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| fema, home buyout program, rancho palos verdes,landslide, mary cummins, real estate appraiser, real estate appraisal, home, grant, fema program, |
Homeowners will be offered "fair market value" for homes. The price will be "determined by an appraisal that is based on the fair market value of the land on Dec. 1, 2022, prior to the acceleration of the landslide." If you don't agree with the city's appraisal value, contact us for a historical restrospective appraisal of your home for an affordable rate. The program will pay for the "Appraisals costs." #ranchopalosverdes #homebuyout #landslide #marycummins #realestateappraiser #realestateappraisal
From the program: "A licensed appraiser hired by the City conducts these appraisals. Cal OES will hire a certified appraiser to review the methodologies used to calculate the value and prepare the appraisal report. If a resident would like to appeal this offer, they may hire their own licensed appraiser, out of pocket, to conduct an independent appraisal. This second appraisal will also be reviewed by the Cal OES review appraiser. "
The program will pay for "Appraisals costs" and other costs. See below.
We have years of experience doing appraisals for eminent domain for the Metro and other government agencies. We do the second appraisal for property owners don't agree with the city's offer. Metro pays for the second appraisal cost. Based on our experience with Metro and other government agencies, their offer is generally at the lower end of market value. Our clients received more money after a second appraisal was conducted.
More about the program:
Voluntary Property Buyout Program
On October 28, 2024, the City of Rancho Palos Verdes, the Federal Emergency Management Agency (FEMA), and the California Governor’s Office of Emergency Services (Cal OES) announced a $42 million voluntary buyout program for property owners in the Greater Portuguese Bend landslide area whose homes have been damaged or threatened by land movement. Established with funding from FEMA’s Hazard Mitigation Grant Program, the Voluntary Property Buyout Program is intended to help eligible homeowners relocate to safer areas by offering a fair market value for their properties based on pre-disaster appraisals. Properties acquired by the City through this program will be permanently converted to open space and deed-restricted, protecting the community from future redevelopment risks in these vulnerable areas.
An overview of the program guidelines and application process are detailed below. A PDF version is also available.
Property owners interested in applying for the buyout program must request a voluntary property inspection from the City by 5:30 p.m. on Monday, November 4 by e-mailing buildingsafety@rpvca.gov. Program applications are due to the City by 4:30 p.m. on Friday, November 8, 2024.
Download an application by clicking the button below. Complete the application form and email it to landmovement@rpvca.gov, or print and return it to City Hall by Monday, November 4 at 4:30 p.m. City Hall is located at 30940 Hawthorne Boulevard in Rancho Palos Verdes. Regular business hours are 7:30 a.m. - 5:30 p.m. Monday-Thursday, and 7:30 a.m.-4:30 p.m. Friday.
Voluntary Property Buyout Program Application
Download and print or email your completed application (PDF). Open in Adobe Acrobat to use electronic signatures.
Introduction
Many cities across California and the country have utilized buyout assistance programs for their residents to rebuild their lives and create new memories in safer places.
This Voluntary Property Buyout Program (Program) has been developed by the Federal Emergency Management Agency (FEMA) and the California Office of Emergency Services (Cal OES) in partnership with the City of Rancho Palos Verdes (City) to enable property owners caused by the Greater Portuguese Bend Landslide Complex (Landslide) to relocate from the risk of imminent failure of land movement. Funding for this Program comes from FEMA through its Hazard Mitigation Grant Program (HMGP).
HMGP
Generally speaking, FEMA’s HMGP is funded whenever a federal disaster is declared by the President. Funding that becomes available through the HMGP can be applied to any city in a state for which a federal disaster is declared and is not limited to the affected City.
FEMA is funding this Program in the amount of $42 million to the City based on the Federally declared California disaster for the winter storms that occurred between January 31 and February 9, 2024. Additional future Program cycles may become available to affected residents depending on whether a federal declared disaster occurs in California. In other words, this Program may not be considered a one-time opportunity and may be available in the future.
How the Voluntary Property Buyout Program Works
This property acquisition program is just one of many programs being offered through FEMA’s HMGP. In a Buyout Program, also known as an “acquisition” program, the city will work with residents, who are participating voluntarily and own an improved property with permitted residential structure(s) that has been damaged or is at imminent risk to be damaged by a natural hazard event. Through the Program, the City is able to buy property from affected individuals based on an appraisal of the fair market value at a predetermined date, acquire title, demolish the structure(s), and revert it to open space. By law, upon closing, the property would be owned by the City and must forever remain open space land. At closing, the property will be deed restricted as open space in perpetuity and cannot be redeveloped, except for limited allowable conservation/open space uses that are approved by FEMA Region 9. The City cannot sell it to private individuals or develop it in perpetuity.
FEMA does not buy houses directly from the property owners. This Program is a typical real estate transaction between a seller and buyer, with the City being the buyer. The Program is funded by FEMA who will pay 75% of all eligible expenses. For this Program, the remaining cost share of 25% must be borne by the seller (property owner) except for certain in-kind costs borne by the City.
The Program is administered by Cal OES and directly overseen by the City. Homeowners do not apply directly to FEMA or Cal OES for a buyout, as they are not considered disaster assistance, but rather a grant under the HMGP. Mitigation grants are complementary programs to the disaster assistance programs and have their own rules and regulations.
Based on applications received from each interested property owner, the City will identify properties where buyouts make the most sense based on, but not limited to, the scope of existing structural damage as determined by the City’s Building Official through a property inspection, open space value, community needs, and FEMA program requirements.
Program Steps
Application Process
Property owners of interest with structures that are destroyed, damaged, or imminently at-risk must voluntarily fill out an application (attached) and submit it to the City no later than close of business (4:30 PM Pacific Time) November 8, 2024 to be considered eligible within this first round of the Program offering.
Application Screening
The City and Cal OES will review all property applications received by the November 8, 2024 deadline to ensure that each property meets FEMA’s eligibility requirements and will pass cost-effectiveness, environmental and historic preservation reviews, as summarized below:
Cost Effectiveness - Cost-effectiveness is determined by FEMA’s Benefit Cost Analysis (BCA) methodology and determined via FEMA’s software toolkit. This is the hardest hurdle for most program applications to clear. Many sound proposals across the state do not meet this component and will then be removed from initial consideration.
Environmental and Historic Preservation - The environmental and historic preservation (EHP) review process is intended to ensure all program applications align with and meet all the provisions of the National Environmental Preservation Act (NEPA), California Environmental Quality Act (CEQA), and program-specific reviews. This compliance assessment process can take several months to complete and the city to receive FEMA approval.
Both of the BCA and EHP review processes may take many applications out of initial consideration. These strict reviews limit the properties that can be considered in the Program.
Prioritization Criteria for Selecting Properties
The City along with Cal OES and FEMA must ensure that each application follows program rules/regulations and comply with BCA and EHP laws and guidance. Properties deemed eligible by FEMA for the Program will then proceed to the selection process.
Minimum eligibility includes:
The property is not bank owned (mortgages do not constitute bank ownership for purposes of this Program). This Program does not apply to properties currently owned in title by a bank or other institutional financial institution through a foreclosure or other similar means;
The property has not sold since December 1, 2022 (based upon Los Angeles County Tax and/or parcel records;
The property must be improved with a legally permitted structure(s) based on records on file with the City’s Building and Safety Division; and,
Applicants must be the legal owners of the improved structures according to the Assessor’s records and building permit records on file at the City’s Building and Safety Division.
A property will be selected by the City to proceed with escrow based on the following prioritization order:
Properties with a structure that has been red-tagged by the City’s Building Official;
Properties with a structure that has been yellow-tagged by the City’s Building Official;
Properties with structures that are in imminent jeopardy of becoming red- or yellow-tagged due to their close proximity to land movement elements (i.e. fissures, grabens, sinkholes, etc.);
Properties that have been de-energized indefinitely;
Properties that may benefit the City’s Landslide stabilization and winterization efforts as determined by the City’s Public Works Director; and,
Properties that contribute to the overall value of the adjacent Palos Verdes Nature Preserve as determined by the City’s Recreation and Parks Director.
Property owners that are interested in the provisions of this program are encouraged to request a voluntary inspection by the City’s Building Official no later than 5:30 p.m. on Monday, November 4, 2024.
Property Owner Notification
The City will notify, in writing, property owners that they have been selecting to proceed with escrow.
5. Property Appraisals
The sale price offered to a resident is determined by an appraisal conducted by a licensed property appraiser. For most residents, you will be offered pre-incident fair market value based on December 1, 2022, before land movement accelerated due to the heavy precipitation associated with the atmospheric river storms.
A licensed appraiser hired by the City conducts these appraisals. Cal OES will hire a certified appraiser to review the methodologies used to calculate the value and prepare the appraisal report. If a resident would like to appeal this offer, they may hire their own licensed appraiser, out of pocket, to conduct an independent appraisal. This second appraisal will also be reviewed by the Cal OES review appraiser.
If there are mortgages or liens held against the property, the fair market value paid to the property owner will be decreased by this amount. In other words, all mortgage obligations or property liens will be retired first.
FEMA Project Approval
FEMA will notify Cal OES once all the submitted properties are deemed fully eligible and receive official approval. Once FEMA awards the grant funds for the buyout, Cal OES will work with the City on next steps. No construction or demolition activities may take place before FEMA approves the grant (excluding the City’s Landslide stabilization and winterization activities).
Release of Liability and Indemnification Agreement
Any property owner who accepts a buyout offer shall be required to sign a liability release and hold harmless/indemnification agreement. As a condition of acceptance, property owners must withdraw any claims for personal injury or property damage against the City in connection with the Landslide and in connection with all of the City’s activities and efforts related to the Landslide, and dismiss any lawsuit against the City on the basis of same. A property owner must also release the City from liability from any and all past or future claims or other actions in law or equity for any personal injury or property damage based on any of the City’s actions in connection with the Landslide, in perpetuity.
8. Closing
Once a homeowner accepts a buyout offer, the average closing takes about 45 days. The City will conduct the purchase and title transfer.
Property Transition
Upon closing escrow, all property structures and improvements will be required to be demolished and the lot cleared for open space. Each parcel may be required to be regraded and restored so that it does not create a safety issue to the public.
Eligible Costs
If a property owner voluntary chooses to participate in this Program, FEMA’s grant funding will pay 75% of the total fair market value as established on December 1, 2022, the total fair market value will include the following:
Property value as established by licensed real-estate appraiser
Appraisals costs
Title search costs
Lot survey costs, if necessary
Real estate transaction fees
Closing costs
Demolition costs
Environmental/hazardous waste remediation (lead-based paint, asbestos, etc.) costs
Site restoration (grading, seeding) costs
Like any other real estate sale, property owners will be responsible for the moving costs and other costs associated with renting or buying new property. Since property acquisition relies on voluntary participation, the government does not pay any relocation costs. However, there are exceptions for any tenant who is displaced by an owner's decision to sell.
Voluntary Participation
This Program is strictly voluntary. Homeowners are not being forced to relinquish their property and the City will not use eminent domain to acquire a property.
Voluntary Withdrawal
Property owners who have been selected to proceed with the purchase of their property may withdrawal at any time prior to closing. Once closing occurs, the real estate transaction is complete and final.
Landslide Stabilization and Winterization
This Program is not intended to replace or suspend City efforts to stabilize the Landslide and implement winterization measures and activities. With or without participation in this Program, the City is committed to continuing with its stabilization and winterization activities and efforts.
Timeline and Expectations
Despite efforts to compensate you fairly, property acquisition may not make you "whole" again, but it is often the best option for people who do not want to accept a certain level of risk in their day-to-day life and are at imminent risk of losing their home.
Moreover, the process can be lengthy. Applying for funds, waiting for FEMA approval, transferring funds, conducting appraisals and closings, etc., take time. Even the easiest real estate transactions take months to complete under ideal circumstances. Adding Federal and State government processes may slow down the transaction; however, the amount of funding offered through this option is typically the highest property values available for residents living in hazard prone areas.
Duplication of Benefits
Because federal funds are used to acquire property, FEMA cannot duplicate the benefits paid by one program with benefits from another source. This means that FEMA will require the City to subtract from the purchase price the amount of other assistance the individual property owner might receive for the same purpose. This assistance includes grants that are available to individuals or insurance payouts. The $10,000 assistance payment through the Social Program provided by Supervisor Hahn to eligible residents in the area does NOT count as a federal duplication of benefit.
If the property owner received any insurance payouts to repair their home, they must show they used that funding to make the repairs before the closing, or else the fair market value will be lowered by this amount. In other words, if your structure was damaged, you cannot receive an insurance payout to repair the structure and a full pre-event fair market value at closing.
Non-Federal Cost Share (aka the “Match Contribution)
FEMA only provides 75% of the funding in the HMGP. To meet cost-sharing requirements for this FEMA grant program, property owners will contribute approximately the remaining 25% contribution for their property through an additional reduction of their fair market value payment. An amount will be reduced from the payment at closing and held in escrow to cover the balance of the remaining activities (e.g. demolition and site restoration). The property owner will receive any additional balance upon completion of site restoration during closeout.
Who to Contact with Questions
Inquiries on the Program should be emailed to landmovement@rpvca.gov.
Conclusion
This page is intended to ensure affected property owners get all the information they need about the Buyout Program so they can make an informed decision.
https://www.rpvca.gov/1782/Voluntary-Property-Buyout-Program
Mary Cummins of Cummins Real Estate is a certified residential licensed appraiser in Los Angeles, California. Mary Cummins is licensed by the California Bureau of Real Estate appraisers and has over 35 years of experience.
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