McKeon to Question HUD About Selling Damaged Condos

Rep. Howard P. “Buck” McKeon (R-Santa Clarita) plans to seek an explanation from the Department of Housing and Urban Development, for why the agency sold condominiums in a damaged complex, some to buyers who were unaware of how badly the property had been affected by the 1994 Northridge earthquake.

McKeon, who represents the North Hills neighborhood that includes the Nordhoff Townhomes, “will be inquiring to HUD, as well as to city [of Los Angeles] officials as to how this could have happened,” David Foy, a spokesman for McKeon, said Monday.

“Certainly, something fell through the cracks for HUD to be selling earthquake-damaged condominiums to unsuspecting buyers,” Foy said.

Much of the working-class complex at 9047 Langdon Ave. should be torn down and rebuilt, according to two private engineering reports, issued in 1995 and 1999.

HUD officials in Washington have said the agency was unaware of the reported problems with the 50-unit complex until last month. The condition of the building remained a mystery to the agency, despite the fact that appraisers, under contract with HUD or a lender, looked at 19 HUD-owned units in the building between 1994 and this year.

The Federal Housing Administration, the nation’s largest insurer of home mortgages and an arm of HUD, has “the most comprehensive appraisal standards in the industry, which helps the agency ensure that people purchase safe homes,” according to William Apgar, federal housing commissioner.

If HUD is going to make such claims, Foy said, the agency should be willing to back them up.

“If HUD is representing that it is selling safe homes, then the buyer ought to be able to rely on that representation as being true,” said Foy.

“HUD should either sell the homes ‘As-is, buyer-beware, because we haven’t checked these out at all,’ or they should check them out before they represent that they are safe,” he said.

HUD spokesman David Egner said that HUD homes are sold “as-is.”

“Moreover the department appraises every HUD home and discloses any known defects,” he said. “The department goes to great lengths to clearly articulate the sales policy to potential purchasers and to encourage them to get an independent home inspection.”

Asked about the apparent conflict between ensuring “that people purchase safe homes” on the one hand, and selling them “as-is,” on the other hand, Egner declined further comment.

HUD officials previously noted that the building was “green-tagged” by the Los Angeles Department of Building and Safety after the Jan. 17 temblor.

Bob Steinbach, chief building inspector for residential properties, called that inspection “cursory,” noting that it was done rapidly, while the city was in the midst of a crisis.

“When we do a rapid evaluation, it’s just a cursory inspection,” said Steinbach, who said that the city, like HUD, had been unaware of the two engineers’ reports.

He said it was not unusual for buildings throughout the Valley to be reclassified, once more detailed engineering studies were done and presented to the city.

Scott Clements, immediate past president of the California Real Estate Inspection Assn., agreed that a number of homes in the Valley, particularly condominium complexes, were mis-tagged during the early hectic days following the shaker.

“It’s common to have misidentified inspections during the triage period,” said Clements, vice president of a Bay Area property inspection company. “That comes with the nature of triage inspections.”