Modesto Landlord to Pay $195,000 in Sex-for-Rent Case

A Modesto landlord accused of trying to trade rental discounts for sex has agreed to a $195,000 discrimination settlement with two homeless women, federal housing officials said Monday.

But the landlord, Kamal Lal, continues to deny that he made sexual overtures to renters and insisted that the lawsuit was a setup by a pair he had rejected as tenants.

Lal is accused of seeking out women at a Modesto homeless shelter and offering them rentals at reduced cost if they agreed to sex. More than a dozen women made claims against Lal as part of the legal proceedings.

Federal housing officials said they hope that the settlement sends a serious warning to landlords nationwide about dealing shelter for sex.

“The message of this settlement is that housing discrimination does not pay,” Andrew Cuomo, U.S. Housing and Urban Development secretary, said in a statement. “Large financial settlements will act as a deterrent against outrageous and illegal discrimination that has no place in our country.”

Officials said such rent-for-sex complaints are rare. “That’s an unusually large payment,” said David Egener, a HUD spokesman. “I don’t recall a case quite like this.”

Besides agreeing to pay the $195,000, Lal is barred from establishing contact with his former, current and future tenants. He agreed to attend classes on fair housing and hire a property management company to run his 20 rental units in the Modesto area.

Project Sentinel, a private California fair housing group that receives HUD funding, filed the lawsuit in 1998 along with California Rural Legal Assistance on behalf of Doreen Cordero and Jill Hickey.

The two women were both living at a Modesto homeless shelter when they met Lal separately in 1997.

Cordero said in court papers that Lal offered to show her houses. When she inquired about costs and any pet policy, Cordero said, Lal responded that he would reduce the rent and allow her dog if she would engage in a sex act with him. Hickey made similar claims in court papers.

Investigators working for Project Sentinel said in legal briefs that they found at least 10 other women who claimed that Lal made sexually explicit comments or requested sexual favors from them in exchange for a better apartment deal.

Lal, a native of Fiji who came to the United States a quarter of a century ago and did well in real estate, said he feels targeted as a minority.

“I never came on to any of them,” Lal said. “When I refused to rent to them, they went ahead with this brilliant idea.”

He said the controversy snowballed after the initial complaints. Investigators with Project Sentinel called tenants he had evicted, Lal said, and many of those welcomed the opportunity for payback.

“They retaliated against me,” he said. The lawsuit was “all a setup,” he said, and Hickey and Cordero “saw it as easy money.”

Lal said he and his wife, Usha, agreed to the settlement on the advice of their attorney to avoid the spectacle of a drawn-out trial.

“I’m a businessman,” he said. “You think any businessman with so much equity and property would say ‘date me and I’ll lower your rent?’ Do you think anyone is that stupid?”

But his opponents say the size of the settlement and details of the case undermine Lal’s persistent claims of innocence.

Liza Cristol-Deman, an attorney who represented the two women, said none of the tenants knew each other or could have traded stories. And all reported disturbingly similar run-ins with the landlord.

“The allegations came from so many different sources who were completely unrelated to one another,” she said. “There’s no way it could have been a setup.”

In addition, she said, there were a dozen women willing to testify in court who had no financial stake in the lawsuit. “They had nothing to get out of it,” she said, “other than to tell the truth.”

The settlement proceeds will be divided among Cordero, Project Sentinel and the lawyers. Hickey settled her portion of the lawsuit separately in 1999, before the resolution of the remainder of the suit this year.