Environmental Issues Arising At Abandoned Unfinished Developments; Insolvent Builders, Lenders Afraid To Foreclose Both Disclaim Responsibility

In Cartersville, Georgia, The Gainseville Times reports:

• 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."

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

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• [Senior soil erosion inspector for Forsyth County Simon] 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 banks) refuse to foreclose. They’re just letting it sit in limbo. They don’t want to spend the money to stabilize it."

For more, see Foreclosures leave erosion problems (Finding responsible party for damage not always easy).

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