Executive Director Matthew Gillen said deed restrictions are a stronger guiding legal document than Aspen-Pitkin County Housing Authority (APCHA) regulations. The specific deed restrictions, many of which were written in his ’70s or ’80s, contain the same requirements as APCHA’s most recent recommended deed restriction language (including sales through lottery systems). not.
Deed restrictions, or provisions written in a property’s deed, determine where the home will be sold and how the property’s appraised value will be calculated. APCHA is legally required to follow the parameters of deed restrictions when brokering transactions.
“A deed restriction is a fundamental legal document,” he said. “If it doesn’t say we have to go to a lottery, if willing buyers and sellers come to us and say, ‘This is what we want to happen,’ we’ll do it. I will act as an intermediary to make this happen.”
In a recent column by Aspen Times columnist Elizabeth Milius, she discussed the relationship between the owner of a one-bedroom/one-bathroom unit at 400 East Hyman Avenue and Aspen Mayor Torre. alleged that the transaction between them circumvented APCHA rules and regulations by selling directly. To Mr. Torre.
That’s incorrect.
In a transaction dated August 17, 2023, Mountain Enterprises 80-B, through authorized signatory Kathleen Denson, sold the units to Torre for $106,363. The unit did not make it to the lottery, and was one of 19 APCHA-brokered deed restricted units that did not go to the lottery in 2023.
The transaction remained under APCHA’s jurisdiction due to the language of the deed restrictions written in 1982, which specified, among other things, that the sale price of the property and the purchaser: This allows for use as workforce housing as described in Section 24-11, Section 4(b)(3) of the City of Aspen Local Government Code, and rental and sales terms and prices within the “moderate income” range. Limited to guidelines and occupancy limits. Housing eligibility guidelines are currently established by the City of Aspen City Council, and such guidelines may be amended by the City Council from time to time. ”
APCHA is an agency that verifies the eligibility of borrowers or buyers and brokers deed-restricted sales transactions, such as the Aug. 17 sale.
The latest version of the deed restriction language produced by APCHA includes that the sale of real estate with deed restrictions will involve a lottery process to select a buyer. However, if the deed restriction on the property does not direct APCHA to draw that property, then APCHA cannot conduct the drawing. The buyer only needs to qualify based on the terms listed in the existing deed restrictions.
Gillen said many deed restrictions written decades ago are not written the way APCHA would like. However, if APCHA brokers a transaction between properties with old deed restrictions, you will be given the opportunity to update the deed restrictions.
400 E. Hyman Ave. Unit A301 has a current APCHA deed restriction that provides that the unit will be sold through a lottery process. That means Mr. Torre has no say in who buys his units when making sales decisions.
Translating old deed restrictions into APCHA’s current deed restrictions language is a priority for APCHA.
Through its regulations, APCHA has a right of first refusal in transactions it brokers. This means that APCHA can take over ownership of the property and sell it in a lottery. Gillen said APCHA primarily exercises this right when renovating dilapidated properties and selling them at a price that will recoup APCHA’s financial investment. He pointed to two properties in Woody Creek that APCHA currently owns and is renovating with the intention of selling them in a lottery.
He said that, to his knowledge, no owner of a deed-restricted property has ever approached APCHA and requested a lottery sale of the property without clear language in the deed restriction.
According to a special warranty deed dated Aug. 17, Mountain Enterprises-80B sold 400 E. Hyman Ave. Unit A301 to APCHA for $10. On the same day, another special warranty deed shows APCHA sold the unit to Torre for $106,363. According to Priscilla Prohl-Cooper, escrow manager at Title Company of the Rockies, and Gillen, all sales brokered by APCHA are structured this way, with the price from the seller to his APCHA being $10; The price from the seller to his APCHA is $10, and the structure is APCHA to the buyer. Sales price ($106,000 for Torre). She said that is dictated by the language of the APCHA contract and has been that way for as long as she can remember. He also said the $10 price from sellers to APCHA is standard for all transactions involving APCHA.
Guillen could not say exactly why it was structured this way. The selling price was calculated by the simple interest accretion formula of 6% or the Consumer Price Index, whichever is lower, during each ownership period based on the purchase price.
Currently, APCHA uses a 3% annual increase or CPI floor. This means that the annual rate of increase in APCHA is likely to be even slower than it would have been based on the 1982 baseline using the 6% or CPI floor.
The Special Warranty Deed lists APCHA as the grantor/grantee of the transaction, depending on whether it is a sale or purchase.
The City of Aspen’s City Code lists exemptions from real estate transfer taxes. A 0.5% tax to support the Wheeler Opera House and a 1.0% tax to support the 150 Fund for Affordable Housing.
Deed restricted units are not subject to the 1% tax, but you still have to pay 0.5% tax.
Section 23.48.040(a) provides that “any instrument to which the United States, or any agency or instrumentality thereof, any state, county, city and county, municipality, district, or other political subdivision of this country, is the grantor or grantor; “It has been described as. ” — APCHA brokered properties mean they are exempt from the 1% tax.
Section 23.48.070(c)(1) also states that “all deed-restricted employee housing subject to the Aspen/Pitkin County Housing Authority Guidelines, as amended from time to time, is exempt.” .
The overwhelming majority of units whose conduct is restricted are within the scope of APCHA. However, if the deed restriction does not require APCHA’s involvement, any transaction involving the property would be entitled to a $100,000 exemption from RETT.
“There are some places, like the smuggler’s subdivision, that have their own (conduct restrictions) for the entire subdivision,” Guillen said. “They can sell (property in the subdivision) other than by lottery. But whenever possible, we do it by lottery.”
Still, it is not necessary to sell the property to bring the property title restrictions into line with current APCHA standards. APCHA encourages homeowners to update deed restrictions whenever possible, most recently with the Essential Repairs Pilot Grant Program. It provides homeowners with up to $10,000 for home repairs and requires that the property’s deed restrictions are up to date.
Gillen said APCHA does not have an estimate of how many deed restrictions similar to the 1982 deed restriction at 400 East Hyman Avenue currently exist in Pitkin County.
“I don’t like to speak in generalities when I have to deal with specific limitations, because those limitations were written 30, 40, 50 years ago,” he says. “I would love to say that[APCHA]is studying all of that around the world, but we don’t have the resources and it’s not the best use of our time to do that. As restrictions come up, we will look at them. We will get a legal opinion if necessary and consider what to do.”
For Gillen, the sale of 400 E. Hyman Unit A301 is a success. This is because the transaction updates the property’s deed restrictions to exist in perpetuity and requires a lottery for the next sale of the unit.