Landlord ordered to compensate Santa Rosa tenants displaced by mold

A Sonoma County judge has awarded nine families rental assistance and other emergency relief after high levels of mold and other dangerous living conditions forced them to leave their Santa Rosa apartment building in January.

The judge also found that landlords acted out of retaliation when they raised rents, then initiated eviction proceedings for every family following tenant complaints. Furthermore, the decision concludes the property owners willfully let the building fall into disrepair. Hazardous living conditions persisted for more than a year, and threatened the health of the tenants, according to code enforcement records.

Attorneys for the nine families, representing 35 people, sought emergency help while pursuing a lawsuit seeking greater damages that could carry far-reaching implications. The decision from Judge Gary Nadler, finalized Wednesday, provides each family with $395 per month for four months in rental assistance — the maximum amount allowed by law. His ruling could foreshadow the outcome of a larger, potentially multimillion-dollar lawsuit pending against the property's owners, David Silver and Jamie Clifford, who purchased the property in August, assuming any liability incurred prior to their ownership.

The tenants, represented by lawyers Josh Katz and Edie Sussman, are suing the property owners on 11 counts, including tenant retaliation, intentionally causing emotional distress and knowingly letting conditions at the building get worse. They hailed Nadler's decision as a major win.

'These people have been complaining for years and trying to obtain repairs from the current owners for months, so this ruling is a very big deal,' said Sussman, a prominent Santa Rosa attorney specializing in habitability issues. 'This money might not seem like much, but these people need every single penny right now, so this is a tremendous relief.'

Wednesday's decision preceded revelations that surfaced late Friday showing the violations were listed as closed in Santa Rosa's computer system last April — a point the property's current owners have made.

Mark Setterland, Santa Rosa's chief building official, said a city code enforcement officer took the word of the former property manager when signing off that repairs were complete, or were in the process of being made.

'The property manager for the previous owners assured our staff member that all violations had been, or were being taken care of, but our staff member at the time did not fully verify that violations had been cleared,' Setterland said. 'In good faith, we believed them. On the part of the city, we perhaps could have done a better job of verifying that.'

Setterland said the case prompted an immediate policy change in the way Santa Rosa code enforcement officers sign off on substandard housing violations.

'As a result of this case, we have completely reviewed our process for how we operate, and how we close cases,' Setterland said. 'We will be much more closely monitoring our cases.'

Santa Rosa code enforcement officers on Jan. 12 ordered tenants at 4050 Hoen Ave., in northeast Santa Rosa, to vacate the premises after health and safety inspections found that mold had spread throughout every unit in the building, creating an imminent health threat for residents who occupied nine of the building's 10 units. Reports also document a procession of problems at the two-story building, including rat and cockroach infestations, holes in apartment walls, shoddy heating units and leaky plumbing.

'History of maintaining properties'

Silver and Clifford declined to comment on the judge's ruling. Their attorneys released a statement on behalf of their clients.

'My clients have a history of maintaining their properties and improving them better for the tenants, themselves and the neighborhood,' the statement read. 'They are not the type of owners who allow things to fall into disrepair and continue to rent them.'

Wednesday's ruling from Nadler requires the two property owners listed under the apartment's holding company, Renaissance Housing Communities LLC, to pay each of the nine families a total of $1,580 for emergency rental assistance, as well as reimburse the tenants for their $1,200 security deposits. Nadler also ruled that property owners must pay to move and store the families' possessions, and allow the tenants back in when hazardous conditions are fixed.

Nadler did not accept requests from the property owners' attorneys to allow them to argue their side in a Santa Rosa courtroom Wednesday. He said in his decision that the tenants have demonstrated a clear hardship in their search for housing, and the evidence he reviewed warranted emergency help. For the former residents, their search has been bleak.

Sonoma County's tight real estate market, with limited rental stock and skyrocketing rents, meant many families had to live in hotel rooms reside with family and friends while they searched for housing.

Today, each family has secured either temporary or permanent shelter, but they said they're still struggling to make ends meet. For many, money granted by Nad-ler Wednesday will boost their income enough to help them qualify for another place to live. Some people said they'll use the money to buy new beds and furniture, others said they didn't plan to return to their former apartment even when problems are abated, and planned to use the money for a security deposit on a new apartment.

'We went out applying every day for two weeks, and we'd get no calls,' said Karla Orozco, who lived in a motel with her three kids and husband for two weeks before finding a two bedroom apartment in Roseland for $1,700 per month. 'We're still worried because we owe our landlord $2,000 for our deposit and we borrowed money from our relatives.'

In a seven-page decision, Nadler validated claims by attorneys representing all nine families that the property owners acted out of retaliation when they raised rents 50 percent in one month, from $995 to $1,450 per month, then issued each family 60-day eviction notices. The retaliation, Nadler said, was in response to longstanding tenant complaints about mold, vermin infestations and shoddy apartment fixtures.

Property owners 'have simply been retaliating rather than actually trying to fix anything,' Nadler wrote in his ruling.

Property owners disputed those claims, saying they learned about the tenant complaints for the first time in December, four months after they purchased the building from its previous owners, Kathleen Wood and Tadgh McSweeney.

Silver, one of the building's owners, explained in a declaration to the judge that they raised rents because their rates were significantly below market rate.

Robert Aaron and Tim Wilson, attorneys with the San Francisco-based firm Aaron & Wilson LLP, said they were retained by Silver and Clifford Thursday morning — the day after Nadler's decision in favor of the former tenants. The lawyers said in an email response that the owners have made 'tens of thousands of dollars in repairs' and they are working with Santa Rosa code enforcement officers to fix problems in the building.

Tenants said they have been complaining for years about a procession of problems in the building, including rats coming into apartments through holes in the walls, cockroach infestations, mold growing on walls and ceilings, broken heaters, inadequate ventilation and leaky plumbing fixtures. The years of complaints were elevated in December 2013 , which led Santa Rosa code enforcement officers to inspect the building. Less than a month later, the city issued a notice of violation, requiring the former property owners to fix the problems.

The issues persisted for another year, until tenants stopped paying rent on Dec. 1, 2014. That prompted the property management company to hire mold inspectors to survey each apartment. Reports for each apartment detailed significant water damage and dangerous levels of mold. Santa Rosa code inspectors also found hazardous electrical wiring and other structural issues.
Attorneys representing the property owners said Silver and Clifford had no knowledge about complaints regarding mold and vermin infestations when they bought the property in September 2014, but attorneys said they confirmed the property was clear of any code violations prior to purchase.

'The prior owners made zero disclosures related to this issue,' Wilson wrote in an email response. 'My clients assumed the property was in normal habitable condition.'

Setterland, Santa Rosa's chief building official in charge of deciding when dangerous living conditions pose such a threat that tenants must leave their homes, confirmed that none of the code enforcement files detailing hazardous conditions have been fixed, but because of an administrative error, all violations were shown as closed last April.

Attorneys representing the property owners rebuffed those claims. In an email, Wilson said the property owners paid to replace every heater in the building, every toilet and multiple appliances.

Wilson said the upgrades were not necessary but were made anyway.

He said upon learning about the conditions, property owners tried repeatedly to make repairs, but found it difficult with people living in the units. According to court documents, the owners then terminated leases.

'My clients were placed in a very difficult situation, and they were completely blindsided by the problems in the units,' Wilson wrote. 'In the end, my clients felt the only way they could get access to the units and repair them is if they were unoccupied.'

Given option to return

Previously, tenants had declined payments of $4,600 per family to leave voluntarily. Though some of the residents said they didn't plan to return, this week's court ruling gives them that option should they want it.

Their larger lawsuit, which still is in the early stages, could result in an award in the millions of dollars and take up to a year. They are seeking money for each family to replace belongings contaminated with mold spores, including furniture and clothes, as well money for emotional distress and physical harm caused by the mold. At least four children and one adult have reported asthma and other health conditions related to mold and rat urine. The tenants' lawyers are also asking that property owners return rent their clients paid during the year in between the date code enforcement officers filed the first notice of violation and December 2014, when the tenants stopped paying rent. They are also seeking remittance of a portion of the rent paid during the previous four years.

'Each family has suffered extensive emotional distress and physical harm,' Sussman said. 'I think they are certainly entitled to a very significant award of damages.'

Sussman previously represented a Santa Rosa family who won $1.3 million in 2007, what was then the largest substandard housing award in Sonoma County history.

You can reach Staff Writer Angela Hart at 526-8503 or angela.hart@pressdemocrat.com. On Twitter @ahartreports.