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Published: November 03, 2009 11:51 am
Utilities shutoff has renters steamed
Rental management firm fell behind on monthly payments
By JESSE DAVIS
jesse.davis@goshennews.com
When Susan Hochstetler woke up Tuesday morning, she didn’t expect to see a Goshen city utilities truck in front of her house.
She was even more surprised when she asked him what he was doing and he said he was shutting off her neighbors’ water. At the time, she assumed they must have been behind on their payments, until, minutes later, she found her own water had been shut off as well.
“I went back out and I asked the city employee why,” Hochstetler said. “He said the bills hadn’t been paid for a while. When I told him we pay our landlord directly, again he said the bills hadn’t been paid.”
Hochstetler proceeded to call City Councilwoman Dixie Robinson, the mayor’s office, the city utilities department, the Goshen Housing Authority and Elkhart County Fair Housing.
What Hochstetler and her neighbors came to discover was that although they had been paying their utility bills as part of their rent to Goshen-based 1st Choice Property Management, run by Stuart Gingerich, those payments had not been making it to the city.
“The housing authority told me they had received a lot of calls in the last 10 days about (Gingerich),” she said. “I went to see (him) and asked for my money back. He could not give it to me, he said he was in bankruptcy.”
When contacted by the News at his office, however, Gingerich said that was not the case. He said no bankruptcy filings had been made, and that the utility payment issue had to do with the transfer of Hochstetler’s and others’ properties to a different management company.
“Several of the properties’ owners transferred management to another company,” Hochstetler said. “Because of that there has been some problem with the transfer of utilities over the last month.”
Different stories
Again, Hochstetler’s story was different, as she said she was told by the utilities department that $172 was owed on her account, approximately four months worth of payments.
Gingerich’s explanation was also contradicted by comments from both the new landlords and the new property management company now in charge of hers and others’ properties. Hochstetler’s property, along with three others, were returned to John and Shirleen Hochstedler, who said they only received the properties last week.
They also said Gingerich was in financial trouble.
“We only found out just a few days before we went in and talked to (Gingerich) that he was in as bad of shape as he was,” Shirleen Hochstedler said. “He’s in default on his taxes. He didn’t pay any of the real estate taxes since he took them over.”
The Hochstedlers, wanting to ease the burden on Gingerich as well as ensure proper help for the tenants, took the properties back, wrote off the debt he owed them and paid the back taxes. Shirleen Hochstedler said they don’t wish him bad and will not take him to court as they don’t want to cause any more problems for him or his family. They had originally sold the properties to Gingerich on a land contract.
Changing management
After taking back the properties, the Hochstedlers contacted Maplewoods Property Management on Oct. 26. From there, broker Lou Ann Stoner took over. There were still, however, problems with the transfer.
According to Stoner, the transfer of keys, contracts, a history of tenant payments and security deposits to the new property manager is essential.
“We got the keys, the contracts and the statements, but no security deposits,” Stoner said. “He doesn’t have any money.”
She also said the tenants would not have to pay a new security deposit to Maplewoods as it was not their fault.
Then, beginning yesterday morning, Stoner began receiving calls from upset and concerned tenants whose water had been shut off.
“I had to go to the utility company and I had to pay an $80 deposit plus a $30 reconnect fee for every tenant that had been disconnected,” she said. “That’s quite a significant outlay of money for us as a property management company.”
Approximately 10 tenants had been cut off from the city service. Thanks to Stoner’s efforts, each of them were reconnected by 5 p.m. the same day.
While at the utilities office, Stoner also ensured all properties that had been transferred to the company were listed in their name. In total, 25 properties were added to their rolls. She said there is still uncertainty with the status of some of the properties.
“Utilities are broken into sections, and this was the billing cycle for one section,” she said. “So, I don’t know down the road if other places will get shut off if the bills have not been paid.”
Water and Sewer Billing Office Manager Tana Brooks said she recently talked to Gingerich when he came in to the office when she told him the addresses and amounts due. She said he chose to pay a certain number of them and the rest he didn’t.
“This is not a common occurrence,” Brooks said of the unpaid bills.
Addressing the council
After working throughout the day to find more information and eventually having her water service reconnected, Hochstetler attended the City Council meeting where she aired her concerns. Her main question was whether or not the city could contact tenants when their utility payments were behind and when they were going to be shut off, as none of those affected by the situation had any advance notice.
Currently only the property owners are notified.
“It’s a problem we have to discuss internally and see if there’s an answer to it,” Mayor Allan Kauffman said. “It definitely shouldn’t be that somebody’s utilities get turned off when they’ve paid their utility bill to the property management company and then that company hasn’t paid us. We have to look at our ordinance and we have to look at what is possible as far as those kind of notifications.”
Calls to Gingerich for additional comment Tuesday evening were not returned in time for publication.
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