Breaking the mold: complaints spotlight Asheville’s rental housing issues

This is part of a series on rental housing issues in Asheville, it also includes Off the records, on the lack of easy access to complaints about landlords, and a list of resources for tenants.

Lorre Diamond moved to Asheville with her roommate earlier this year. The 65-year-old is semiretired but still works part time as an adviser on health and allergies. They thought they'd found a relatively affordable apartment at Pinnacle Ridge (600 Merrimon Ave.), a complex near UNCA that’s home to a mix of retirees, immigrant families and college students. But upon moving in back in February, they noticed a damp odor coming from underneath their sink.

“The mold was coming up every time we turned on the heat or the air conditioner,” she recalls. “It was a mess, and [the management] just didn't care.”

Multiple other residents of Building 23 have also described problems with mold and general disrepair, though most spoke on condition of anonymity, fearing landlord retaliation. And on June 28, resident Nadeen Pennisi, claiming asthma attacks so severe she had to go to the emergency room, sued Colonial Properties Trust, which then owned the Merrimon complex. The Birmingham, Ala.-based company, which has holdings across the Southeast and Southwest, did not respond to repeated requests for comment.

Between January and April, a number of tenants complained to the city’s Building Safety Department, which investigated and ordered various repairs. On June 28, the same day Pennisi filed her lawsuit, Colonial Properties sold the complex to the Greensboro, N.C.-based Hawthorne Residential Partners for $13.3 million. And on Oct. 1, the Memphis, Tenn.-based Mid-America Apartment Communities bought Colonial Properties for $2.17 billion.

Neither Colonial nor MAAC has responded to repeated requests for comment about either the tenant complaints or the lawsuit. But Samantha Davenport, principal president of Hawthorne Residential Partners, said that while she couldn't comment on the issues under Colonial's tenure, "We didn't discover anything like that" when examining the property before buying it. Since then, said Davenport, Hawthorne has renamed the complex Hawthorne Northside and embarked on an extensive renovation project to improve the property and amenities for tenants, including an overhaul of the plumbing systems.

Meanwhile, on Sept. 27, an attorney representing Colonial Properties filed a response to Pennisi's lawsuit after having requested multiple delays. "Defendant lacks the knowledge or information sufficient to form a belief as to the allegations," the response repeatedly states. It acknowledges that Pennisi was formerly a tenant in the complex but declines to confirm the details of her lease.

Colonial does assert that it promptly got to work repairing the problems identified by city inspectors, and the city's development website shows that permits were issued for the repair work back in April, but there is no indication of any follow-up inspections.

The city can inspect property if a tenant complains, but under state law, staffers say, they can't fine landlords for providing substandard housing and, except in extreme cases, have no recourse if a landlord ignores an order to make repairs. City officials can't even require that mold be cleaned up after a leak is fixed.

This casts doubt on the ability of local governments to deal with what many see as a serious health issue, leaving tenants feeling powerless to get their grievances addressed. And with the Asheville area having some of the highest housing costs in the state and one-third of its working population earning low wages, many local renters face similar issues.

Walled up: According to tenants, there were issues with one building’s crawlspace, water damage, mold and ductwork. City inspectors also detected many of the same issues.

Mold, rot and other woes

Diamond and her roommate noticed the smell as soon as they moved into their apartment, though Colonial Properties claimed it had recently cleaned and made repairs, they say.

“The smell preceded us,” Diamond reports. Allergic to penicillin, she worried about how the mold might be affecting her health. So in April, she had a friend who’s an environmental inspector come by and check it out. He found mold inside the kitchen wall and in the crawlspace. Photos he took reveal holes in ductwork, rotted cardboard in the crawlspace, prior fire damage and extensive mold.

“There's so much that needs to be done to fix the entire complex,” notes Diamond’s roommate, who declined to be named. “There's things they've just done wrong.”

Another tenant, a recent UNCA graduate, says his apartment had cockroaches, a wet, moldy smell and black mold on the floorboards. Rather than replacing the flooring, he says, the management simply varnished over the mold. A Chinese immigrant studying in the U.S. also noticed the smell but didn’t know what was causing it. Concerned about his 4-month-old child’s health, he says he wanted to move out, but that he had to either give 60 days’ notice or pay Colonial the equivalent of two months’ additional rent. Several other residents reported similar experiences when they tried to leave.

Merely to apply for an apartment in this ostensibly affordable housing complex, tenants assert, Colonial charged nonrefundable “administration” fees of more than $200 just to process the paperwork. And despite the lack of repairs and the health issues, the recent UNCA graduate says his rent went up $75 a year.

“I think that's unethical,” he says.

Diamond agrees. “I felt like the management preyed on these young people,” she says. “They knew they had a lot of college students, so they'll get away with whatever they can.”

Pinnacle Ridge management staff, she claims, denied that the city had ordered repairs, and even that there was a mold problem. The couple considered finding another place to live, “but to get out of our leases, oh my gosh, we don't have that kind of money,” Diamond’s roommate notes.

Breathless

Pennisi and her husband, Carlo, moved into a one-bedroom apartment in Building 23 last October, having paid a nonrefundable $325 just to apply, they say. “We didn't have hot water when we moved in,” says Carlo, “and they eventually paid for a hotel for us.” The couple says their rent was $702 a month.

They, too, smelled mold, and Nadeen began having nightly asthma attacks. According to her lawsuit against Crit-IV NC, Colonial's parent LLC, Nadeen experienced “trouble breathing, burning sensation in the eyes and throat, constant congestion, coughing and headaches.”

The problem got worse when they turned on the heat, spreading the odors throughout the apartment. So they kept the heat off and left the windows open, even in winter, placing heavy-duty garbage bags over the sinks and cupboards in an effort to contain the odors. The lawsuit, which is pending, describes the conditions as “dehumanizing” and claims that Colonial Properties repeatedly refused to make repairs.

“They had people living under incredible, miserable conditions. It’s just not right. There are families with kids here.” —Former Pinnacle Ridge resident Carlo Pennisi

The suit cites extensive problems with the building, including:

“A foul odor inside the entire apartment and the common area which, upon information and belief, is caused by soiling materials in the crawlspace in the building, including small animal feces and urine, mold, exposed damp soil, dust, fire extinguishing powder, former septic water leaks, soot from previous furnace issues, insect parts and droppings, household organics from decades of occupation.”

The suit also asserts that poor ventilation and leaks in the bathroom and walls exacerbated the mold problem.

City inspectors had similar findings. An April 29 examination of Diamond's building in response to her complaint revealed “various mold, standing holes in walls, animal droppings, rotting wood, lead paint on doors is chipped.” During the previous three months, tenants in other buildings in the complex had cited similar problems, including leaks, mold, chipped paint and faulty plumbing, though they do note that some repairs were made in the wake of the April complaint.

But by May, the Pennisis had had enough and moved out. According to their lawsuit, Nadeen’s health improved dramatically after that. Working with attorneys recommended by Pisgah Legal Services, she’s seeking the return of a portion of their rent payments, as well as compensation for Nadeen’s suffering and medical issues.

“They had people living under incredible, miserable conditions,” Carlo Pennisi told Xpress shortly after they moved out. “It's just not right. There are families with kids here.”

A widespread problem

Pisgah Legal attorney Tom Gallagher has dealt with hundreds of local landlord/tenant cases over the last three years. “We've been out to places here in Buncombe County where the amount of mold is literally outrageous,” he reports. “We've seen places with black or dark brown mold on the ceiling, and on top of that there's a green mold, and on top of that there's a yellow mold. Then there's a turquoise mold in the center of it. We've even seen mushrooms growing under sinks where water intrusion is so great.”

It starts with an aging housing stock, often not kept in good repair, that’s set in a generally wet environment. Add in a steady supply of people desperate for affordable housing, cap it off with record-breaking rains this year, and you have a recipe for precisely these kinds of problems, says Gallagher. And while Pisgah Legal has had more requests for assistance from tenants “due to the rain situation this year,” mold problems in rental properties are a long-standing issue, he reports.

Depending on the severity and urgency of the problem, Gallagher advises tenants to notify the landlord in writing several times before contacting Pisgah Legal. Both county staff and city inspectors, he continues, tend to be conscientious and thorough, but state law limits what they can do.

“The state Legislature has not dealt effectively with the rights and obligations of landlords when it comes to a mold situation,” Gallagher maintains. “There's no law that says the landlord or the tenant must do X.”

Mold issues, he notes, usually stem from structural problems rather than tenant behavior, and in such cases, it can be considered a violation of the landlord's obligation to provide a “fit and habitable home.” Under state law, tenants can then sue for part of their rent plus damages. They can even seek an injunction requiring the landlord to make repairs, though Gallagher says these are extremely hard to get. Still, he points out, “If a landlord is hit with a $5,000 judgment, they're going to think twice about renting substandard housing again.”

Typically, says Gallagher, larger companies do a somewhat better job of maintaining their properties than small-scale landlords, mainly because they're more likely to know the law. But that's a generalization, and some larger operations repeatedly rent inadequately maintained residential units.

The Asheville area currently boasts the lowest unemployment and highest job growth among North Carolina cities, but as the economy has improved, Gallagher says he's seen “a greater disparity between rich and poor. The need for our services out there, just to keep landlords honest, is growing. It's more than we can possibly handle.”

City staffers’ hands are tied

In 2003, at the urging of property owners and real-estate agents, the city switched from requiring regular inspections of rental housing to a complaint-based system. This was supposed to rein in skyrocketing housing prices; a decade later, various city officials have called local housing costs a “crisis.”

But what happens when a tenant does complain to the city?

“Most of the time we'll hear the complaint, make notes and send a building inspector out to investigate the conditions,” Building Safety Director Shannon Tuch explains. “If we do find that the conditions are substandard, we put together a report and deliver it to the landlord,” ordering the needed repairs.

“We’ve been out to places here in Buncombe County where the amount of mold is literally outrageous. We’ve even seen mushrooms growing under sinks.” —Attorney Tom Gallagher, Pisgah Legal Services

Landlords are given a variable amount of time to comply, depending on how extensive the problems are. And if they get a permit for the work, the city will conduct follow-up inspections to ensure that it's done properly.

“If it's not done, we keep contacting the property owner, and that's about all we do,” says Tuch. Usually, she notes, landlords do make repairs, but if they don’t, “We are not authorized to fine anybody. The state only allows fines in very limited circumstances, and those fines are small. It doesn't have very much effect.” The inspection records, however, can serve as backup if a tenant wants to file their own lawsuit.

In severe situations, the city can order the property vacated and prohibit re-renting it until repairs are made. In such cases, the landlord would have to provide alternate housing or compensate the tenants for their loss. But that's incredibly rare, Tuch admits. And although state law lists mold as a dangerous condition that can be grounds for a lawsuit, the city can't force an uncooperative landlord to clean it up.

“We often get complaints from people saying ‘The mold is terrible,’ and we try to ask some probing questions about whether anything's falling from the ceiling, but we can't do anything about mold by itself,” she notes. “It may well be a very serious living condition, but it's not anything we're authorized to regulate. It's one of those subjects agencies and the state are reluctant to dive into.”

Good news, bad news

Over at 600 Merrimon, Diamond says she's glad that Hawthorne’s renovations include extensive plumbing repairs in many of the apartments, which she hopes will finally address the water issues. "It looks like they're really going to fix it," she reports. But Diamond is less optimistic about the legal action against Colonial, which she believes may take years, and she remains unhappy about the way renters in general are treated.

“It should be our right to know ahead of time that they have these issues with mold,” Diamond maintains. “Why are renters considered less important than somebody buying? We're all human beings.”

Gallagher, meanwhile, doesn’t condemn all local landlords. “There are some that are diligent and caring,” the attorney notes, “but we're seeing dozens on a weekly basis that are not.”

— David Forbes can be reached at 251-1333, ext. 137, or at dforbes@mountainx.com.