(Twitpic by BourbonRealty)
Real estate representatives from the gulf region secure $68 million in financial reparations for losses in sales they attribute to the oil spill
By Nicholas Moroni
Recognizing the adverse financial impact that the BP oil spill has had on the real estate industry in the gulf region, several industry representatives from five states in the area recently flew to Washington, D.C. and successfully lobbied for $68 million of BP's $20 billion escrow fund, The Daily Comet, a local newspaper in Lafourche, La., reported on Sunday.
According to the article, real estate agents motivated by a post-spill sales abatement, decided to make certain that they would be compensated through BP's escrow fund, which is being adminsitered by Washington attorney Ken Feinberg's Gulf Coast Claims Facility. The piece also states that a driving force in the decision to pursue lobbying was a shared concern that the real estate industry would not be provided for under the auspices of the Oil Pollution Act of 1990, which guides for the GCCF protocol - either through the GCCF or through litigation.
"If realtors were to sue BP under the Oil Pollution Act, they would not be awarded any funds," Malcom Young, CEO of Louisiana Realtors, told The Comet.
It should be noted though, that under OPA, spill victims with legitimate claims are to have their losses accomodated, with the possibility of interest, by the responsible party - in this case, BP, however, the fund will not accomodate moratorium-related losses.
Realtors are saying that buyers are backing out because of lack of capital due to a job shortage that now permeates the region as a result of the drilling moratorium, while out-of-town lenders are skeptical to loan to oil industry employees that could be out of jobs and default on payments. The region is heavily dependent on the oil industry.
Finally, the article cites a study by the research group CoreLogic which estimates that the gulf region could lose up to $648 in homes sales this year, and as much as $3 billion over five years.