Saturday, March 05, 2016

Fearing Probable Boot, Turmoil Sets In For Low-Income Seniors, Renters w/ Disabilities In Rural 26-Unit Federally-Subsidized Building After HUD Declares Landlord In Default On Section 8 Contract; Failed Inspections, Inoperative Elevator & Fire Alarm System Violate Agreement w/ Gov't

In Calais, Maine, the Bangor Daily News reports:
  • The elderly and handicapped tenants of the 26-unit St. Croix Apartments complex in Calais are uncertain whether they will be able to stay in their federally subsidized apartments.

    The U.S. Department of Housing and Urban Development has issued landlord Aaron Gleich a notice of default, effective March 1, for “failure to maintain the property in decent, safe and sanitary condition as required by the contract he has with HUD,” said agency spokeswoman Rhonda Siciliano.

    The St. Croix Apartments are subsidized through the government’s Section 8 program, which means Gleich has a contract with HUD in which the federal agency pays a portion of the tenants’ rent directly to the landlord. In 2015, Gleich received a total of $168,929 from HUD for the apartments, which in this case are reserved for low-income elderly and handicapped tenants, Siciliano said.

    Gleich was issued the default notice on Jan. 21. Because of the safety and health violations, the tenants will have to move out, Siciliano said [].

    The complex, which is three interconnected buildings, failed the last three HUD inspections, performed on Aug. 22, 2014; Feb. 18, 2015; and Aug. 12, 2015, with scores of 56, 28 and 52, on those respective dates. The scores of those inspections, which examined the condition of the walls, plumbing and heating systems, windows, appliances and even the grounds, were rated on a total of 0 to 100, with 100 being the best. Anything under 60 is considered failing by HUD standards.

    The major safety violations cited by the inspectors were a broken down elevator and a fire alarm system that still doesn’t work properly, Siciliano said.

    Inspection reports obtained from HUD also indicate other less serious deficiencies such as cracks or gaps in walls, peeling paint, a handrail missing from stairs, overgrown and penetrating vegetation, damaged door locks and inoperable appliances.

    Resident Phyllis Stevens said on Feb. 18 that the complex is in poor condition. “Every apartment, I think, has some kind of issue,” she said.

    Gleich, who lives in New York City, said his Maine attorney, Ben Cabot of Dover, is working with city officials to get the elevator and fire alarm repaired.

    Gleich said on Feb. 17 that he had the elevator repaired once, but it broke down again soon after so he didn’t pay the contractor. He said he hasn’t been able to find another contractor since then. “I’m not a slumlord or anything like that,” Gleich said.

    Cabot said many elevator contractors are not willing to “make the trip to Calais, Maine, without charging an exorbitant fee for the trip.”

    The attorney said he is working to get the elevator repaired as soon as possible but could not provide a time frame because that is subject to contractor availability. He also said he was working to get the fire alarm system fixed but was having similar issues getting someone lined up.

    Gleich said [] that he took care of the other deficiencies identified by HUD as soon as he found out about them.

    He also said he did not receive any notices from HUD about the complex’s previous failed inspections. “I thought everything was up to snuff,” he said. “Now that I know about it, we took care of it lickety split.”

    He believes HUD will reverse its decision when repairs to the elevator and fire alarm are done. “If need be, we’ll jump into court,” he said.

    Despite the issues with the building, residents are hoping to find a way to stay.

    Attorney Judson Esty-Kendall of Pine Tree Legal Services(1) filed a lawsuit on Feb. 17 in Washington County District Court on behalf of 17 of the tenants in the complex. The suit claims Gleich violated the state’s warranty of habitability which requires landlords to maintain conditions that protect the health and safety of tenants. “We’re trying to get the court to order that the landlord fix these things,” Esty-Kendall said [].

    He acknowledged that even if the repairs are made, HUD may not change its mind about reinstating Section 8 subsidies.

    Siciliano said [] that HUD does not expect to change its position.

    “The owner has been on notice for many months that the conditions of the property are putting the tenants at risk,” she said. “The owner has refused to make the necessary repairs to it.”

    Siciliano said apartment owners are supposed to come up with a plan to make repairs after receiving a failing grade in an inspection. Gleich was given notices of default after each of the failed inspections, dating back to 2014, she pointed out, and Gleich “was non responsive.”

    Siciliano said there is no deadline for when the tenants need to move out, but they can’t stay indefinitely. A HUD relocation contractor will work with them to find suitable housing. “There will be a coordinated effort to move all of the residents out as soon as possible,” she said.

    Although HUD will cease paying rent subsidies to the landlord as of March 1, Gleich is prevented from raising Section 8 tenants’ rent to cover the shortfall, according to the notice of default from HUD.

    Under the Section 8 housing program, qualified low-income tenants pay no more than 30 percent of their adjusted income for rent.

    Siciliano said HUD works hard to help landlords keep their buildings up to standards because in many rural places such as Calais, there aren’t many other subsidized housing options available for low-income Section 8 participants.

    An online listing of available Section 8 rentals shows only three units in Calais and only four more within 30 miles.

    Tenant Stevens said there is a sense of “panic” among the residents and that tempers are short because of the uncertainty about how long they will be able to remain in their homes.

    We’re like a family here,” she said. “Nobody knows where they’re going to be or how we’re going to find each other [after a move].”
For the story, see Elderly, handicapped tenants fighting to stay in Calais apartments.

Editor's Note:

With rents and property values going through the roof, one may wonder if the landlord (who, by the way, is a real estate developer) actually allowed the conditions precipitating the failed property inspections and subsequent HUD default to arise. This way, he can 'un-encumber' himself of what may now be an undesirable HUD contract, get rid of his existing low-income tenants, & pursue possible redevelopment of the 26-unit premises to either pocket more lucrative rents, or peddle the apartments as condominiums.
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(1) Pine Tree Legal Services is a statewide, non-profit organization providing free civil legal assistance to low-income people throughout Maine.

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