"What the City of Los Angeles Does NOT want YOU to Know About REAP"
This is taken from my Special Report of the same title.
What is REAP?
In 2014, far too many residential income property owners in Los Angeles find themselves in battle with the Los Angeles Housing Department (“LAHD”). It can be property as small as a duplex, or as large as a 1,000 unit apartment building. When property owners fail to comply with a citation issued by LAHD, or doesn’t do it soon enough, they can find themselves in REAP - the Rent Escrow Account Program. Only badddd things happen, so you want to avoid or get out of REAP as soon as possible, so this does not happen to you:
The Case Manager now not only looks for the cited violations, but ALL deficiencies on the property. No one’s property typically passes on the first or second rounds. Additional sign offs will most likely be required from Building & Safety, Department of Health Services, Community Outreach and/or The Fire Department.
You have to comply, and the sooner the better – but you’ll be surprised at what you may do, versus what you must do – and WHEN you have to do it!
What is The Purpose of REAP?
To put this into perspective, let’s look at a little history. Straight from the LAHD website:It is the mission of the Los Angeles Housing Department Code Enforcement Division to identify and facilitate the abatement of physical conditions and characteristics of substandard and unsanitary residential buildings and dwelling units which render them unfit or unsafe for human occupancy and habitation, and which conditions and characteristics are such as to be detrimental to or jeopardize the health, safety and welfare of their occupants and of the public.
The existence of such substandard buildings and dwelling units threatens the physical, social and economic stability of sound residential buildings and areas, and of their supporting neighborhood facilities and institutions; necessitates disproportionate expenditures of public funds for remedial action; impairs the efficient and economical exercise of governmental powers and functions; and destroys the amenity of residential areas and neighborhoods and of the community as a whole.
So, the city wants to make sure its supply of housing is safe and fit for use by its residents. (Unless you’re cynical and figure that especially in these tough economic times, its just a huge money-maker for a cash strapped city. But I digress.) How does this affect you - the property owner?
How Does REAP Work?
Poorly; that’s how REAP works! I mentioned the Case Manager, above. The Case Manager is charged with knowing about the department’s policies, the law, procedures and methods, especially for inspectors in the field. It is the job of the inspectors to . . . inspect - residential units in multi-family dwellings, on a four-year cycle to ensure the safety and habitability of all occupied rental dwelling units once every three years or so, as per the city’s Systematic Code Enforcement Program (“SCEP”).
Once a property has been cited, generally for unauthorized
construction, and specifically for any number of reasons consistent with either
Los Angeles’ building and safety, fire,
and health codes, or certain California codes, the information goes into the
computer for ease of use by city personnel.
The property owner gets a Notice from the city to Comply or Abate. For most owners, they have 30 days to do
so. If, however, the city deems the
problem to be dangerous or hazardous, it can order a shorter period of
compliance. The SCEP task force schedules a
second inspection to ensure that the corrective work has been performed.
A property owner fails a SCEP Inspection when repairs are not completed within the time period specified on the Notice and Order to Comply, or Notice and Order of Abatement. You will be summoned to an administrative hearing called a General Manager’s Hearing. You can go by yourself, or with a qualified professional representing you. There you will have to explain the reason(s) for non-compliance, what progress (if any) you are making to comply, and specify the date the repairs will be completed. If you still fail to comply, your case file will be sent on to the City Attorney for criminal prosecution. This may result in jail time, a fine, or both. The property may also be subject to inclusion in the dreaded Rent Escrow Account Program.
Theoretically, REAP is an enforcement tool for the city, to try to
get residential income property owners to maintain their properties in
compliance with all city codes, and when cited for a code violation, to fix the
problem making it once again, code compliant.
General Manager REAP Hearings are administrative hearings which are used to determine if a property meets the requirements to be placed into REAP, with a reduction in rents. Compounding this, the General Manager has the power and authority to issue a further rent reduction or to include additional units into REAP. Also, since there is also going to be a General Manager’s Code Enforcement Hearing, the city tries to combine it with the REAP hearing, as a “combo” case, combining Code Enforcement issues with the REAP matter.
It is beyond the scope of this report to go into the General Manager administrative hearings at length. Be advised that the hearing cannot be postponed or rescheduled. For Code Enforcement- REAP cases, the hearing is held to determine (1) which penalties, if any, should be assessed against the property owner due to non‑compliance with the Notice to Comply or Abate, and (2) whether the property meets the requirements to have been placed into the REAP. Just know this; the deck is stacked against the property owner. There a host of legal and other issues that arise at the hearings, and one more thing; tenants can and frequently do attend these hearings - and can testify is they so choose. Remember, if you do not know your rights, you have no rights. So my recommendation is to either have a representative attend WITH you, or at least speak with one beforehand.
Following the General Manager hearings, you have the right to appeal the decision. This is another highly technical area. However, the appeal may be rejected for various reasons. Please read the information in the “Right to Appeal this Decision” section of the General Manager’s decision and the bottom portion of the appeal form for more information. There is a non-refundable $150 filling fee for the appeal which must be timely received. The appeal process is another step in asserting and protecting your rights.
Besides knowing how to avoid REAP, property owners want to know
how to get their properties OUT of REAP.
Be forewarned: it’s a time-consuming and therefore expensive process.
To get out of REAP requires:
There’s still another
hurdle. After all of the above, the REAP
administrators must recommend to the LA City Council to remove your property
from the REAP program. After that, the City
Council must vote to adopt removal of your property from REAP. Then they will issue a 30 day notice formally
closing the escrow account and restoring the rents to their original levels.
Even after you meet all the hurdles, no one from the city will do anything without you pushing for everything that you want and are allowed by law.
How Long Will The Removal Process Take?
Theoretically, once a positive report is issued and compliance attained, REAP could have the case before City Council in 2 to 3 weeks. However, that rarely happens; it usually takes a lot longer. The good news is, you’re your property is removed from REAP, the administrators are required to mail you a 30 day notice, in which they formally close the escrow account and restoring the rents to their original level. So the time to remove a case is a minimum of 6 to 7 weeks and a maximum of “pick a number.”
How Do You Clear Your Title Once in REAP?
After your property is removed by the Los Angeles City Council, the owner is responsible for paying all REAP Administration Fees, Inspection Fees, SCEP fees, Legal preparation Fees, the 2 pre‑paid annual inspection fees. Once these fees are paid, REAP will prepare a termination document and send the paper work to the County Recorders Office. Cases where tenants made deposits into the escrow account will be used to cover the costs of these fees. If there are not enough funds to cover the costs, the owner is required to pay the balance.
If you think your property is going into REAP or may be there
already, your best bet is to give me a call.
Hi, I’m Andy Baker. I’ve been serving Los Angeles, the San Fernando Valley, and all of Southern California for the past 16 years as a real estate and construction attorney. I know how to help people in situations that are similar, or identical to yours. I was a real estate agent in Los Angeles for over 13 years. I was pretty familiar with real estate problems. But it wasn’t enough; legal issues kept cropping up. In fact, I spent so much time on the phone with my real estate attorney that I decided to become one! This combination of experience gives me a “real-world” perspective. This allows me to resolve Code Compliance matters by crafting creative and pragmatic solutions.I have been professionally assisting apartment owners in these situations for years. I have run into many of the barriers that you can expect to run into and many that you would never expect. I still get surprised by what can happen. Most situations seem straight-forward, but take unexpected turns.
The starting point is with my FREE
telephone consultation, where I will:
• Go over your facts
• Ask you questions
• Discuss your code citation / Order to Comply
• Discuss your REAP notices
• Present you with ideas of how to remedy your problem
• Explain your legal rights and your obligations
• Answer all of your questions
• Discuss my services with you
• Provide you with information to empower you
Your conversation with me will last about 25 minutes, depending on the complexity of your case. This consultation can save you thousands of dollars plus substantial time and aggravation. It’s at least a $160.00 value, yet the consultation is 100% free, without obligation.
After that, both you and I will know how to best tackle your problem. I have several cost-effective ways to proceed, so that you get your problem addressed in a timely fashion and at a reasonable price.
To set up your unbiased Cite Code Violation Consultation
or to ask me any of your questions
simply call me (Andy) at 818-620-6023
or email me at
I help people stay out of REAP, or if they're already in, get OUT !
I look forward to talking with you soon,
The Code Compliance Lawyer
22287 Mulholland Hwy, No. 131
Calabasas, CA 91302
Tel. (818) 620-6023