Michael Morris can hardly believe his eyes. For nearly a year he’s watched in horror as a water spot the size of a quarter has crept across his dining-room wall like an unstoppable inkblot. The professional paint job he paid for when he moved in has puckered, and its rich crimson has faded to chalky red.

More seriously, Morris worries that the water is causing structural damage to the Church Hill house he’s emptied his wallet for and worked hard to renovate. He fears his insurance policy could also be at risk.

But it is not Morris’ house that is causing the decay. His house is attached to a vacant, long-neglected one next door.

He says drainage from the neighboring house’s porous roof is the cause of the ugly blob on his wall and for his house’s unmistakable smell of mildew. Morris predicts more to come. He says he has seen termites in the building’s foundation and crumbling wood. It is only a matter of time, he says, before the pests assault his home, too.

And he insists the owner of the derelict property, and not he, should pay for damage to his house.

But neither Morris nor city officials say they can find a way to do that.

Morris’ dilemma is not unique. Increasingly, Virginia’s status as a strong property-rights state is enabling negligent absentee owners — individuals or corporations — to use legal loopholes to sidestep mandates requiring them to maintain their properties, says Jennie Knapp, executive director of the Association to Conserve Old Richmond Neighborhoods.

“You can basically do what you want with [your property],” she says, without having to pay the consequences. And this, she says, has contributed to citywide slums everywhere from Jackson Ward to Church Hill to Highland Park.

Knapp claims pliable real-estate laws — and the city’s inability to enforce them and to prosecute offenders — undermine efforts by the city itself and groups like ACORN that trumpet incentives like tax abatement and historical tax credits to get homeowners to move into ailing historic urban neighborhoods.

As a result, ACORN soon plans to urge City Council to stiffen building code requirements — and possibly impose a tax on vacant properties — and will lobby state legislators to review the issue.

Meanwhile, Morris hangs in a kind of limbo. “I know I elected to move into the ‘hood, but the city does entice people to move here,” he says. “What’s the incentive if you can’t keep up the value of your house?”

Morris has strong ties to Church Hill. He is general manager of the 2300 Club on East Grace Street and a member of ACORN. Morris had spent a dozen years buying and fixing up old Richmond houses, some in blighted neighborhoods. So his move four years ago to Union Hill, an area of Church Hill northeast of the mostly renovated areas, seemed logical.

Morris says he knew the caveats that came with buying neglected property. Before he bought the brick row house at 612 ø N. 21st St. he checked out his neighbors. Back then, the houses on both sides were lived in and cared for. Just months after Morris moved in, one of the houses next to his emptied. And stayed that way.

From the sidewalk, the olive-green house at 612 N. 21st Street appears to need only cosmetic attention. Weeds have grown high in the tiny front yard and molding below the roof is rotting. Around back, moldy Sheetrock dangles like unglued roofing in an old car.

But because the doors are locked and the windows are closed, city inspectors say the house is secure. Possibly dangerous conditions inside and ugliness are not enough to condemn it or declare it a public nuisance.

According to the City Assessor’s Office, the property is one of 13 tax-delinquent and run-down properties — most of them in Jackson Ward and Church Hill — owned by the defunct Task Force for Historic Preservation and the Minority Community. Today those properties have a collective assessed value of nearly $1 million. But the city isn’t getting a dime from the taxes owed on them. By all accounts, it doesn’t expect to.

This has some like Morris and Knapp wondering why the city isn’t more aggressive in fighting absentee owners like the task force that let properties fall to ruin, refusing to pay taxes on them. “They get away with murder,” Morris says.

City officials say it’s more complicated than that. Take the task force, for example.

The organization was created as a nonprofit in 1985 to help restore neglected inner-city neighborhoods by providing decent low-income housing and by pooling corporate and community resources. What began as a noble pursuit, says city real-estate specialist Michael Dodson, eventually led to slumlike conditions.

“The corporation took on too much property and got greedy,” he says.

At one point, the task force owned 125 rental units in more than 50 buildings. The organization’s former executive director, Preddy Ray, could not be reached for comment.

But according to public records, Ray owes the IRS about $100,000. Naturally, any debt collectors will have to stand in line.

In 1997, former City Manager Robert Bobb blasted the task force’s Ray and a slew of property owners for abuses to their properties. His crackdown on landlord blight became known as Operation Squalor. (Today that effort is part of the Community Assisted Public Safety program.)

A year after Bobb’s admonishments, the corporation filed for bankruptcy with the State Corporation Commission. That status forced the city — and all debt collectors — to back off the task force. It also prevented the city’s real-estate office from proceeding with tax sales of the 13 properties. Earlier this spring, that changed.

The task force’s corporation emerged from bankruptcy. The city filed the paperwork necessary to sell the 13 properties — based on long-term delinquent status — at tax sale auctions. But the attempt was stymied at the 11th hour, says Ernie Rogers with the real-estate division of Motley’s Auctions, the company that handles marketing and auctions of the city’s tax-delinquent properties.

“I got a call at quarter to five the day before the [May] auction,” he says. The corporation had filed again for bankruptcy thus prohibiting the sale. “I had been marketing those tax-delinquent properties for months,” he says. “I had to tell people the properties had been withdrawn. Owners strategically do it so you can’t do anything about it.”

But what has happened to those 13 properties — and thousands more like them — is no surprise to some. “They hide behind the corporate veil,” says the city’s Dodson, about some property owners who use bankruptcy as a shield. “The laws are a good thing because they protect the individual but they have been abused.”

Currently the city’s real estate office maintains a database of nearly 3,000 tax-delinquent properties; 700 of those are in the tax-sale phase. The city constantly is trying to streamline the process, says Dodson. And with an office of three, he says, that’s a challenge.

Dodson acknowledges that imposing stricter code enforcement or making owners agree to fix up newly purchased properties quickly — within two years and beginning construction within six months of the sale — as is the case for community development centers might not be the answer.

With 700 tax properties being processed at a time — and word from the city manager to make Neighborhoods in Bloom properties the priority — the city’s real-estate office has enough property to deal with without having to take any back, says Dodson.

When asked what the city could do for Morris, Dodson shakes his head. As long as the house isn’t a threat to public safety or violates building code regulations and as long as the owner claims bankruptcy protection, the city can’t do much.

“It’s impossible to serve Preddy Ray and the corporation is defunct,” says Dodson. “The only thing we can do is the same thing Michael does: Board it up and cut the grass.”