Property management company approved to handle foreclosed homes

Now that the City of Amsterdam has officially taken ownership of approximately 281 delinquent residential properties, common council members voted 4-1 last night to authorize Mayor Michael Villa to sign an agreement with Rivercrest Development Corporation to handle maintenance and the collection of rents on those properties.

Controller Matt Agresta said last week that all the required paperwork for the foreclosed properties had been filed with Montgomery County. At yesterday’s meeting, council members met in executive session to discuss the proposed agreement with Rivercrest.

Before the vote, Alderman Jim Martuscello said that after meeting with members of the codes department, he had concluded, “the city is not, in any type of capable way, of organization of collecting these rents. We don’t even have a department for it.”

When speaking before the council in February, Engineer Rich Miller had also suggested the city hire a property management company.

According to the contract, Rivercrest will be responsible for establishing lease agreements with the renters and will be paid 10% of all rents they collect each month. Additionally, they will charge $26 per hour plus the cost of materials for any maintenance work done by their staff. The contract also allows Rivercrest to evict renters in the case of non-compliance with the terms of the lease, and in that situation would charge the city $26 per hour for administrative work plus the cost of any legal fees.

The contract states that Rivercrest, “will use services of local social service agencies in cases of financial hardship or other circumstances deemed appropriate…Involuntary termination of tenancies will be avoided to the maximum extent consistent with sound management.”

The council approved an amendment to the resolution which stated the approval of the contract was contingent on Villa negotiating on two items in the contract: a lease origination fee of 50% of the first month’s rent on any new tenancy in order to cover the cost of background checks and other administrative work, and the paragraph in the contract dealing with the length and termination clauses of the contract.

Alderman Ed Russo cast the only no vote on the resolution and the amendment. After the meeting, he said in regards to the agreement, “I’m not happy with it because it’s confusing. [Corpoaration Counsel William Lorman] has it under control, but I just think there’s some other things we need to look at. I don’t want to be in the rental business either.”

Russo, said he did not have a copy of the contract in front of him at the meeting at that he did not know how much would be paid to Rivercrest. He said that although he was concerned that the city was now responsible for incidents related to structural problems with the buildings, he did not currently have an alternative idea for handling the properties.

Tim Becker

Tim Becker is the owner of Anthem Websites Inc. which publishes The Compass. He serves as both editor and a writer.