Tenants of ‘Affordable Housing’ Development Accuse Owners of Operating Fraudulent Bait and Switch Scheme - Fernald Law Group
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Tenants of ‘Affordable Housing’ Development Accuse Owners of Operating Fraudulent Bait and Switch Scheme

Tenants of ‘Affordable Housing’ Development Accuse Owners of Operating Fraudulent Bait and Switch Scheme

COMPTON, Calif., Feb. 11, 2015 /PRNewswire/ — Owners of a City of Compton-sponsored affordable housing community known as Alameda Court, are accused of perpetrating an illegal ‘bait and switch’ scheme against its residents.

According to a new lawsuit filed Tuesday, owners of Alameda Court falsely advertised the units, located at the corner of Myrrh and Alameda in Compton, as an affordable “rent to own” opportunity. Under their leases, residents agreed to pay an above market rental rate for their units and in exchange, their security deposit and a portion of their rent would be held in trust and used as a down payment for the purchase of the unit.

Each lease contained the following “rent to own” provision which stated: “this is a lease with option to buy, upon buyers’ closing, sellers will credit buyers $[200-350]/month for the total months of rent paid and security deposit toward the purchase.” Residents were further promised that the purchase would be financed in part through a City of Compton sponsored lending program.

Lured in by these false promises, Compton families quickly snapped up the new units at Alameda Court in 2011 and 2012. Residents were encouraged to upgrade their units and to make their own repairs, since “they technically owned the units.” Their dream of home ownership, however, was unfortunately not to be.

According to the lawsuit, as residents began to inquire as to the purchase opportunity and, more importantly, the whereabouts of the money supposedly being set aside as a down payment, they were told by Defendants that the units were no longer available for purchase and that their ‘down payment’ would not be refunded.

Thereafter, the promised home ownership opportunity was purportedly replaced by month-to-month tenancies. When residents refused to sign new leases that excluded the rent to own provisions and began lodging complaints with Compton city officials, the lawsuit alleges that Alameda Court’s owner, developer, and realtor initiated a campaign of harassment and intimidation against the residents in an apparent effort to force these would be homeowners from their units.

According to the lawsuit, Alameda Court’s resident property manager, Doug Baker, “accessed Plaintiffs’ mail boxes without authorization, hired third parties to loiter around the complex for the purposes of scaring and intimidating Plaintiffs, verbally abused Plaintiffs and other residents, refused to accept Plaintiffs’ rent, threatened to raise Plaintiffs’ rent if they persisted in claiming their deposits, charged all manner of cash penalties for purported community violations and/or late rent, randomly caused the towing of Plaintiffs’ automobiles, etc.”

“These folks have endured hellish ongoing harassment,” says attorney Brandon Fernald who is representing Plaintiffs in their lawsuit. “My clients remain determined to get their story out and hopefully prevent other families from suffering through a similar experience.”

Ironically, the Alameda Court project was enthusiastically supported and endorsed by the City of Compton. In November 2007, then Compton City Councilmember Isadore Hall touted the groundbreaking of the Alameda Court affordable housing development as “another shining star in the rebirth of Compton.” Mr. Hall, a resident of Alameda Court, appears to have been exempted from the treatment suffered by the other residents.

Unfortunately, the city that so enthusiastically praised Alameda Court and the efforts of its developers at the project’s inception has now fallen silent. Initially agreeing to meet with Plaintiffs, city officials – including Compton’s Mayor and City Attorney – have been unable or unwilling to intervene.

Conditions have not improved either as residents continue to endure the same abusive practices perpetrated by Alameda Court’s management. Facing continued harassment and yet another rent increase (which residents were told was approved by the City of Compton), Alameda Court residents have now taken matters into their own hands and filed a lawsuit against Alameda Court’s owners, developer and realtor for fraud, breach of contract, intentional infliction of emotion distress, discrimination and unfair business practices.

If you would like further information, please contact attorney for Plaintiffs:

Brandon C. Fernald, Esq.
Fernald Law Group LLP
510 W. 6th Street, Suite 700
Los Angeles, CA  90014
Phone number:  (323) 410-0320
Email:  [email protected]

A copy of the lawsuit, captioned Annie Logoai v. Alameda Court LLC, Case No. BC572165, may be found here.

A copy of the press release can be accessed here.

Fernald Law Group LLP is a trial litigation boutique with offices in Los Angeles and Las Vegas.