Renovation Performance Policy and Escrow
The objective of the Sales 4 Rehab Program is to provide incentive to purchasers to reinvest in sub-standard housing by offering it below market value to those willing to commit to a renovation plan that results in safe, quality housing, at or above par with the neighborhood standard.
With that outcome in mind, purchasers will be required to:
- Commit by contract to the renovation plan submitted in the purchase proposal
- Address all code violations; seek all permits; and comply with all local codes
- Provide exterior clean-ups, upgrades to create curb-appeal
- Submit periodic reports indicating completion of renovation benchmarks and code inspections
- Review any substantive changes to the renovation plan or timeline with the Land Bank Director (and if necessary seek board approval)
Asking price for properties is generally calculated on 60% - 80% of the current (as-is) appraised value. Some exceptions apply. This policy was adopted to allow for reinvestment in the property; the performance escrow provides the Land Bank with some assurance that the renovations promised will be completed. It is a non-negotiable component of the Sales 4 Rehab program.
Performance escrows will be required from all successful bidders in the following amount and will be released upon satisfactory completion and inspection of project as follows:
- $2,500 for projects less than $25,000
Refunded upon satisfactory completion of renovation, including code inspection and if required, certificate of occupancy
- $5,000 for projects greater than $25,000 but less than $50,000
Half refunded upon satisfactory code inspection of structural and infrastructure (plumbing, heating, HVAC) repairs/replacement. Balance refunded upon completion of interior and exterior renovations
- $7,500 for projects greater than $50,000
One third refunded upon satisfactory completion and inspection of structural and/or infrastructure repairs, second third upon completion of exterior upgrades, balance upon completion of interior finishes.