R.E.A.P. (Rent Escrow Account Program)
The Los Angeles Housing Department (LAHD) initiated the Rent Escrow Account Program (REAP) to enforce the laws regulating property owners’ maintenance of their buildings. This is done in an effort to make sure properties are safe and decent places for tenants to live.
After a piece of Los Angeles real estate has been inspected by LAHD and cited for violations, the property’s owner must make adequate repairs. If the owners do not comply within a specified time frame, they will receive a Notice of Noncompliance from LAHD. Once a Los Angeles property owner receives this notification, they will have 15 calendar days to appeal the REAP acceptance.
If a property owner does not file an appeal, the property is automatically placed into REAP. Filing an appeal grants property owners additional time to meet compliance-until the date of their General Manager’s Hearing.
However, in order to avoid REAP, Los Angeles property owners must have received a signature by LAHD before the date of the General Manager’s Hearing. If the General Manager accepts a property into REAP, the owners will have 10 days to file an appeal. However, once accepted into REAP, the property owner is not granted additional time to meet compliance.
Noncompliance will result in acceptance into REAP. Consequently, Los Angeles property owners will be assessed severe penalties resulting in a substantial loss of income, and perhaps the real estate, if the loss of income results in foreclosure proceedings.
After a property is accepted into REAP
After a property is accepted into REAP, tenants are no longer required to pay their rent to their landlord, instead, all monies for rent must be paid directly to LAHD and placed in an escrow account. In addition, while in REAP, landowners are assessed $50 per month for each unit of property. Also, restrictions are placed on evictions while in REAP, and rent increases are forbidden until 13 months after a property has been released from REAP. Finally, a lien is placed against the property while it is in REAP, preventing possible refinancing or sale.
Getting Released From REAP
Getting released from REAP is difficult and time-consuming. First, the property owner must repair all violations per the initial citation and any additional defects at the property. After all deficiencies have been repaired, s/he must contact LAHD to schedule a site visit from an Outreach contractor. If the contractor’s report is positive, LAHD will require the owner to contact his case manager for a final inspection upon which the owner may attain compliance. The release process may take up to two months to complete.
For more information on what you need to know about the city of Los Angeles Rent Escrow Account Program contact an IET Real Estate Agent at 323 412-9060 or use the contact form below.