Settlement in Long Simmering Dallas HMK Housing Controversy

Landlord HMK first refused to repair old houses, then sold to tenants with strings attached

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The parties announced a settlement Thursday in the HMK affordable housing controversy that has been simmering for years in Dallas.

Landlord HMK first refused to repair old rent houses, then sold them to tenants with strings attached.

Now, HMK has agreed to drop controversial restrictions in mortgages it granted in 2017 on substandard properties.

“We are here today to dismiss this case. We’re doing this because HMK has done everything that we asked of them,” said Buyers Attorney Wayne Krause Yang.

The restrictions allowed HMK to demand the property back from buyers and granted the company the right of first refusal on future resales.

Through an interpreter Thursday, buyer Roberto Barahona said the settlement is a big relief.

“Before, we felt that the company would take the house from us at any moment,” he said.

HMK Owner Khraish Khraish Thursday denied the restrictions were predatory, but rather that they were imposed because he was trying to protect the neighborhood from buyers who may cause problems for others.

Khraish said he also wanted to protect home buyers from land speculators. But in the past three years, land values in the area have soared and the buyers have equity in the properties that they can use to protect themselves.

“These provisions were never intended to cause anxiety but were there as lender protection. Those provisions need no longer exist. They have served their purpose,” Khraish said. “If my community of homebuyers sleeps better tonight knowing that their mortgages are more secure, then I sleep better as well.”                                

The controversy began in 2016 when the City of Dallas ordered owners of substandard rental homes to comply with the same standards as rental apartments.

Khraish said hundreds of old houses he owned could not be brought up to modern codes. He threatened to evict the families that had nowhere else to go and demolish the houses. He accused the City of Dallas and then Mayor Mike Rawlings of causing homelessness.

The city recruited Catholic Charities to help the families relocate and many did.

In 2017, Khraish announced the plan to sell more than 100 of the houses to tenants. In 2018, Legal Aid of Northwest Texas helped three tenants file the lawsuit that was dismissed Thursday.

Barahona said he feels more confident about making repairs and investing in the home because it will not be taken from him.

“We are much happier now the way our family is now,” he said.

Khraish said the same settlement terms with revised mortgages would be offered to all 140 or so families that purchased his homes.

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