Renters Could Lose Their Home Because Landlord Didn’t Pay Water Bill: NPR
Tenants in 1,400 rental units in Indianapolis are on the verge of a water outage due to nonpayment from their business landlord — a tenant-landlord dispute of such magnitude that city and district officials the state intervened with legal action to avoid the possibility of a mass eviction.
With an unpaid $1.7 million water bill and cash, an Indianapolis utility company this week issued notices to residents of four apartment complexes owned by the nonprofit JPC Affordable Housing Foundation. Foundation, warning that their water could be cut off in September.
With the water shut off, the city’s health department could declare the units in violation of local health codes, prompting a full-scale emergency eviction, as first reported by the Indianapolis Star.
A closure would result in a “problem of mass homelessness in our community,” the city wrote in a court document filed last month.
In a statement, Indianapolis Mayor Joe Hogsett called the decision by utility company Citizens Energy Group “incredibly disappointing.”
“The City is considering all options in response and will continue to work with all affected parties to put the well-being of tenants and their families first,” Hogsett said.
The owner blames the pandemic for financial problems
At the four Indianapolis properties in question, tenants do not directly pay for their own water usage. Instead, their owner pays the collective bill for each complex. Tenants’ utility payments are combined with their monthly rent payments.
But in the spring of 2021, JPC stopped regularly paying water bills, court records show.
The company says it was unable to pay due to financial hardship caused by the pandemic because “an overwhelming majority of tenants” failed to pay rent, according to affidavits signed in May and July by its president, Oron Zarum.
The company has also failed to provide evidence of large-scale non-payment. Zarum did not respond to NPR’s request for comment.
By February this year, the unpaid bill had risen to $1 million, according to court records.
On February 17, Citizens Energy shut off water to two apartment complexes owned by JPC, affecting hundreds of tenants. The next day, the city of Indianapolis agreed to pay the utility company $850,000 to restore water service.
City officials say they are unwilling to consider another payment to avoid the September shutdown.
“We currently do not trust Citizens to share our priorities for ensuring that residents of these buildings do not lose their public service,” Indianapolis City Spokesperson Mark Bode said in an email to NPR. “Without this trust, we cannot be sure that additional funds to settle outstanding bills would be well spent.”
Shutdowns are common and protections vary widely
It’s relatively common for utility companies to threaten to cut off service to tenants when landlords don’t pay, said Sam Whillans, a member of the Natural Resources Defense Council who studies housing and utility affordability — though it is “unusual to have so many tenants”. affected simultaneously,” he added.
Protections for renters in similar circumstances vary widely from state to state. Some states prohibit utility cuts during certain months, or when tenants have low incomes or have certain medical conditions. Some places, like New York, don’t allow water shutoffs for nonpayment.
In Syracuse, the city banned water shutoffs in similar situations after a court ruled the city erred in cutting off service to a woman whose landlord was not paying.
“There is very little evidence that shutting down utilities to a tenant is an effective way to recover from a delinquent landlord,” Whillans told NPR. “In many cases, landlords who repeatedly refuse to pay are bad actors who also have many other outstanding violations, so a lack of water service is just one more violation on the books. “
When a landlord’s nonpayment forces a utility company to turn off the water, the consequences can be enormous for the tenant, Whillans said.
A lack of water can force tenants to undertake an expensive and disruptive move. Child protective services or a family court could decide that a house without water is not safe for children, which would require the children of tenants to be removed from their house.
Ongoing legal action and uncertain resolution
In Indianapolis, the closure is scheduled for September 30. “If an inhabited building leaks water, the Department of Health can request emergency evictions,” said Bode, the Indianapolis spokesperson.
In April, the City of Indianapolis and Citizens Energy filed a lawsuit simultaneously against JPC, along with its various associated companies and board members, seeking reimbursement. The Indiana State Attorney General also filed a lawsuit challenging the organizations’ nonprofit status.
For its part, in court documents, JPC disputes the sums due to the water service. The company also said it was engaged in good faith negotiations over a payment settlement before the lawsuit began. He also claims that because Indianapolis used federal COVID-19 relief grant money to end the shutdown in February, the company is not obligated to reimburse the city.
Litigation is ongoing in all three lawsuits. The tenants of the 1,400 units are waiting for a resolution.
So far, the city of Indianapolis has criticized the utility’s threat to shut off the water. Letting the litigation play out — uninterrupted — is the best course of action to recover payment, Mayor Hogsett said.