Guest view: East St. Louis steps backward on bond-for-deed sales

December 28, 2013 

On Nov. 14, the East St. Louis City Council quietly took away an important right for residents who buy homes under bond for deed contracts. In these transactions, buyers who can't get conventional loans pay a small amount down and the seller keeps title until the house is paid off. In May 1993, the Belleville News-Democrat ran a series of articles describing problems with bond-for-deed transactions in East St. Louis and surrounding areas. As one article pointed out: "Bond for deed is an unregulated transaction that sometimes leaves buyers paying for years without a chance of ever owning their homes."

In a May 19, 1993 editorial, the BND called on metro-east legislators to "introduce legislation that would regulate bond-for- deed transactions to protect future buyers from unscrupulous sellers."

On October 19, 1994, the East St. Louis City Council, citing the BND series, adopted an ordinance regulating bond for deed sales. The preamble finds the lack of regulation resulted in "many unique legal issues, problems and abuses, causing hardship to citizens of East St. Louis." The ordinance's protections include full disclosure of all contract terms before sale, and the seller is required to comply with city building codes and show a city inspection report to the buyer before the sale. The ordinance explicitly gave buyers a right to sue to enforce its protections.

In 2001, the St. Clair County Court first upheld the constitutionality of the ordinance in the Blue v. Golden Properties case. In 2012, the court specifically found the "private right of action" was not an improper delegation of police power and therefore, not unconstitutional. (Washington, et al v. Sieron)

Despite these prior court rulings, the mayor of East St. Louis and the City Council rescinded the private right of action section of the ordinance on Nov. 14, noting the private right of action may be legally unenforceable. Thus, they said they were rescinding it to "resolve any ambiguity regarding its enforceability."

The only ambiguity they resolved was whether they would stand by their own residents in their fight for decent, safe and sanitary housing or tip the scale again in favor of "unscrupulous sellers."

Linda Zazove is deputy director of Land of Lincoln Legal Assistance Foundation Inc., East St. Louis.

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