Forty-eight properties throughout the city of Madison could soon be for sale as landlord Ray Peterson deals with a court order to bring them up to city standards.
On Friday, a Dane County judge said that 45 of 48 properties Peterson owns constitute a public nuisance, ordering him to hire a professional property management company within 30 days to bring the properties up to code.
Peterson, 90, said he instead plans to sell all 48 of his properties as soon as possible. About a dozen are already listed with Stark Company Realtors — including one where the front door hasn’t opened for months — and Peterson said another dozen will soon be listed with First Weber Realtors.
“I’m hoping we’ll be given more than 30 days, but we’re hoping to sell them as soon as possible,” Peterson said. “We’re already getting offers to buy them.”
He also plans to petition the court for a reconsideration of the judgment.
“There’s a lot of moving parts right now, we’re going to have to see where it shakes out in 30 days,” said housing inspection supervisor Kyle Bunnow.
The city of Madison filed the nuisance petition in October, following decades of mounting building code violations on Peterson’s properties. Peterson owed more than $600,000 in accumulated judgments at the time of the filing and had accumulated more than 1,400 violations on his properties from May 1, 2010 through May 1, 2015, according to the complaint.
In October, nine of his properties were posted as “no occupancy” due to the extent of the violations. Two more — 929 Williamson St. and 2269 E. Washington Ave. — have been added since then.
“They were in such bad shape that we didn’t compile a report,” Bunnow said of the two additional properties. “It’s one of those things where, I’m sorry, this is so bad, no one can be in here.”
In addition to hiring a property manager, Friday’s ruling from Dane County Circuit Judge Julie Genovese bars Peterson from renting any vacant properties until a property management company is hired and requires him to open two escrow accounts to fund repairs. Peterson was absent from Friday's court hearing and said he had requested an extension, but Genovese did not find his absence excusable, given his history of non-compliance.
Assistant city attorney Jennifer Zilavy said she is “very satisfied” with the ruling.
“It will be a process for sure, but if it goes the way it’s laid out, it should be successful,” Zilavy said.
Bunnow said there have not been any previous cases he knows of that involve this many properties being declared a public nuisance.
“Ray is in a league of his own,” he said.
How the process will proceed will depend on how many properties Peterson sells and whether he hires a property management company. If he doesn’t, Zilavy will file a motion for an order to show cause and ask for a hearing. Possible sanctions include monetary forfeitures and jail.
“Friday was a step in the correct direction towards resolving the issue,” Bunnow said. “It developed over a really long time and it’s not going to get fixed overnight, but we’re moving in the right direction.”
Bunnow said city housing inspection will work with the property management company, if hired, to address security and safety-related items like smoke and carbon monoxide detectors, doors, windows, locks and security of buildings.
“Our first order of business is securing the safety of the tenants in the occupied units,” Bunnow said.
Peterson bought his first house when he was 17 and has since accumulated more than $6.5 million worth of properties in Madison, according to 2015 city assessor records. As of June, he drew about $36,000 per month in rent from 50 of his 72 rental units, the rest of which were not occupied, according to his records.
Peterson said would now prefer to sell the houses to people who will be living in them instead of keeping them as rentals.
“I think everybody that has the chance to own their own home should,” Peterson said. “It would be better off for the occupants of the properties and the city also, I would think.”
Many of his tenants are low-income renters and have issues finding other places to rent in Madison's tight housing market. Some have bad credit, gaps in their rental histories or eviction notices on their record.
Peterson said tenants would have the option to complete their leases if the houses sell or be given a chance to terminate.