St. Louis Man Invests $137K+ To Buy, Rehab Home, Then Loses It For $6K In Municipal Foreclosure Sale; Says City Failed To Notify Him Of Pending Action

In St. Louis, Missouri, the St. Louis Post Dispatch reports on Mark Siebels, a local real estate investor who bought a burned-out two-family building in south St. Louis for $37,500 four years ago, invested an additional $100,000 to rehab it, and then lost it for $6,000 in a city foreclosure sale triggered by his failing to pay periodic vacant building registration fees. He says he had no clue about the sale, and did not receive any notice thereof.

• Matt Moak, a city attorney in charge of the problem properties unit, said the city foreclosed on the property late last year because Siebels failed to pay a vacant-building registration fee. The city charges the owners of vacant buildings with code violations a $200 fee every six months. Moak was unsure Monday what the code violations were on the Siebels property. The fee is a way to deter investors from leaving land derelict, he said.

• And if the notices are ignored, the property can be foreclosed on.In Siebels' case, the notices — numbering in "double digits," according to Moak — were sent to an address in Jefferson County. But he had moved by then. Siebels acknowledged he should have updated the city with his new address in Kirkwood. But he can't believe an innocent mistake could cost him the property, which he insists he has been maintaining.

• City officials say they deal with hundreds of a properties each year and can't afford to track down homeowners. Many simply don't want to be found. Moak said it's Siebels' fault for not filing the address change, pointing out that notice of the foreclosure auction was published in the Post-Dispatch.

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• Alan Baker, a local real estate attorney, said Siebels could sue to try to turn back the sale of the property. The case would likely hinge on whether the city gave "reasonably calculated notice"(1) that it was foreclosing on his property, he said. "The ultimate answer lies with a judge," Baker said.

For more, see Rehabber puts 4 years into duplex, loses it to city.

(1) The words "reasonably calculated notice" come directly from the U.S. Supreme Court in at least two rulings that voided foreclosure sales in which the foreclosing entity did a miserable job at trying to track down property owners to provide them with notice of the pending actions. See Jones v. Flowers, 547 U.S. 220, 126 S. Ct. 1708 (2006):

• [W]e have stated that due process requires the government to provide "notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections."

citing Mullane v. Central Hanover Bank & Trust Co., 339 U. S. 306, 314 (1950):

• An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. [citations omitted].

Go here for the links to the transcript of the oral argument, and the various briefs filed in Jones v. Flowers, referenced above, filed by the Public Citizen Litigation Group attorneys who successfully represented the improperly-foreclosed-upon homeowner in the U.S. Supreme Court.