D.M. tenants use 2009 law to sue landlords over bedbugs


An update from Joe Kelly:

Lee Rood, Des Moines Sunday Register, 1/19/2014

Acivil class-action lawsuit over bedbug infestations at two downtown Des Moines apartment complexes is having wide implications for landlords and tenants — before the legal issue is resolved.

Officials within the Iowa attorney general’s office tell me the tenants’ case pending against the former property managers of Ligutti Tower and Elsie Mason Manor is the largest of its kind since Iowa became the last state in the country to enact a bill giving citizens a private right of action in 2009. The Consumer Rights Act opened the door for more groups of consumers to recoup attorneys fees and damages if landlords or others were found in violation of the fraud statute.

“People are recognizing it more and more as an option,” said Ben Bellus, an assistant attorney general in the Consumer Protection Division. “We often get complaints about landlords. But until this was out there, there wasn’t a viable way for an attorney to help a lot of tenants.”

The change is worth noting here because the Reader’s Watchdog receives letters almost every week from apartment-dwellers concerned about bedbugs. Under Iowa’s landlord-tenant law, there was little help that could be recommended. The cost of suing was prohibitive for most tenants and many feared retribution from apartment managers.

But under the Consumer Rights Act, Iowans can sue individually or as part of a class if they suffer a loss of money or property due to deception, misrepresentation or other unfair practices. 

There are exceptions, but the act provides greater protection against all types of common deception, from shady car sales to home improvements. 

By law, the attorney general’s office must be notified of all such cases. To date, there have been 100 filed, about 15 of which are class-action lawsuits. Bill Brauch, who heads the office’s Consumer Protection Division, said a number of the cases relate to bedbugs, but his office does not count or categorize them. 

Roughly 300 residents of Ligutti and Elsie Mason signed on to the lawsuit naming former building managers First Baptist Housing Foundation of Johnston and American Baptist Homes of the Midwest. Tenants have said they were led to believe their apartments were habitable when they signed leases. Some said bites from the bugs scarred their bodies, forced them to throw away furniture and caused them to be shunned by other potential landlords and others. 

Polk County District Judge Joel Novak certified the tenants’ classaction status in 2011, a move that was ultimately upheld by the Iowa Supreme Court in a split 3-3 decision. Attorney Kevin Driscoll, who argued before the Iowa Supreme Court for building manager American Baptist Homes of the Midwest, said at the time that allowing the case to move forward would open “the proverbial floodgates” for such lawsuits. (Driscoll did not return my phone calls seeking comment.) Jeffrey Lipman, the tenants’ attorney, said he is preparing similar lawsuits in Iowa. He said he has one case pending against Jefferson Apartments in downtown Des Moines, as well as others in Illinois and California. The new law is a powerful tool, he said.

“Under the new law, not only do you get damages for ascertainable loss but if you show willful, wanton conduct, you can get up to four times that amount,” he said. 

Last year, Elsie Mason Manor, 430 Grand Ave., was bought by Newbury and Phoenix Family Ventures Inc., a Kansas City Mo.-based nonprofit housing services provider. American Baptist Homes of the Midwest managed the property prior to its sale. A similar sale to Levy’s group is pending on the 139-unit Ligutti Tower, 555 Fifth Ave. Newbury is managing both buildings, which are both being renovated. 

Not all landlords face liability, however, Lipman said. That hinges on whether landlords do a good job of inspecting, warning tenants and repairing the problem. 

“The mere fact you have bedbugs doesn’t give rise to liability,” he said. “There is a difference between introduction and infestation. … If apartment and hotel owners are doing appropriate inspections, warnings and prompt and appropriate immediate action, they are going to be fairly well protected and not found liable.” 

Polk County officials have reported increased bedbug infestations in apartments as well as hotels, following a worldwide trend. Hotel bedbug complaints increased at least threefold in Polk County in five years, according to a 2012 Des Moines Register review of state hotel inspection records. 

SuAnn Donovan, who oversees Des Moines’ zoning and inspections, said the city does not track the numbers but she believes complaints are rising. The city inspects all multifamily apartments every two years, but will also send out an inspector upon receiving a bedbug complaint. Under city code, pest control is the landlord’s responsibility within the tenant’s first six months, and the tenant’s any time after that. 

“It’s a complex problem,” Donovan said. “I have sympathy for both the tenants and the landlords.” 

Treating infestations typically requires regular inspections and treatment by experienced professionals. Lipman said it’s important for business owners to find quality pest control companies when problems arise. “If you have an infestation, it’s like a fire. You could have a loss of a structure,” he said. “You need to have special insurance or a rider to make sure you’re covered.” 

At least 22 states have specific statutes addressing bedbug infestations in rental properties (Arizona, California, Florida and Nebraska); hotels (Alabama, California, Kansas, Minnesota, Nevada, Ohio, South Dakota and West Virginia); institutional facilities (Michigan, Minnesota, Nebraska and Wisconsin); schools (New York and Utah); rail cars (Illinois); and migrant labor camps (Iowa, Nevada and Pennsylvania). 

Arizona, Kansas and Texas list bedbugs as public health nuisances. Rhode Island requires commercial pesticide applicators who use restricted pesticides to kill bedbugs to carry proper certification, according to the National Conference of State Legislatures. 

In 2012, the Iowa Legislature rejected a bill that would have shifted more financial responsibility for dealing with the pests on renters. Brauch said his office strongly opposed that legislation because it “went against the interests of tenants.” 

That bill, House Study Bill 520, required tenants to inform landlords about the presence of bedbugs within seven days of moving in. Failure to do that “shall be an acknowledgment by the tenant that the dwelling unit is free of bedbugs,” the bill said. Tenants also would have had to report bugs within 48 hours of noticing them. Not doing that could mean being held responsible for the costs of everything from extermination to replacing carpet and cabinets to repainting. No bedbug legislation is pending so far this year in Iowa, according to the Legislative Services Agency. 

Read the full article here: http://www.desmoinesregister.com/article/20140119/NEWS16/301190071/Reader-s-Watchdog-Des-Moines-tenants-use-2009-law-to-sue-landlords-over-bedbugs?Frontpage

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