Derelict houses that have become a public nuisance could face foreclosure action in Medford if the City Council follows through on a tough new blight ordinance next week.

"There's going to have to be proof of endangerment of public welfare," Councilor Michael Zarosinski said. "I would say the receivership could be used on properties where appropriate."

The new ordinances would give code enforcement officers tools to tackle abandoned or boarded up structures and to go after blight in general.

The council, which will take up the ordinances on Dec. 1, has been wrestling with a receivership ordinance since 2014 that would spell out what code requirements must be followed to properly maintain a property. Local banks objected to parts of the ordinance, particularly the definition of the owner of a property.

Lenders thought the initial definition of owner was too broad, and that it could encompass utility companies and others who had only a limited interest in a property.

"It put lenders in an awkward position," Zarosinski said.

In June, Ken Trautman of People's Bank told the council, “We think it’s a good ordinance, but you have to be careful about your definition of who an owner is."

At the time, the council wanted to go after an estimated 436 mostly bank-owned vacant houses that attracted vagrants and drug users and created a nuisance for neighbors. 

In May, the Oregon Bankers Association sent the city a letter opposing wording in the ordinance, saying it could create “unintended consequences” because the definition of owner would encompass a variety of individuals and lenders who may not have any significant interest in the property, including the holders of easements such as utility companies.

Councilors Tim Jackle and Daniel Bunn as well as other city staff worked with local banks to improve the language in the ordinance.

"The financial industry is comfortable with it, and we can move forward," Zarosinski said.

A brief overview of the new definition of an owner is someone who has title, who has right to possession, who is obligated on a mortgage loan, who has foreclosed on a mortgage or is a person who has a successor interest in the property.

Representatives from the city will maintain a list of derelict structures and give the owner a period of time not to exceed six months to make repairs.

A hardship clause has been included in the ordinance for those over 65 years old, the disabled or those classified as "very low income" according to the U.S. Department of Housing and Urban Development. The hardship waiver cannot exceed a period of three years.

Zarosinski said the new ordinance got its start after the council discussed ways to deal with structures that have broken windows, an issue that's included in the proposals.

Broken windows would have to be replaced within 30 days, and the property would have to be properly maintained, according to a list of new codes the council will consider Thursday.

"Our goal is to get derelict properties up to habitable standard," Zarosinski said. "This is certainly a tool for that."

Reach reporter Damian Mann at 541-776-4476 or dmann@mailtribune.com. Follow him on www.twitter.com/reporterdm.