The Madison Real Estate Group rescues property owner from squatters and vandals upon being awarded
management of the building and arrests the five individuals responsible.
Despite alarmingly high rate of these instances in Los Angeles, the Madison
Real Estate Group is bringing properties such as this one into compliance
within 90 days.
The Madison Real Estate
Group, a leader in multifamily property management, was awarded the management of an eight unit REO
property in Los Angeles. At the time of takeover the property had
been placed in the Los Angeles Rent Escrow Program (REAP). Squatters were
rotating in and out of the vacant units and it was continuously being
vandalized.
Subsequently, upon takeover of the asset, five
individuals were arrested for vandalizing the property, the squatters were
removed and the REAP case was brought into compliance within 90 days. The
necessary paperwork was filed with the city and Madison filed the necessary
paperwork to obtain fund in excess of $20,000 being held in the escrow account
and placed the property on the market for sale.
In the past few years, the
number of REO properties has reached an all-time high, in what some are calling
an unprecedented pace. With the number of REO properties hitting the
market it is essential the right management company is retained. The Los
Angeles REO market has been plagued with problems from squatters to vandalism
and are being placed into the Los Angeles City Rent Escrow Account Program at
an alarming rate.
For landlords and property
owners who have fallen behind in their maintenance and repairs, the city of Los
Angeles Rent Escrow Account Program can wreak havoc on their revenue and
collectibles, and come close to burying them in a landslide of beaurocracy and
paperwork. It’s a legal and logistical mess most property owners don’t
have the experience necessary to handle on their own.
The affected
tenants are immediately given a rent reduction, usually somewhere between 10%
up to 50% range, and it isn’t unheard of to see a reduction in the upward range
of 80 to 90%, depending on the severity of the violations. This is lost
rent to the property owner and is non-recoverable. A notice of REAP
is recorded and filed against the property's title with the County Recorder’s
Office. If this is not resolved, this recording may restrict the
refinancing or sale of the property.
Once a property is in REAP, even those
owners who immediately attend to the complaints have a lot of work ahead of
them just to recover even the reduced rent if the tenant has chosen to pay the
money into the escrow account set up by the city. The owner must then
attain three separate sign offs on all outstanding orders from the LAHD
city inspector assigned to the property and a case manager from the cities
outreach program before being sent to the city council for final approval and
release.
Clearly, owners should be aware of
violation notices, and diligently make repairs to avoid this situation. Those
that put it off too long are looking at rough waters. Once a property is in REAP, it takes knowledge and
expertise to get out – and even that does not guarantee full recovery of your
expected income. Trying to navigate those waters alone can leave an
inexperienced owner drowning in paperwork, and failing profits.
This coupled with squatters and vandalism at the
property were creating life and safety concerns for the ownership that needed
to be address immediately. Immediately upon taking over Madison’s team of
REO professionals took all the necessary steps needed to ensure their client’s
interest were being protected. Madison has systems in place when an REO
property is placed under management, allowing them to act quickly and
aggressively ensuring residents are protected and the value of the asset is being
preserved. As standard protocol during the takeover process of an REO
asset, The Madison Real Estate Group notifies the local authorities of the
change of ownership and files a Trespass Arrest Authorization form with the
local police department. This allows the police department to
arrest anyone on the premises who isn’t a resident or a proven guest of a
resident without having to contact the ownership of the property. This
gives Madison the ability to call in a potential threat to the police department
and allows the police to make the arrest without confrontation, protecting the
client’s interest, as well as, the residents of the property.
About The Madison
Real Estate Group
The Madison Real Estate Group is an
entrepreneurial and experienced full service multifamily and commercial real
estate company that serves as a trusted advisor to financial institutions and
private investors. They have a successful track record working with city
officials in getting the properties under their stewardship removed from the
REAP program and recovering funds owed to their clients. They have built
their reputation by offering innovative solutions to their clients property
management needs, adding value to their portfolios, and consistently exceeding
their expectations for service and performance.
