Attorney General sues Grant County mobile home landlord for sham sales used to evade city health and safety inspections — tenants live in poor conditions

Seattle landlord accused of consumer protection violations

KENNEWICK – March 18, 2015 – (RealEstateRama) — Attorney General Bob Ferguson today filed a complaint in Grant County Superior Court against Gary Chavers, owner of Sun & Sand Mobile Home Park in Mattawa, Wash., for forcing tenants to sign “purchase” contracts so that he could evade city health and safety inspections and thereby avoid the expense of improving the poor condition of the mobile homes. The tenants, mostly farm workers whose primary language is Spanish, were told they must sign the contracts or move out.

“As landlord, Chavers took advantage of a vulnerable population and devised a scheme to evade legal and financial responsibilities on the backs of his tenants,” said Ferguson.  “As the people’s lawyer, I will enforce the law to stop those who prey upon the disadvantaged.”

Background

Chavers, a Seattle Green Lake resident, has owned and operated the 54-unit Sun & Sand Mobile Home Park in Mattawa, Wash., as a rental property since 1991.

In 2009, a fire killed a mother and her two children in a rental duplex home not far from Sun & Sand.

In response to the fire and because of concerns regarding the safety and quality of rental housing, the city of Mattawa passed an ordinance requiring all rental properties to pass health and safety inspections.

The ordinance requirements include:

• No plumbing or sanitation problems that expose tenants to a risk of illness or injury.
• No holes or structural issues that expose tenants to the elements.
• No violations that increase the risk of fire.
• Wiring has to be in good working condition.
• Functional heating and ventilation systems that are not hazardous.
• Exits cannot be defective.

Less than 60 days after Chavers learned of the new city safety ordinance, he devised a scheme to “sell” the mobile homes to the tenants who occupy them. Through the sham sales, Chavers attempted to evade compliance with the Mattawa ordinance and thereby avoid the expense of improving the poor condition of the Sun & Sand mobile homes.

Overview of the scheme

Chavers directed the manager of the park to have tenants sign “purchase” contracts. The manager told some tenants they weren’t really buying the homes, but still renting them. The manager made other misleading statements: the contracts were like a “cover-up,” that it wasn’t really a purchase and that it “wasn’t a legal document.”  The manager also assured tenants that they could move out when they wanted.

Although the primary language of the tenants is Spanish, the contracts were written in English so that most of the tenants were unable to read them. They were not allowed the time to review the contracts or have someone assist in reviewing them before they had to sign.

Due to Chavers’ deception which led them to believe they would continue to rent the homes, and their fear of losing housing, most tenants signed the contracts.

In addition, Chavers himself did not treat the contracts as sales agreements.

For example, he didn’t pay excise tax on the “sales” nor provide legally required disclosures. In addition, he treats residents as renters, not owners, of the mobile homes. After tenants signed the contracts they continued to pay, and Chavers continued to accept, the identical monthly payment as when tenants rented the mobile homes. When they move out he returns their security deposits. Although they “purchased” their mobile homes, some tenants were told they could not take the mobile home with them when they leave Sun & Sand. Instead, Chavers has new tenants sign a sham “purchase” contract on the same homes.

Sun & Sand mobile homes remain in poor condition. Trailers are infested by cockroaches, and numerous residents, including children and babies have been bitten by bedbugs. One mobile home had a bedroom where the residents slept with a closet covered in green mold so all the clothes had to be thrown away, and a wall coated with mold due to a leaky window. Residents have been left without functional plumbing for days.

In addition, there are doors that blow open in the wind if not tied shut, water leaking through window frames causing rot and carpet so old that the staples poke out. Tenants ask for these conditions to be repaired but Chavers either ignores the tenants’ requests or takes months or years to complete the repairs.

Overview of the lawsuit 

The AGO lawsuit claims Chavers’ actions in creating this sales scheme are unfair and deceptive business practices that violate the Washington Consumer Protection Act, Retail Installment Act and Consumer Loan Act.

The AGO is asking the court to declare that the sales were a sham. As a result, tenants might have the option to either void the contract and continue to be treated as the renters they actually are, or buy the mobile home under fair market terms the court would set. Under either scenario, Chavers must repair all mobile homes to make them habitable. The city is tasked with enforcing the ordinance.

The AGO is seeking civil penalties of up to $2,000 per violation of the Consumer Protection Act, restitution for residents and attorneys’ fees and costs.

Columbia Legal Services brought this case to the Attorney General’s attention.

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The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Attorney General Bob Ferguson is working hard to protect consumers and seniors against fraud, keep our communities safe, protect our environment and stand up for our veterans. Visit www.atg.wa.gov to learn more.

CONTACT:

Peter Lavallee, Communications Director, (360) 586-0725; PeterL (at) atg.wa (dot) gov