CHICAGO-A city law that takes effect Sept. 18 requires lendersto take over and maintain vacant, attended residential andcommercial properties. Some local attorneys say this goes againstaccepted property rights and predict legal challenges are comingsoon as lenders fight to prove they own only loans and don’t haverights to the property until the site is foreclosed.

The amendment to the municipal code, which passed CityCouncil on July 28, changes the definition of mortgagee toconsider the lender as an owner of the property, and thus liable tomaintain the property. The code is directed at both residential andcommercial properties.

According to the amendment, a lender can be forced to takeremedial action on a property if the site is just vacant, and noteven in foreclosure. Though cities such as Miami, Boston andCincinnati have enacted similar laws, these do not go as far todefine a lender as an automatic owner.