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Foreclosures leave erosion problems

Finding responsible party for damage not always easy

POSTED: November 30, 2008 5:00 a.m.
TOM REED/The Times

This is an example of erosion in the abandoned Greenleaf subdivision in Forsyth County. Two men involved in the Greenleaf project were convicted of a mortgage fraud scheme about a year ago. The subdivision reportedly has accumulated millions of dollars in county fines for not complying with erosion control rules.

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The foreclosure crisis has been devastating to the U.S. economy, and now it appears the environment is suffering as well.

Bert Langley, manager of the Georgia Environmental Protection Division’s Mountain District in Cartersville, said he’s seen numerous cases where a developer or builder abandoned a property, leaving no one to monitor erosion control at the site.

"It’s a situation we’ve never dealt with before," he said. "We have cases where massive amounts of sediment are going into streams."

Normally, once the EPD becomes aware of a problem, an inspector visits the site and notes any violations. A consent order is then issued, requiring the responsible party — usually the developer — to correct the problem and sometimes pay a fine.

But now, it’s difficult to figure out who’s in charge. "From a regulatory standpoint, it’s a very confusing set of circumstances," said Langley. "The former owner is often in bankruptcy and the chance of recovering any money is very slim."

If the property is already foreclosed on, the bank assumes responsibility.

"But the bank may have no record of what’s been done on the site," said Langley. "And the EPD in general will not be looking for a bank to pay a fine for something they didn’t do. Our main interest is getting the site into compliance."

Environmental attorney Jimmy Kirkland said the situation is creating yet another headache for banks.

"It’s an issue that all lenders are facing now, having to take back properties that are partially constructed," he said. "Banks aren’t accustomed to dealing with environmental permits. They need legal advice, but they also need assistance from consultants on developing plans for stormwater and erosion and sedimentation control."

Kirkland was hired by BB&T to help the bank handle this issue. "The banks now own lots of properties that I’m sure they wish they didn’t," he said.

Environmental problems occur when a developer clears and grades a property, but then abandons it before most of the construction is done.

"A lot of these sites are on very steep terrain, and it’s a constant battle to keep things maintained," said Langley. "Silt fences need to be cleaned out. Sediment ponds need to be re-excavated."

Hall County building official Lamar Carver said there’s less environmental harm if most of a subdivision’s infrastructure and homes have been completed.

"Most developments in Hall were not at the early grading process when they halted their plans," he said.

Like most of Georgia’s larger counties, Hall has its own issuing authority for land-disturbance permits and can levy fines through the code enforcement department and magistrate court.

In small rural counties, enforcement of erosion and stormwater regulations is handled by the EPD.

Carver said when there is a problem, enforcing the erosion rules can be difficult. "Our main tool is the stop-work order, but it doesn’t do any good if nobody is working," he said.

Hall County planner Pete Fletcher said it helps if the developer makes sure the site is in proper condition before withdrawing from a project.

"You’re not allowed to leave dirt exposed for more than 14 days without a permanent vegetative cover," he said. "Usually they tell us they’re going to have to shut it down and they work with us."

Fletcher said officials also try to prevent erosion by not allowing hundreds of acres to be graded and cleared all at once.

"The engineering department prefers a phased grading plan, usually no more than 20 acres at a time," he said. "It’s hard to prevent runoff if the site is larger than that."

Overall, the foreclosure crisis has had less impact in Hall than in some other parts of Georgia. Most of the foreclosed or abandoned subdivisions are located in sprawling metro Atlanta counties such as Clayton, Gwinnett and Forsyth.

"We’ve got 30 or 40 foreclosed subdivisions, but only two have ongoing environmental issues," said Simon Wilkes, senior soil erosion inspector for Forsyth County. "One is Greenleaf, on Ga. 53 near the Forsyth/Hall line. The other is the Overlook at James Creek."

Wilkes said the owners of those properties have claimed to be bankrupt but have not entered into foreclosure. A site only becomes the bank’s responsibility once it is foreclosed on.

"We can’t get the developers or the banks to go out and take care of the property," said Wilkes. "(The developers) refuse to foreclose. They’re just letting it sit in limbo. They don’t want to spend the money to stabilize it."

Two men involved in the Greenleaf project were convicted of a mortgage fraud scheme about a year ago. Only a few homes were ever built, and a judge declared them "uninhabitable" and subject to condemnation. The subdivision has reportedly accumulated millions of dollars in county fines for not complying with erosion control rules.

Wilkes said Forsyth officials haven’t been able to fix that mess, but they are trying to prevent any similar situations from occurring in the future.

"About two months ago, we started requiring erosion control bonds before construction starts," he said. "The developer has to secure a $3,000 bond per disturbed acre. So at least we’ll have money to stabilize the site (if the developer disappears).

"I think that will be a big step forward."



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