9,2007 <br />