Attorney General Racine Continues Actions to Hold Sanford Capital Accountable

New Suits Against Sanford Properties Seek Restitution; Terrace Manor Tenants Receive Notices

WASHINGTON, D.C. –– Attorney General Karl A. Racine announced today that his office has filed two new actions against landlords who allegedly violated the District’s consumer protection laws by neglecting their properties while collecting rent from tenants who were living in unsafe and unsanitary apartments. Attorney General Racine also announced additional claims in a pending similar suit. The two new lawsuits were filed against the former owners and managers of the Franklin Street Apartments in Ward 5 and the G Street Apartments in Ward 7. Attorney General Racine also added consumer protection claims to an existing Tenant Receivership Act lawsuit related to conditions at an apartment complex in Congress Heights.

Each property was owned and managed by Sanford Capital, LLC and related companies. Attorney General Racine has sued Sanford under the District’s housing laws in a series of cases. Last year, in the Congress Heights case, the Court orderedthat the property be placed under a receiver’s control to correct the housing code violations. Attorney General Racine has already obtained restitution for current and former tenants in a separate case regarding a Sanford-related property at Terrace Manor.

In the new cases, the Office of Attorney General (OAG) is seeking court orders to compel Sanford and other landlords to return the rent paid by tenants while these properties were unsafe, uninhabitable, or otherwise in violation of the District’s Housing Code. OAG is also seeking penalties to be paid to the District and injunctive relief.

“Under District law, landlords have the duty to provide tenants with safe, secure and habitable housing. Landlords who fail to adhere to these legal obligations cannot dodge liability by simply selling their properties,” Attorney General Racine said. “This office will continue to enforce the law against landlords for illegal actions that have occurred under their watch.”

The lawsuits allege that owners and managers of the three properties—including Sanford Capital; Oakmont Management Group, LLC; Aubrey Carter Nowell; 4951 G Street, LLC; 315 Franklin, LLC; and 1309 Alabama Avenue, LLC—made misrepresentations to tenants that they would provide safe and habitable housing. Instead, they engaged in patterns of neglect, resulting in bedbugs and rodent infestations, lack of heat, lack of hot water, unstable ceilings, broken or missing smoke detectors and fire extinguishers, and other serious problems.

Franklin Street Apartments and G Street Apartments
Sanford Capital and affiliated entities no longer own the Franklin Street Apartments or G Street Apartments. However, OAG is seeking to hold them accountable for their past actions and seek restitution for tenants who were harmed while Sanford and its affiliates owned and controlled the properties. In the case of the Franklin Street property, that period began in April of 2012 and ran through at least December of 2017. In the case of the G Street property, that period began in October of 2009 and ran through at least December of 2017. The complaints request a court order requiring restitution to current and former tenants under the District’s Consumer Protection Procedures Act (CPPA). The G Street complaint is available here, and the Franklin Street complaint is available here.

Congress Heights Property
OAG has filed an amended complaint in ongoing litigation related to neglect and mismanagement at the Congress Heights apartment complex. The District has already sought and won the appointment of a receiver to independently manage repairs at the property, and is now adding consumer claims under CPPA to win restitution and damages for tenants who were harmed.

The amended complaint (available here) also adds new defendants, including CityPartners 5914 LLC, after Sanford’s alleged transfer of the property despite a court order stating that Sanford Capital must exclusively negotiate any sale with tenants of the property. OAG is requesting a judgment either voiding the transfer or compelling CityPartners to begin contributing funds toward the receivership.

Terrace Manor Restitution Notices
In the Terrace Manor case, OAG is currently sending notices to current and former tenants alerting them that they are eligible to receive restitution payments. Sanford Capital agreed to return three-quarters of the rent that residents paid the company and its affiliates from December 2012 (the date Sanford Capital purchased the Terrace Manor property) until June 2017.