Family Is Caught Between Agencies

If someone else had made the promise, Veronica Alvarado might not have been surprised when a deputy showed up at her door.

But the promise to help tenants of her rundown apartment on 41st Street came from the Los Angeles Housing Department: Pay rent into a city escrow account and utilities in the building will not be turned off, the letter explained. By law, tenants cannot be evicted for paying the city rather than the owner.

For months, Alvarado and her husband sent their rent checks to the city and felt secure. But in November, a sheriff’s deputy showed up with a notice that gave Alvarado, her husband and two children five days to vacate.

The source of the eviction was the federal Department of Housing and Urban Development, the family’s new landlord and the agency that is supposed to assist low-income tenants.

In the days since, the couple have found themselves caught between two behemoth agencies: on one side the city and its promised protections, on the other, the federal government and its demands.

A settlement brokered with the help of the office of U.S. Rep. Diane Watson (D-Los Angeles) may allow the family to stay in their home until Jan. 5 and to receive relocation assistance. In exchange, the family has agreed not to sue HUD or Golden Feather Realty Services, which oversees the building and other HUD properties.

The case demonstrates an absence of communication between two governmental agencies with responsibility for assisting tenants. It also underscores a rift between local housing officials’ expectations of HUD and the agency’s practices.

“What this case is about is the shocking display by [HUD] of evicting people who are paying the rent into the lawful local ordinance account,” said Rod Field of the Los Angeles Housing Law Project, the attorney who helped write a city ordinance governing escrow accounts and who represents the family.

Edessa George, who represented Golden Feather in the Alvarado case, said the agency did not know the family paid into the city escrow account.

The family was evicted, George said, because Alvarado and her husband failed to respond to several notices delivered by a law firm on behalf of Golden Feather and HUD.

“The firm did everything the right way,” George said. “Nobody’s trying to get around a law here.”

Yet, a HUD spokesman said letters demanding rent on HUD’s behalf were improper. In fact, after HUD acquired the building the family should not have been required to pay rent at all, the spokesman said.

Ability to Garnishee Rent

Such evictions could threaten to disrupt the tenant cooperation that is key to the city’s code enforcement program. The program is built on the premise that the city can essentially garnishee the rents at a building until an owner corrects the problems.

Buildings that are not up to code are placed in the city’s Utilities Maintenance Program and Rent Escrow Account Program. Tenants pay into the account--often reduced rents--until buildings are improved.

Without the programs, some landlords simply ignored housing laws “despite repeated citations for uninhabitable conditions,” said Garry W. Pinney, general manager of the city’s Housing Department, in a declaration for another Rent Escrow Account Program eviction case last year.

“Without eviction protections, tenants will not pay their rents into [the program] and recalcitrant landlords will continue to profit,” Pinney said in the declaration.

When landlords repeatedly fail to pay their bills, the Department of Water and Power refers the account to the Utilities Maintenance Program. The goal is to offer tenants an alternative to living without utilities by paying DWP bills through the city escrow account.

Veronica Alvarado and her husband, Arthur Lopez, live in one such building. In the three years that the couple have lived in the drab, two-story building, they had several owners.

“They didn’t fix anything,” Alvarado said, sitting in the living room of her one-bedroom apartment. “This carpet here we put down ourselves because what we had was very dirty and I have children. They said they were going to fix the bathroom too. They didn’t do it.”

But the money her husband makes selling grilled corn on the street, combined with the money she makes selling products at a swap meet, was enough to pay the rent.

By April 2000, the then-owners of the building had stopped paying the water bill and owed DWP $2,493.

The couple thought things would improve when they began paying into the city’s escrow program early last year, said Alvarado, who speaks only Spanish. But in July 2001, after the owner defaulted, HUD took over.

In September, according to court documents, attorneys working on behalf of HUD said they served the family two notices requesting information about their tenancy. In October, the firm served a notice asking the family to pay $350 in rent to the law offices of Steven J. Melmet and a three-day notice to “pay rent or move out.”

“If she had responded to all of those notices she would have been sitting quite pretty,” George said.

Eventually, the couple were served with a summons and complaint, the realty company attorney said. The complaint asks the family to move out, pay rent owed and damages.

But HUD officials said that the agency typically takes over unoccupied buildings and that it does not collect rents in occupied buildings.

“Our policy is we don’t collect rents from tenants,” said a HUD spokesman. “[The letters] were sent out in error. There will be no letters sent out like that on HUD’s behalf again.”

City records show the family continued to pay rent each month into the city escrow account.

But the attorneys representing HUD weren’t so diligent, city records show. Although HUD took over the building in July, the agency has yet to register the building, as the city requires. Nor did attorneys file the required declaration of intent to evict tenants.

The couple were surprised, Alvarado said, to find the notice to vacate--the last step before a deputy arrives to lock out evicted tenants. They had already paid their rent to the city. Alvardo said the family had no inkling of the eviction case, which had already been lost when they failed to appear in court.

In her own court challenge, Alvarado told the judge she had not been served regarding the eviction case. She asked that a hearing be held giving her an opportunity to respond. That request was denied.

“I thought the judge would help us because we were paying the rent well,” she said. “But it wasn’t like that.”

In a second attempt, Field represented the family and tried to present the problem through their eyes.

“The defendants were asked by one city agency or one government agency, the Housing Department, to pay their rent into the city’s programs,” he said, according to court transcripts. “They did what they were told to do and now they are getting evicted.”

And although HUD is the owner, it has failed to pay DWP bills at the building. That’s left tenants with the responsibility, Field argued in court.

According to transcripts, Superior Court Judge Brett C. Klein noted that the court sent a legal notice. He did not accept the claim that “neither husband, nor wife knew anything about this lawsuit pending.”

The judge found that the family might have had a defense but, instead, simply decided “that all of the notices coming to the house were not important enough to deal with.”

Ultimately, the judge upheld the eviction, but gave the family until Dec. 19--the day through which they had paid rent--to move out of their home. (The deal brokered by Rep. Watson’s office would extend the family’s tenancy by nearly a month.)

“She was in a Catch-22,” said Don Wilson, a senior deputy for Watson, who helped forge a settlement for Alvarado. “But she did comply with the city’s request.”

Because notices are in English, one HUD official said, a language barrier probably also contributed to the family’s problems.

The family will receive $5,000 in relocation fees under the settlement, but they will also enter a tight market. “We’ve been looking, but everything is so expensive,” said Veronica Alvarado.

Field sees a bitter irony in the case.

“This is the agency that is supposed to provide affordable housing, not put people on the street when they’ve paid their rent,” the attorney said of HUD.

Differing Views of Escrow Accounts

The case also illustrates the different ways these agencies view tenants who pay into escrow accounts.

“The fact that she was paying her rent to [the escrow account] does not mean she was a righteous, rent-paying tenant, authorized to be there,” George said. “That doesn’t necessarily mean anything.”

Los Angeles has a large number of rent fraud cases, George said. The family could have been the victim of scam artists, who sometimes break into boarded-up buildings and rent them out.

In other cases, she has encountered residents who are not lawful tenants of HUD properties but pay into city rent escrow accounts.

“They do it to get the relocation fees,” George said. Ken Simmons, assistant general manager, said he is not aware of any cases in which tenants paying into escrow accounts have faced similar problems. But Field said his office is handling other cases.

The tenants’ attorney worries that these evictions may ultimately weaken the city’s ability to pressure landlords into maintaining their property.

“That kills the whole code enforcement program.”