Avon finalizes deed restriction for most community housing units
Wildwood deed restriction, under fire since the town began revisions, should be on the table in May or June
Chris Dillmann/Vail Daily archive
Avon is nearly finished updating the existing deed restrictions on its community housing units.
On Tuesday, April 8, the Avon Town Council approved an updated deed restriction option for units in Chapel Square, the Lodge at Brookside, Sheraton Mountain Vista and the Grandview, all of which have been governed by the same deed restrictions created when the units went on sale between 1997 and 2000.
This just leaves Wildwood units to see an updated deed restriction option. As the oldest of the town’s deed-restricted units — some Wildwood residents have been in their homes since 1991 — homeowners have said in previous town council units that their deed restrictions are too constraining and do not allow them to sell at an appropriate price.
During the same meeting, the council approved revisions to the Avon Community Housing Policies, a policy document that is secondary and provides further detail to the town’s deed restrictions. The policies document is designed to be reviewed annually, allowing for rapid adjustments to match industry standards.
“This really helps us to be able to make modifications as our role changes, as industry standard practices change,” Liermann said.
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The updated deed restrictions will point to the Avon Community Housing Policies to define buyer eligibility, list permitted capital improvements and formalize the resale process.
Under the older deed restrictions for the four properties, the permitted capital improvements are all slightly different. In general, unit owners are allowed to make improvements worth up to 10% of the unit’s value, resetting every 10 years. The list of permitted capital improvements was also “really narrow,” Liermann said.
In the updated version, the allowance against which homeowners can make capital improvements will reset every five years. “We really want to encourage owners to make improvements to their home,” Liermann said.
Homeowners in the town’s four deed-restricted properties will be able to opt to accept to the new deed restriction “in perpetuity,” but can also elect to stay with their existing deed restriction, Liermann said. “What we want to do is allow existing homeowners to replace their deed restrictions if it makes sense to them.”
Moving to the new deed restriction will not change the unit’s resale price. If the unit’s current owner does not move to the new deed restriction, the deed restriction will be changed when the unit is next sold. at the next resale.
Why is the town waiting to update the Wildwood deed restriction?
The Wildwood deed restriction has one key difference from the other four deed restrictions: The calculation for units’ maximum sale prices. Wildwood units appreciate via a simple interest calculation of 3% per year based on the most recent sales price, which could have been as low as under $100,000 if the unit never sold, or as high as $200,000 if it sold several times.
“What we’re seeing is a lot of price disparity between units that are still owned by the original owner or maybe had only resold once, versus units that had sold five or six times over,” Liermann said.
The town plans to offer Wildwood unit owners a 3% compounding interest rate in the updated deed restriction. In an analysis of price appreciation over 30 years, “it was not going to accelerate so far in advance that it would put new buyers 30 years from now at a disadvantage,” Liermann said.
The price value of the lowest units will also be increased to match the most recent sale price within the same property, according to Liermann. Once approved by council, homeowners will have one year to make the optional decision to move to the new deed restriction.
The council will review the updated Wildwood deed restriction option at a meeting in May or early June.
