The past two years have been horrendous for Judy Shea, whose Glendale home is under the control of a court-appointed receiver hired by the city to repair massive health and safety code violations. She says she's felt frustrated and confused as construction and legal fees climbed to more than half a million dollars, fearing she'd lose the property she bought to be closer to her grandchildren.
This week, that fear became reality, and city officials and prosecutors say Shea's nightmare is of her own making.
A Los Angeles Superior Court judge signed off on selling the property at 4104 Lowell Ave. for $699,000 on Wednesday. Shea won't get a penny. In fact, the money won't be enough to cover all the renovation-related fees.
The city may end up spending $61,000 for legal fees associated with the case, the first of its kind in Glendale.
“I'm on a fixed income. I'm retired and I'm disabled,” said Shea, 68, after learning about the approved sale. “I had a stroke, I believe because of this. I don't want to have another one.”
Neither city officials nor Shea expected that she would lose her house when the receiver first took over two years ago. She blames city officials for being uncooperative, but prosecutors and Los Angeles Superior Court Judge Donna Fields Goldstein place the blame squarely on Shea and her son.
Her son, Jesse Yzaguirre, began working on the house Shea bought for $225,000 in 2001, almost quadrupling its size to 4,919 square feet, but doing so without city design approval or construction permits, according to the city. In 2005, city officials filed a misdemeanor criminal complaint against him for the illegal work and he was put on probation for three years.
After spending an estimated $100,000 on construction work, Shea came in to rectify the situation, but city officials continually denied her plans, calling them incomplete.
In June 2010, city inspectors found a second story had been built without permits. They also found a multitude of health and safety code violations. Six months later, Goldstein appointed a receiver, Mark Adams, to get the house in compliance and fix safety problems.
Once Adams took charge, Shea, who now lives with her brother in Desert Hot Springs, lost her rights as the property owner.
The incident marks the first time Glendale had used such an extreme measure, but it's not uncommon for government entities to hire receivers to correct health and safety code violations, Adams said. Of the 85 receiverships he has managed, though, only one other property had to be sold against the owner's will.
“This is a rare circumstance for me where the property owner loses the property involuntarily,” he said.
Shea's home was in horrible shape when he started, Adams said. Undocumented workers lived in the attic. Unconnected beams supported the foundation of the home. A botched drainage system encroached on a portion of a neighbor's property.
Shea fought Adams every step of the way, both of them said, bringing in several lawyers and unsuccessfully attempting to file for bankruptcy.
Shea said Adams authorized expenditures that weren't related to health and safety codes, such as kitchen appliances and bathroom fixtures.
“He just tore my whole house apart and remodeled the whole thing,” Shea said.
The cosmetic improvements were necessary to get the house market-ready, Adams said, noting that once the construction cost skyrocketed, it was unlikely Shea could pay the bills, which had been covered by private loans. Electrical, drainage, insulation, demolition of nearly half of the house's square-footage, gas line, fire safety and other work made up the bulk of the costs.
A general contractor Shea hired wrote in a Sept. 5 court declaration that fixing just the health and safety code violations should have cost, at most, $65,000, but according to Adams' records, the subcontractor work alone totaled nearly $338,000.
Shea filed a complaint with the District Attorney's consumer affairs division, calling the receivership a scam, but says she hasn't received a response.
Although the property is slated to be sold to a newlywed couple for $699,000, down from an original $750,000 listing, Adams expects a funding gap. JP Morgan Chase Bank, with which Shea took out a $150,000 mortgage when she bought the house, may not get paid, nor may the city's hired attorneys, a cost the city may have to swallow. Adams may have to absorb some losses as well.