Friday, December 11, 2009

Suits seek receiver for apt. complexes

Complaints of bed bugs infestations, faulty plumbing and numerous notices threatening utility service disconnection have led hundreds of residents at three area apartment communities to ask a Hamilton County Common Pleas Court judge to appoint a receiver to take over the management of their complexes.

Tenants at Park Valley Apartments in Mount Airy, Williamsburg of Cincinnati in Hartwell and Woodbridge on the Lake Apartments in West Chester have filed separate lawsuits claiming that Cuyahoga Falls, Ohio-based Karam Managed Properties has failed pay utility bills on time and isn't keeping up with critical maintenance jobs.

Earlier this year, gas and electric services were cut off at each of the complexes for up to two weeks, because Karam had failed to pay its bills, according to the lawsuits. Park Valley and Williamsburg residents were also left without water, and trash collection services were stopped - leaving dumpsters overflowing, according to court documents papers.

Tenants also say Karam failed to properly exterminate apartments that had contained bed bugs and roaches, allowing the infestations to spread.

"We've been stating that there has been a problem with these properties since August, and since then nothing has changed substantially," said Susanna M. Meyer, a lawyer with Westwood-based Hyle & Mecklenborg, which represents tenants at each of the complexes.

"Karam has continued to say that the problems have been fixed, but clearly they have not," she said. "Building violations still exist and there are substantial balances" as of Wednesday due to the Cincinnati water works and Duke Energy.

Karam has denied many of the allegations in court filings, and opposes the assignment of a receiver at any of its properties, said the firm's lawyer, William Ellis of downtown-based Roetzel & Andress

Ellis said tenants are not in jeopardy of losing utility services and haven't been since the cut off earlier this year.

"By the time they filed the lawsuits, it was already taken care of," Ellis said. "Karam is doing everything they can do to make this work for the tenants and the only impediment to this are the plaintiff's filing the lawsuits - trying to reduce their rents and give (Karam) bad publicity."

Court documents state that Karam has invested more than $10 million in its properties since their purchase more than two years ago.

Meanwhile, the tenant's motions have been joined by an additional request for a receiver by Prudential Mortgage Capital Funding. The lender claims Williamsburg Acquisitions LLC, has defaulted on several provisions of its $52.5 million loan for the more than 1,000-unit Williamsburg complex, which was built in 1968.

Among other issues, Prudential claims the Williamsburg loan fell into default after several mechanics liens were filed by contractors who say they haven't been paid for work at the complex.

Separate lawsuits from vendors and contractors claim that more than $1.2 million in mechanics liens have been filed for work the Williamsburg property, more than $424,000 in liens for work at Park Valley (which was built in 1973) and 11 mechanics liens with an unknown total for jobs at Woodbridge.

In addition to the three communities engaged in the receivership battle, Karam manages the Ferncrest and Renata Apartments in Westwood and Bavarian Woods Apartments in Middletown.

Ellis said he was not engaged in negotiations involving Prudential.

"Karam has worked diligently to correct everything," he said. "They bought these properties and put a lot of their own money it and they have continued to do so throughout the course of all of this."