DENVER (CN) – A retired couple who unknowingly purchased a home located in an income restricted neighborhood sued the city and county of Denver Tuesday after they were asked to sell the home at a loss.
When Marvin Randell and Patricia Taylor-Randell purchased their home in the northeastern Denver neighborhood of Green Valley Ranch in 2014, neither their agent, nor the seller’s agent, nor the seller, the city, nor the title insurance company informed them that it was located in an affordable housing neighborhood, slotted for residents who met the income requirements.
Zillow estimates the three bedroom, 1,626 square-foot home is worth $300,845. According to Your Castle Real Estate, the home was purchased in 2014 for $210,000.
The couple learned the news in April when the Denver Office of Economic Development sent them a letter asking them to prove they met income requirements or to sell the home at a loss.
“If the city is going to force them to sell at an affordable rate, then the Randells are seeking to be compensated for the loss that they would incur because they not only purchased the property at market rate but they invested a significant amount of money in refurbishing the property,” said attorney Joseph Webb who is representing the couple. “They’re looking to get the benefit of their bargain, that’s what they want.”
The Denver Office of Economic Development failed to enforce income restrictions in the affordable housing program, resulting in an estimated 300 homes to be sold at market rate to unsuspecting buyers. The lawsuit estimates Denver has 1,302 homes in the program.
On its website, Denver’s Office of Economic Development defines affordable housing costs as “monthly rent or mortgage, plus utilities, add up to no more than one-third of your gross household earnings.”
The Office of Economic Development did not respond to requests for comment.
“The city failed to implement procedures to ensure that all participants in the purchase and sale of affordable housing units within the City and County of Denver properly recorded and documented the affordable housing restrictions,” the complaint stated. “It is unfathomable that approximately 23 percent of the affordable housing inventory to be in violation without material negligence on the part of the city.”
Also named in the lawsuit for breach of contract are Re/Max Unlimited and Your Castle Real Estate, which brokered the deal, as well as Land Title Guarantee Company which conducted the closing and issued the plaintiffs their deed—all of which were involved in selling the Randells their home and failed to notify them of the property’s income restrictions.
The couple is asking the court to declare they are entitled to remain in the home and able to sell it at fair market value, if and when, they choose to.
“The court, that’s the only place you have where you can get it redressed,” Webb added. “That’s why we have courts; that’s the only forum for a citizen to voice his complaint and have it heard, and get a fair and impartial judgment.”