AG Racine Announces Settlement Ensuring Sanford Capital Leaves Housing Business in the District

Sanford and its Principal Agree to Stay Out of D.C.’s Subsidized Housing Market for Seven Years

WASHINGTON – Attorney General Karl A. Racine announced today that the companies that owned and managed the Terrace Manor apartments in Southeast Washington as well as other low-income housing complexes throughout the city have agreed to exit the District’s housing market. Under a settlement agreement submitted to the Court today, Sanford Capital LLC; its principal, Aubrey Carter Nowell; and his related companies have agreed to divest themselves of all property they currently own in the District within six months.

In addition to Sanford Capital LLC and Nowell, Terrace Manor LLC and Oakmont Management LLC signed the settlement agreement. Each of the entities are owned and operated by Nowell. The ownership group and Nowell also agreed not to acquire any ownership interest in any apartment buildings that receive support from federal or District housing subsidies for the next seven years.

“This settlement is the start of a new era for Terrace Manor residents and other residents who the District alleges have suffered under intolerable living conditions in buildings owned by Sanford Capital and related companies,” said Attorney General Racine. “When landlords won’t take the basic steps to make sure that their tenants live in safety and dignity in accordance with the law, we will work to move those bad actors out of the market and allow other owners who respect the law and respect their tenants to take their place.”

The settlement is the latest in a series of actions the Office of the Attorney General (OAG) has taken on behalf of the residents of Terrace Manor, an apartment complex in Ward 8 at 23rd and Savannah Streets SE, and other buildings owned by Sanford Capital. Those buildings include the Franklin Street Apartments in Ward 5, the G Street Apartments in Ward 7 and the Congress Heights Apartments in Ward 8.

In a lawsuit filed in D.C. Superior Court in 2016, Attorney General Racine alleged that the owners of Terrace Manor “operated in a manner that demonstrates a pattern and practice of neglect and complete disregard for the District's housing laws.” The lawsuit alleged multiple violations of the city’s housing code as well as the Consumer Protection Procedures Act, which prohibits landlords from misrepresenting the conditions of housing offered to tenants.

In September, OAG reached a settlement in which the owners agreed to pay $325,000 in restitution and penalties, including an average repayment of approximately $9,500 to eligible former Terrace Manor residents who lived in the complex while the violations existed. The properties were put under receivership, and OAG secured a guarantee that repairs would be made to the complex by new owners, the WC Smith company. Today’s settlement marks the last step of the District’s litigation at Terrace Manor.

In February, Attorney General Racine filed consumer claims against Sanford Capital and affiliated companies in connection with the Franklin Street and G Street properties, seeking restitution for current and former tenants. Even though Sanford Capital had divested itself of those properties at the time of the filing, Attorney General Racine said that landlords who fail to adhere to their legal obligations cannot dodge liability for their actions by simply selling their properties. OAG also filed an amended complaint in existing litigation over the Congress Heights property, seeking restitution for current and former residents who lived there under what Attorney General Racine alleges were non-habitable conditions.

Other Settlement Terms

Under the settlement announced today, Nowell and his network of companies also agreed:

  • To cease making false or misleading statements about properties or services they provide to tenants;
  • To make monthly reports to OAG on their compliance with the agreement to divest of all their existing properties in the District;
  • And, to the extent they are unable to divest their ownership interest due to reasons outside of their control, have properties they still own managed by companies approved by the District until those properties are sold.

In 2015, Sanford had a portfolio of 14 apartment complexes, concentrated on the eastern half of the District.

A copy of the settlement agreement is available here.