National Real Estate Investor Lobbying Head Leaves D.C. Firm, Still Runs NARHRI

Tuesday, June 13, 2006
By David Wilkening (analyst@houstonrealnews.com)

John Grant, executive director of the National Association of Responsible Home Rebuilders and Investors (NARHRI), has left his Washington, DC, law firm but says he has no intentions of leaving the association he heads up.

In fact, he has some new initiatives he discussed with HoustonRealNews. And he is citing a new Colorado law as the association's first victory.

Grant recently left the firm of Blackwell Sanders Peper Martin.

"I wanted to spend time with a few clients for a while and I had the (financial) luxury to do it," he said of his leaving Blackwell, where one of his clients was NARHRI.

As for the recently passed Colorado law:

“It gives us a credible model to float around to other states. It's not 100% of what I want, but I live with political reality and it's sure a lot better than some other states," he said. [Here is a press release from NARHRI's website.]

Grant said three states, Maryland, Minnesota and most recently, Illinois, passed what has been come to be known as the "82 percent rule."

"Basically, it requires an in leaseback transactions to purchase the property for at least 82 percent of fair market value," he said.

"It's less about regulating the industry than it is about putting the industry out of business."

The requirement, in response to a handful of complaints, is an effort to protect consumers, but Grant says it is misguided because it virtually eliminates any chance of a profitable transaction.

Grant said the group successfully eliminated any 82 percent version of a Colorado law.

[Editor's Note: HoustonRealNews reported Illinois' bizarre explanation of the 82% rule before Gov. Blagojevich signed the legislation this month.]

"The bill itself has a whole series of disclosures so it makes it clear that the consumer will know exactly what he is getting into and it makes it far more difficult for any rogue investors to engage in deceptive trade practices," he said.

Grant pointed out that in enacting 82 percent-style laws, attorney generals and legislators often cite cases where home buyers were duped. But in the Colorado case, there was testimony from the opposite type of consumer: satisfied customers.

"Often, they have low income people testify how they were taken advantage of. But in this case, we found a college professor who had a positive experience," he said.

Grant does not deny the existence of abuses in the industry. There are obvious risks as well to consumers.

"But if consumers are willing to take those risks, fine. This idea is not inherently predatory," he said.

Among Grant's new initiatives is to contact the states about what the association views as acceptable legislation.

"Another of my goals is to improve our image in the media. It's going to be a long, hard slog, as some say, but it's worth trying. Part of our problem is that it's not as exciting of a story if someone succeeds," he said.

Editor's Note: HoustonRealNews goes to great lengths to report the successful lease option stories, in spite of recent Texas legislation making them more difficult to conduct.]

In its present state, NARHRI has been around for a little more than a year and attracted only a few members, Grant admitted.

It has attracted the support of some groups such as the National Real Estate Investors Association (NationalREIA), however, which said in a letter it supports the group's effort to be "a voice for our industry and to promote consumer protection through its initiatives."

NationalREIA urged members to join the group.

Grant said he is not sure why NARHRI has not attracted more members.

"It's been a tough sell for our industry -- maybe it's because we have a lot of people who are very independent," he said.

NARHRI says its goal is to eliminate fraud from the industry by monitoring federal and state legislation. NARHRI says it also exists to assist in educating lawmakers, government officials and others.

Attracting new members should also be a priority for Grant, who says that while he has left his old law firm, he might affiliate again with another.

"Another month and I'll probably be at another factory and back in the game, but I at least wanted to relax a bit," he said.

Grant's specialties as a lawyer include the areas of leaseback and hedge funds.

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Mr. Wilkening has written for HoustonRealNews, The New York Times, The New York Post and other publications. He previously worked as Press Secretary to FL Senate candidate Buddy McKay and U.S. Representative (FL) Bill McCollum.